Party Control in China's Listed Firms

Along with state shareholding and government administration, the third source of political control of Chinese listed firms is the Chinese Communist Party (CCP). Using a unique hand-collected dataset that includes party secretary information for listed firms between 2000 and 2004, we examine the existence and power of party secretaries in companies. The party secretary is the leader of the party committee and exercises the power of the CCP at firm level. Power is assessed by examining whether the party secretary concurrently holds another key management position, such as chairman or CEO, thus allowing him or her to exert influence on the managerial decisions of the firm. We find that state-owned enterprises (SOEs) and firms with many employees are more likely to have a party secretary or a powerful party secretary than are other firms. Party secretaries are more likely to have political reliability but less professionalism than CEOs and other senior managers.