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China sends state officials to 100 private companies including Alibaba

SHANGHAI (Reuters) – China's top tech hub Hangzhou plans to assign government officials to work with 100 private companies including e-commerce giant Alibaba, according to state media reports, in a move likely to raise concerns about the growing role of state.

FILE PHOTO: An Alibaba Group logo is seen at an exhibition at the World Intelligence Congress in Tianjin, China on May 16, 2019. REUTERS / Jason Lee

The step underscores how the Chinese government and party authorities grow deeper. integrated into the private sector, as its economic sputters in the midst of an intensifying trade war with the United States.

The city of Hangzhou, home of Alibaba Group Holding Ltd ( BABA.N ), will appoint state officials to work with 100 local companies in eastern Zhejiang Province, the local government said on its website.

The directives, which were presented as a means of increasing the local manufacturing industry, did not mention the 100 companies covered by the policy, but state media reports said that Alibaba and car manufacturer Zhejiang Geely Automobile Holdings Ltd [GEELY.UL] would be among the companies.

Alibaba said the plan would not interfere with its operations.

"We understand this initiative … aims to promote a better business environment in support of Hangzhou-based companies. The government representative will act as a bridge to the private sector and will not interfere with the company's operations, ”Alibaba said in a statement.

Geely did not immediately respond to a request for comment.

Chinese law has long required private companies, including foreign entities, to set up formal party organizations.

Such groups were once seen as largely symbolic. In recent years, however, foreign executives have said that these have come under increasing pressure to let party representatives sway over business operations.

Domestic companies have also strengthened the party committees. In 2018, dozens of Chinese banks announced changes to their articles of association, giving more power to the party committees.

Reporting by Josh Horwitz; Editing by Miyoung Kim & Shri Navaratnam

Our Standards: The Thomson Reuters Trust Principles.

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