From Party Policy to Law: The Formalization of the Chinese Communist Party’s Role in State-owned Enterprise Governance

Authors

• Jie Zeng

Library of Congress Authority File

http://id.loc.gov/authorities/names/n79122466.html

Document Type

Article

Abstract

For the first time, grassroots branches of the Chinese Communist Party (CCP) were formally granted leadership roles and major decision-making authority under Chinese Company Law in 2024. This change has made China the only jurisdiction that has, at the national law level, authorized its main political party to engage directly in corporate governance without being a shareholder. While this may appear to be the result of President Xi Jinping’s party-building campaign, party involvement in corporate governance goes back to the Maoist era. This Article examines the evolution of state-owned enterprise (SOE) governance from 1949 to the present, illustrating that even though the role of CCP branches in SOEs has waxed and waned with the shifting economic policies and political ideologies, the CCP’s influence has been ever-present. Drawing insights from history, this Article argues that while SOEs’ pursuit of policy goals can disadvantage minority shareholders, their policy orientation may also benefit domestic stakeholders—employees, local communities, and the environment—a feature difficult to replicate in market economies driven purely by shareholder interests.

Recommended Citation

Jie Zeng, From Party Policy to Law: The Formalization of the Chinese Communist Party’s Role in State-owned Enterprise Governance, 27 San Diego Int'l L.J. 245 (2026)
Available at: https://digital.sandiego.edu/ilj/vol27/iss2/4