A trade group has warned that members of the German business community in China are concerned about a request from the ruling Communist Party to set up cells in their companies – and some may even pull out of the market if the pressure continues.
In a statement released last week, the Delegations of German Industry and Commerce in China – which represents the Association of German Chambers of Industry and Commerce in China – said foreign businesses faced increasing challenges in the country as the party’s influence on their operations grew.
The body said it had received reports about attempts by the party to strengthen its influence on wholly foreign-owned German companies operating in China. There is no legal basis for such companies to promote the party.
“We do not believe that foreign-invested companies generally should be required to promote the development of any political party within company structures,” the statement said. “Should these attempts to influence foreign-invested companies continue, it cannot be ruled out that German companies might retreat from the Chinese market or reconsider investment strategies.”
The party has been trying to make inroads into foreign-funded companies since President Xi Jinping came to power and began pushing to increase its role in all aspects of life in China.
“As far as I know, some foreign-funded companies have been required to offer full pay for at least one party branch member who would deal with the company’s party branch issues,” said Liu Kaiming, head of the Institute of Contemporary Observation, a think tank based in Shenzhen.
“Operators of foreign firms usually see a Communist Party branch in their company as something set up by staff to help promote goodwill and communication with the party. But now they feel these branches are trying to extend the party’s influence within company operations,” Liu said.
“Members of these branches often meet and hold activities – it’s not a positive influence on staff. So far, the effects have been limited, but many companies are worried about whether this situation will escalate.”