Chinese smartphone maker Xiaomi has set up a Communist Party committee, raising questions about the extent of the party’s influence in the private sector.
China’s state-owned companies, along with schools, hospitals and other public organisations, are required to have a party committee which overseas political affairs. The committees hold a paramount position in corporate governance, often taking part in decision making such as appointments of top executives. While many private companies have also set up party committees in recent years, their roles in these companies are largely unknown to the public.
The launch event for Xiaomi’s party committee took place in Beijing on June 19, with municipal officials attending and giving speeches, according to the Beijing government’s website. But news of the launch was only widely reported on Sunday, sparking heated public discussion on the internet.
A user on Weibo, a Twitter-like service, said the party seems to be “everywhere.” Another joked “Apple is going to be taken down by Xiaomi if they don’t set up a party committee as well.”
Some raised the question of the party committee’s power. “Should CEO Lei Jun listen to the board of directors or the party committee?” a message which was reposted 52 times in a few hours said.
Party mouthpiece Global Times published a commentary on Monday backing Xiaomi’s decision, saying the practice is commonplace in China and that being a party member usually adds to a job seeker’s chances of getting hired.
According to Sina News, internet companies including Alibaba, Tencent, Baidu, Sohu and Sina have all set up party committees. US retail giant Walmart’s Asia-Pacific branch set up its Communist Party organisation in 2006.
Xiaomi reported an annual turnover of US$45 billion last year. The company, one of the largest smart phone distributors in China and in the world, has over 8,000 employees, of which 104 are party members, according to Global Time’s report.