In May 2012 the Central Committee of the Chinese Communist Party circulated a notice urging lower-level party committees and local governments to strengthen and improve the party's work in private companies.

According to the notice, the party's goal is that:

  • all private companies with at least 50 staff should have some party members; and
  • a party organisation should be established within the company if it has at least three party members and if conditions permit.

Party organisations in private companies will be charged with educating and supervising the company to ensure that it conducts its business lawfully and fulfils its social responsibilities, as well as facilitating the establishment of harmonious labour relations within the company and maintaining social stability.

The secretary of the party organisation may be entitled to attend important meetings of the company's management. If a private company has a labour union, the party secretary will be encouraged to take the role of union chairman. The notice also contemplates providing special protection for party secretaries against termination of employment in the future.

Private companies have no legal obligations to form party organisations. However, the Company Law sets out a general principle whereby companies are to provide necessary conditions for their party organisations to conduct party activities.

For further information on this topic please contact Andreas Lauffs or Jonathan Isaacs at Baker & McKenzie's Hong Kong office by telephone (+852 2846 1888), fax (+852 2845 0476) or email ([email protected] or [email protected]).