BlackRock and Fidelity backed China’s Communist party writing itself into company law this year, according to disclosures that show some of the world’s largest asset managers voted in favour of ranking the party above the boards of state-owned companies.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have so far amended their articles of association to embed the party, rather than the Chinese state, at the heart of each group. More are expected to do so as part of a push by Beijing to improve productivity and transparency at SOEs, which account for about a fifth of the country’s economic output.
Party committees have been a well-known but often unwritten fact of life for SOEs but the decision to bring them out of the shadows has prompted soul-searching among international investors who are under increasing global pressure to stand up to company boards.