China’s efforts to strengthen and expand Chinese Communist Party (CCP) organizations within companies is turning into one of the thorniest disputes in the U.S.-China economic relationship. American companies operating within China and American investors in Chinese companies are faced with the unsettling prospect of a CCP organization inside their company with an unclear agenda and overlapping lines of authority with the company’s managers. There is limited transparency over how party organizations make decisions, what aspects of a company they seek to control, what accountability, if any, they have to a company’s shareholders, and what information they may be sharing with outside parties.
If China refuses to correct course on this issue, U.S. policymakers will be justified in their accusations that China should not be treated as a market economy.
As state-owned enterprises (SOEs) in China underwent reforms and partially privatized via public listings, the CCP ha
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