China to send state officials to 100 private firms including Alibaba

SHANGHAI (Reuters) - China’s top technology hub Hangzhou plans to assign government officials to work with 100 private companies including e-commerce giant Alibaba, according to state media reports, in a move likely to raise concerns over the growing role of the state.

FILE PHOTO: A logo of Alibaba Group is seen at an exhibition during the World Intelligence Congress in Tianjin, China May 16, 2019. REUTERS/Jason Lee

The step underscores how Chinese government and party authorities are growing more deeply integrated into the private sector, as its economy sputters amid an intensifying trade war with the United States.

The city of Hangzhou, home to Alibaba Group Holding Ltd BABA.N, will designate government officials to work with 100 local companies in the eastern province of Zhejiang, the local government said on its website.

The directives, presented as a means to boost the local manufacturing industry, did not name the 100 companies subject to the policy, but state media reports said Alibaba and auto maker Zhejiang Geely Automobile Holdings Ltd [GEELY.UL] would be among the companies.

Alibaba said the plan would not interfere with its operations.

“We understand this initiative... aims to foster a better business environment in support of Hangzhou-based enterprises. The government representative will function as a bridge to the private sector, and will not interfere with the company’s operations,” Alibaba said in a statement.

Geely did not immediately respond to a request for comment.

Chinese law has long required private companies, including foreign entities, to establish formal party organizations.

Such groups were once seen as largely symbolic. However, in recent years, foreign executives have said here they have come under increasing pressure to allow party representatives more sway over business operations.

Domestic companies have strengthened party committees as well. In 2018, dozens of Chinese banks announced changes to their articles of association, granting more power to party committees.

Reporting by Josh Horwitz; Editing by Miyoung Kim & Shri Navaratnam