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Why Do We Say That We Must First Look at Politics to Understand State-Owned Enterprises (SOEs)? 


This article, written by a research director at the official Central Party School, addresses the role of politics and ideology in the management of state-owned enterprises (SOEs).

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The report of the 19th National Congress of the Chinese Communist Party (19th CCP National Congress) (党的十九大) noted that “Ideology determines the direction and development path of cultural progress.” General Secretary Xi Jinping emphasized that “ideological work is extremely important work for the Party, and it is work that builds a heart for the country and a soul for the nation.” As an important component of the cause of the Party and the country, SOEs should naturally also attach great importance to and diligently carry out ideological work. 


There are many factors that determine the ideological work of SOEs, the most important of which is the ideological capabilities of the majority of party members and cadres. This is because, among all the factors that determine the effectiveness of such work, the human factor ranks first; the ideological capabilities of the majority of party members and cadres directly determines whether the ideological work of an SOE can be effectively carried out, whether it can be implemented, and whether it can achieve actual results. 


SOEs are production and operation entities and economic entities. Generally speaking, the core standard for measuring the ability of party members and cadres of SOEs to perform their duties is their ability to produce, operate, and manage. However, because SOEs are first and foremost a political existence, there are also many political and ideological disputes surrounding them. Therefore, as party members and cadres of SOEs, they must also have certain ideological capabilities, otherwise It is also difficult to perform due diligence. It can be said that ideological capability is also the core ability of SOE party members and cadres. 


Why do we say that we must first look at politics to understand SOEs? 


Regarding this issue, we can discuss a basic ideological and political question that party members and cadres of SOEs must face, which is: Should we “de-politicize” (去政治化) or “de-ideologize” (“去意识形态化”) SOEs? 


Before the 18th CCP National Congress (党的十八大), there was a period of time where the consensus on whether SOEs should be led by the CCP was vague rather than explicit, and actions were exclusive rather than persistent. The Party’s organizational status in SOEs was awkward, the Party’s leadership had been weakened, and the Party’s own establishment had also been weakened. Some people believed that the implementation of the factory director (manager) responsibility system (厂长(经理)负责制) required SOEs to “separate the Party from the government” (“党政分开”) and “separate the government from the enterprise” (“政企分开”). Others believed that the assessment of SOEs fell under the “Only GDP Theory” (“GDP”) and would regard SOEs as purely economic organizations. Others still believed that establishing a corporate governance structure and complying with international standards would vacate the position of Party organizations, weakening Party leadership, marginalizing the Party organization, blurring the function of the Party organization, and weakening the awareness of Party leadership in SOEs for a long period of time, and so on and so forth. 


General Secretary Xi Jinping took keen notice of this when he specifically emphasized that: “We must excel at looking at issues politically, and we must not think that this is just a simple issue of ownership or a purely economic issue. That would be naive!” 


From this speech by General Secretary Xi Jinping, an important judgment can be drawn: When looking at SOEs, we must first look at them politically and ideologically. It would be naive to think that the problem of SOEs is only an economic problem. 


Studies have pointed out that: Considering economic issues from a political perspective is the greatest feature of Xi Jinping Thought on Socialist Economy with Chinese Characteristics for a New Era (习近平新时代中国特色社会主义经济思想). The reason why General Secretary Xi Jinping attaches so much importance to the “strengthening, excellence, and expansion (做强做优做大) of SOEs” is because he stands at the political height of the international struggle and strategic rivalry between China and the hostile forces of the West and at the height of the mission to uphold and develop socialism with Chinese characteristics in the new era. At such a height, he can observe, analyze, consider, and give judgment. 


So, for the majority of party members and cadres of SOEs, the key to the problem lies in how to treat the issue of whether SOEs should be “depoliticized” or “de-ideologized.” In fact, this question must be considered and answered in layers: 


At the first layer, from a macro perspective, SOEs have an inherent and essential connection with the leadership of the CCP and the socialist system. Not only must we have SOEs, but we must also continue to grow and develop them. Any doubts on this are politically and ideologically unfounded, and it would be harmful and even dangerous in practice. 


Regarding the contributions of SOEs, General Secretary Xi Jinping emphasized their “outstanding meritorious service!” and “indispensable contributions!” He pointed out that China’s SOEs have made historic contributions to China’s economic and social development, S&T progress, national defense construction, and improving people’s livelihoods. Since the contributions of SOEs are not purely economic, it is natural not to look at SOEs from a purely economic perspective! 


At the second layer, in terms of the specifics, if the “depoliticization” and “de-ideologicalization” of SOEs mean that “the reform and development of SOEs cannot be restrained and hindered by political and ideological reasons,” then this statement can generally stand on its own. However, if the meaning is to “strip” (“剥离”) SOEs from political and ideological systems and requirements and make them “pure enterprises” (“纯粹的企业”), then there are profound political and ideological issues with this statement. In particular, if the meaning of this statement is to measure and examine SOEs in accordance with the principles and standards of neoliberalism (新自由主义), in other words, that SOEs should “depoliticize” and “de-ideologize” in their production, operations, and management, the problem becomes serious and even changes in nature. 


Therefore, regarding the question of whether SOEs should “depoliticize” and “de-ideologize,” the question of how we can grasp this from a macro perspective without deviating and also how we can analyze specific issues in detail, without being mechanical, must become the primary political and ideological issue that the majority of state-owned enterprise party members and cadres must face. 


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Cite This Page

黄相怀 (Huang Xianghuai). "Why Do We Say That We Must First Look at Politics to Understand State-Owned Enterprises (SOEs)? [为什么说看国有企业首先要从政治上看?]". CSIS Interpret: China, original work published in Lecturer's Network [宣讲家网], September 11, 2020

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