Based on an official survey of Private Enterprises, the attached figure shows the progressive increase in Party coverage of the private sector, with a clear acceleration after 2012. While we are still far from comprehensive coverage, with only 48.3% of the surveyed private businesses hosting a party unit, this is largely due to the small size of these companies which do not employ three party members, the minimum to form a cell. Penetration of large private companies is, by contrast, almost total, with over 92% of China’s top 500 private enterprises hosting party cells. The coverage should soon be total as it is since 2018 mandatory for domestically-listed companies to establish a party unit.
A Modern enterprise system with Chinese characteristics
While new data on the burgeoning of party cells in private companies, especially foreign ones, attracts media attention, this is only part of the story. Party cells, which, in a Leninist system, answer only to upper-level party organs and are rarely held accountable by courts or regulators, have so far mainly played a secondary role in private businesses. This includes recruiting party members and organizing study sessions for them, providing welfare assistance to workers, and more broadly, focusing on business-friendly operations, such as training programs or social gatherings for employees. This is now changing as new guidelines published in September 2020 illustrate.
These new guidelines strengthen the party’s co-optation strategy towards entrepreneurs. They expand the recruitment of businesspeople into the party as to "cultivate a team of private economic persons who are resolute in walking with the party", and who can be relied upon "in times of crisis". To do so, CCP units in firms, together with local governments, are to compile "representative person databases and talent banks" to be recruited in the CCP and its representative bodies, for example as leaders of local branches of the All-China Federation of Industry and Commerce. Beyond recruitment, entrepreneurs are to be further educated and monitored to make sure they remain in line with the Party’s positions, but also so they "regulate their own words and actions", "cultivate a healthy lifestyle" as well as work in a "down-to-earth manner and be modest and low-key". It is therefore not only about ensuring the businesspeople political loyalty, but also shaping their working style and public image.