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Home / Business / China is stepping up the government's presence in Alibaba, private giants

China is stepping up the government's presence in Alibaba, private giants



(Bloomberg) – The government in one of China's top technology hubs sends officials to 100 local companies including e-commerce giant Alibaba Group Holding Ltd., the latest effort to exert greater influence over the country's massive private sector. [1

9659002] Hangzhou, in the eastern province of Zhejiang, assigns government affairs representatives to facilitate communications and accelerate projects, the city government said on its website. Chinese drinking giant Hangzhou Wahaha Group Co. and automaker Zhejiang Geely Holding Group Co. are among the other companies based in the affluent region that have been designated, according to reports in state media.

“We understand this initiative of the Hangzhou City Council aims to promote a better business environment in support of Hangzhou-based enterprises. The government representative will act as a bridge to the private sector and will not interfere with the company's operations, says Alibaba in a text statement. Representatives for Wahaha and Geely did not immediately respond to requests for comment.

The Hangzhou government said the initiative aimed to smooth the workflow between officials and China's high-tech companies and manufacturers. But the move can also be seen as an attempt to keep track of a non-state-owned sector that is becoming a major driver of the world's No. 2 economy. Representatives of the country's public security system are already embedded in China's largest Internet companies, responsible for crime prevention and stamping out false rumors.

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"They may be controlling whether the Communist Party units work effectively in the companies," said Paul Gillis, a professor at Beijing University's Guanghua School of Management. While China legitimized capitalism, the level of government influence was never intended to disappear. Sometimes private entrepreneurs forget this and are reminded of it. ”

Zhejiang is considered the cradle of modern Chinese private enterprises, home to a generation of self-made billionaires from Alibaba's Jack Ma and Geely founder Li Shufu to Wahaha's Zong Qinghou. The Communist Party accepted so-called "red capitalists" or private entrepreneurs into the party in 2001, so that they could become part of the country's legislature a year later.

The relationship between Beijing and well-known business people is still sensitive. The government has looked at trying to strengthen an official presence in non-governmental companies, including by mandating that private companies on scale create and maintain a party branch. It was not clear whether the 100 Zhejiang-based companies included foreign companies.

Why communist China is home to so many billionaires: QuickTake

– With the assistance of Tian Ying and Rachel Chang.

To contact the reporter about this story: Lulu Yilun Chen of Hong Kong at ychen447@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum Murphy

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