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(Bloomberg) – The government of one of China's leading technology centers is sending representatives to 100 local companies, including e-commerce giant Alibaba Group Holding Ltd., the latest effort to exert greater influence on the colossal private sector from the country.
Hangzhou, in eastern Zhejiang Province, is in charge of government affairs representatives to facilitate communication and speed up projects, the city government said on its website. The Chinese drinks giant Hangzhou Wahaha Group Co. and the carmaker Zhejiang Geely Holding Group are among other successful companies in the region that have been distinguished, according to reports in the official media.
"We understand that this initiative of the Hangzhou City Government aims to create a better business environment to support the Hangzhou-based enterprises. The government representative will serve as a gateway to the private sector and will not interfere with the company's operations, "Alibaba said in a statement. The Wahaha and Geely representatives did not immediately respond to requests for comment.
The Hangzhou government said the initiative was aimed at smoothing the workflow between officials and Chinese high-tech companies and manufacturers. But this initiative could also be seen as an effort to keep an eye on a non-state-controlled sector gaining weight as the main driver of the world's second largest economy. Representatives of the country's public security system are already integrated into China's largest Internet companies, charged with preventing crime and eradicating false rumors.
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"They could check if the Communist Party units are working effectively within companies," said Paul Gillis, a professor at the Guanghua School of Management of Peking University. "While China legitimized capitalism, the influence of the government was never intended to disappear. Private entrepreneurs sometimes forget about it and are reminded of it. "
Zhejiang is considered the cradle of modern Chinese private enterprise, home to a generation of self-proclaimed billionaires, Jack Ma of Alibaba and Geely, founder of Li Shufu, in Zong Qinghou of Wahaha. The Communist Party accepted in 2001 so-called "red capitalists" or private entrepreneurs, allowing them to be part of the country's legislature a year later.
Nevertheless, the relationship between Beijing and well-known businessmen remains sensitive. It was found that the government was trying to increase its formal presence in non-state enterprises, including by forcing private companies to create and maintain a branch of the party. It was unclear whether the 100 companies based in Zhejiang included foreign companies.
Why Communist China is home to so many billionaires: QuickTake
– With the help of Tian Ying and Rachel Chang.
To contact the reporter about this story: Lulu Yilun Chen in Hong Kong at [email protected]
To contact the editors in charge of this story: Edwin Chan at [email protected], Colum Murphy
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