Since taking power five years ago, Xi has reasserted the party’s supremacy, with himself as its “core” leader. That has meant greater control over personnel and strategy at state-owned enterprises, which control about 40 percent of the nation’s industrial production, as well as schools and universities. Xi’s chief policy-making instrument has been an increasing array of party “leading small groups,” which set and coordinate policy. He’s overhauled the bureaucracy to make the party more dominant, while also giving it a far more prominent role in business.
“Companies are concerned establishment of a party unit in the company means the party would play a role in companies’ operational decision making -- leading to decisions made for political rather than business reasons,” said Jacob Parker, vice president of China operations at the US-China Business Council. “We are concerned about that. Introducing political objectives and management roles into foreign invested enterprises is not a positive step for businesses.”