According to local state media, Chinese government representatives are to be sent to work within 100 private businesses operating in Hangzhou’s tech center.
Over the weekend, state media revealed that the Hangzhou Municipal Government would transfer 100 officials to “important businesses like Alibaba, Geely Holdings and Wahaha.” A complete list of the 100 businesses included in the initiative was not published.
The directive, which media said was part of the “New Manufacturing Plan” of the Hangzhou government, is supposedly an effort to increase production and support the local economy in Zhejiang’s eastern province.
It is the latest strategy that highlights the efforts of the Chinese government to transform the economy of the country. In high-value sectors such as robotics and aerospace, its core strategy, Made in China 2025, seeks to catch up with China’s financial competitors.
Hangzhou is home to several of China’s biggest companies, an hour by train from Shanghai. Alibaba’s global headquarters is located in the city, home to 20,000 employees.
The tech giant said the fresh directives would not interrupt their activities when contacted by CNBC.
“We comprehend the initiative… The goal is to promote a better business atmosphere in support of Hangzhou-based companies, “the firm said Monday in a declaration.
“The public official will operate as a bridge to the private sector and will not interfere with the activities of the company.” Wahaha was not instantly accessible to comment on spokespersons for automaker Geely and beverage producing.
Although claiming that the move in Hangzhou is nothing more than an “innovative” financial approach, inserting public officials into private firms raises further concerns about Chinese firms ‘ state impact.
Under Chinese law, if requested to do so, organizations may be forced to transfer data to the state.
Chinese telecommunications giant Huawei was at the center of an international security debate because of concerns that these laws could allow state spying if the company is allowed access to the global 5 G Internet infrastructure.
Huawei has repeatedly denied the claims against it, but several countries, including Australia, New Zealand, and Japan, have prevented Huawei from supplying 5 G network parts.
The U.S., which led the push to ban Huawei equipment from 5 G frameworks, encouraged its allies to block the business from their domestic networks, warning them of hazards to national security.
The Chinese state has rejected allegations that it can force businesses to share data, but putting hundreds of public representatives in private firms could renew international worries about the state’s level of authority over national corporations.