Communist Party Branch Opens in Wal-Mart China Headquarters

December 22, 2006 12:00 am Last Updated: December 22, 2006 12:00 am

CHINA—U.S. retail giant Wal-Mart has set up another Chinese Communist Party (CCP) branch in its Shenzhen headquarters following the opening of a Communist Party and Youth League branch in its Shenyang store earlier this year.

Analysts point out that the CCP is trying to extend its presence into the political vacuum within foreign private enterprises. This vacuum was caused by the corresponding closure of party managed state enterprises.

Wal-Mart spokesperson Huang Yunling confirmed that the CCP branch opened in Shenzhen last Friday. Huang claimed that some employees in Wal-Mart were already members of the CCP, so they had the right to set up a Party branch.

Huang also said that he didn't know whether Wal-Mart would have any formal connection with the CCP branch or whether the establishment of the branch would influence company operations.

The CCP branch in Wal-Mart's Shenzhen headquarters is the sixth party branch the giant retailer has accommodated in China.

Once a Place of Party Influence

With the continuing development of China's private enterprises, non-competitive state enterprises are failing and their employees are loosing their jobs and pensions. The CCP intends to extend its political influence into foreign enterprises. Since Wal-Mart has 68 stores in China and employees over 36,000 Chinese employees, it has become a target for the CCP to extend its political influence.

The Communist Party's branches were once led state-owned enterprises. After reforms, the presence of the CCP in state-owned enterprises has diminished , though it still retains the responsibility of supervising the management of enterprises. How will Party branches exert their influence in these foreign enterprises?

Birds of a Feather

Wal-Mart is frequently criticized for its business practices. A labor rights advocate has criticized Wal-Mart for building its huge commercial empire through aggressive bargaining. Focusing efforts on reducing core costs is the main reason for its success as a global retailer.

Wal-Mart started operations in the United States, but refused to allow trade unions to organize in its stores. It employs many part-time workers and is frequently criticized for exploiting them.

While Wal-Mart's net profit fell 26 percent for the first time in ten years, the CCP faces its greatest crisis in almost 60 years, mass withdrawals of similar proportions from its ranks.