A good opportunity to remind everyone of the official roles of the CCP in foreign companies in China, as well as the challenges in addressing legitimate concerns without devolving into a mob looking for something to torch.

All my personal views below:

A THREAD 1/15 https://twitter.com/nathanattrill/status/1338353288924655616

First, all enterprises in China fall under the jurisdiction of the Company Law. One provision within the Company Law requires that any enterprise with more than three employees that are members of the CCP must allow and give space to those members to form a Party Cell. 2/15

If the employees proceed, they generally meet once every couple of weeks. Most often, they organize study sessions for XJP Thought on XYZ or the Spirit of the 19th Party Congress and the like. 3/15

There have been periodic efforts over the last few years to push companies to include a formal position in the board/decision-making groups for a CCP representative. Here's a link to a public statement on one such period by the European Chamber: 4/15

http://www.europeanchamber.com.cn/en/press-releases/2583/chamber_stance_on_the_governance_of_joint_ventures_and_the_role_of_party_organisations

The pressure was strongest in JVs with SOEs, with the pressure being easy to rebuff if the foreign entity holds a larger number of shares. Meanwhile, the small shareholders of JVs reported that the pressure was commensurately higher. 5/15

There was a resurgence of this with the United Front Work Department push in the private sector back in September. More on the details here in another European Chamber stance on the Guiding Opinions. 6/15

http://www.europeanchamber.com.cn/en/press-releases/3291/european_chamber_stance_on_united_front_work_in_china_s_private_sector

One of the most concerning lines was about building a 'backbone of business leaders that can be relied upon at critical moments'. This kind of language does little good for CCP members and Chinese firms abroad.

Link below to my thread at the time 7/15 https://twitter.com/Jacob_T_Gunter/status/1306054598768037888?s=20

So to the story at hand: It's obviously highly worrying that CCP members are in prominent positions in the Shanghai consulates covered in the leak - talk about a security failure.

The presence of CCP members in companies is a different matter, and far less black and white. 8/15

Obviously, it's in the interests of national security to worry about CCP members in defense contractors, though I'd imagine there are security clearance requirements already. But the original article implicitly raises concerns about CCP members in the private sector. 9/15

And let’s not be naïve, CCP members are, on paper, at least some degree of a legitimate concern for things like tech or data leaks. But this is a really difficult issue to parse because of how widespread CCP membership is in China. 10/15

There are around 90 million members of the CCP. It’s no secret that many members join because it enhances upward mobility. Many of the sharpest Chinese I’ve worked and studied with are members for purely pragmatic reasons. Plenty also joined in less... ideological times... 11/15

There may be a grain of truth in the argument that CCP members are at least somewhat more likely to act in ways contrary to the interests of a foreign company in favour of the CCP’s/PRC’s interests. 12/15

But may also be a grain of truth in the argument that China’s National Security Law, which de jure requires all PRC citizens to work for the national interest, means that ALL PRC citizens should be scrutinized. But possible grains of truth shouldn’t be driving policy. 13/15

A proportionate response seems needed. However, it's incredibly difficult to levy a measured response to these legitimate concerns that mitigates the actions of bad actors while also not descending into tribalistic demands for loyalty tests based on national origin. 14/15

I don’t think there’s a clean and easy answer, but I hope that governments and companies are having these frank conversations when forming national policy and business strategy, rather than naively sticking their heads in the sand, or overcorrecting into witch-hunting. 15/15