China’s Communist Party extends reach into foreign companies

American and European companies involved in joint ventures with state-owned Chinese firms have been asked in recent months to give internal Communist Party cells an explicit role in decision-making, executives and business groups say.

It is, they say, a worrying demand that threatens to put politics before profits, and the interests of the party above all other considerations. It suggests that foreign companies are no longer exempt from President Xi Jinping’s overarching vision of complete control.

“The creeping intrusion by the party apparatus into the boardrooms of foreign-invested enterprises has not yet manifested itself on a large scale, but things are certainly going down that path,” said James Zimmerman, a managing partner of the law firm Sheppard, Mullin, Richter and Hampton and former chairman of the American Chamber of Commerce in China, who is instructing clients to “push back.”

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