China’s Communist Party is tightening its grip in businesses

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leadership of private enterprises". The revised articles should set out staffing for the party branch, pledge funding for it and embed the party in the “corporate governance structure", says an account by Yingshang’s party authorities. Language used by the party to describe how it should operate in SOEs is now often applied to private firms.

“Two-way entry and cross appointment" is one such phrase. It means, in essence, that the company’s management and the party branch’s leadership team should be merged. That may avoid conflict between the two structures, but it also gives the party a big say over appointments.

For a start, it only works if all of the most senior managers are party members. Unlike in SOEs, this is often not the case in private firms. Local officials routinely extol the system, even if they do not order its adoption.

By 2021 in the city of Chengde, the bosses of nearly a quarter of private firms were also party chiefs, according to state media. Officials like to talk about the creation among private firms of a “modern enterprise system with Chinese characteristics". This is another term borrowed from SOEs.

It means giving a central role to Communists. Ensuring that only those trusted by the party get the top jobs is clearly one of the party’s aims. In 2020 Ye Qing, a vice-chairman of the (party-controlled) All-China Federation of Industry and Commerce, said that, as part of building a modern enterprise system, party branches in private firms should be given “guiding power" over personnel decisions.