The Washington Post 1/30/2018
Hostile takeover?
For decades, China was something of an El Dorado for foreign companies. Its low wages lured manufacturers and its vast consumer market and rapidly expanding middle class presented an unrivaled opportunity for growth — even if it was always a challenging place to operate.
But those challenges have only grown along with China's power and its decreasing need to welcome Western companies into its economy. Now, executives and business groups say, the Communist Party is demanding a direct voice in the decisions of Western companies operating in China.
According to them, American and European companies involved in joint ventures with state-owned Chinese firms — arrangements that are required in many cases for foreign companies — have been asked in recent months to give Communist Party cells an explicit role in decision-making. They see it as a worrying demand that suggests that foreign companies are no longer exempt from President Xi Jinping’s overarching vision of complete control over Chinese society.
That goes hand-in-hand with Xi's moves to crack down on China's Internet by boosting censorship and limiting the methods by which Chinese Internet users can evade the country's filtering systems. Smaller companies worry about having their Internet access effectively ransomed in order to win greater compliance with party demands.
To regain full access to the Internet, for example, one American company was asked to sign a “solemn commitment” that it would obey the Chinese Communist Party’s “seven bottom lines,” do nothing to undermine the socialist system, public order or social morality, and wouldn’t use the Internet to violate the interests of the state.
With China's confidence and economy both growing, experts say Beijing does not care as much about foreign firms as it used to, with a definite hubris setting in after the 2008 recession.
“Foreign companies used to be seen as special here, as friends of China,” said James McGregor, a China-based author and businessman. “But that kind of flipped during the Western financial crisis.”
But that could end up being a geopolitical mistake for Beijing, especially as tensions grow between Beijing and the Trump administration.
“In the past, foreign business has been an important ally for China," said J örg Wuttke, a former president of the European Chamber of Commerce, "but the country now appears to be alienating it at a time when it most needs friends abroad." — Simon Denyer
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