Authors Oscar Almén and Hanna Carlsson examined, among other things, Chinese laws, party directives, and policy documents, reviewed existing research, and conducted interviews with Swedish corporate representatives operating in China.
“The CCP’s influence over businesses is particularly significant in its impact on Chinese companies operating abroad. While it is an overstatement to claim that private Chinese firms act as agents of the CCP, the party can exert pressure on these companies to align with its goals. As such, it is prudent to limit the ability of Chinese companies to participate in activities such as procurement for critical infrastructure or key technologies,” says Oscar Almén, Deputy Research Director at FOI.
The report demonstrates that regulations and party rules, initially focused on state-owned enterprises, are increasingly being applied to private businesses.
“Over the past 15 years, the CCP has gradually increased its influence. While the party has pushed for stronger party leadership within the private sector, it has also become more common for state-owned enterprises to acquire stakes in private companies. All businesses are under pressure to align with party interests. Although the private sector is important to the CCP, the party will always prioritise national security and its own survival over the interests of private firms,” explains Hanna Carlsson, an analyst at the Swedish National China Centre.
Swedish companies report no direct influence
The researchers conducted eight interviews with Swedish nationals who do not have a Chinese background, representing six different companies. All interviewees had years of extensive experience conducting business in China.
“None of the interviewees reported that their operations in China were particularly affected by recent signals from the CCP. One person remarked that they had always understood that freedom in China was restricted and had adapted accordingly. However, it’s important to remember that, even though the interviews were anonymous, respondents may have been reluctant to share information that could harm their business interests,” said Oscar Almén.
Nevertheless, research suggests that political control creates unpredictability, which could undermine international investors’ confidence. Thus, the CCP’s growing influence may affect Swedish companies in China, even if they do not currently perceive direct challenges.
Golden Shares: A pathway to corporate boards
The report examines ownership structures, the presence of party organisations, and political signalling.
“To tighten control over major privately-owned Chinese tech firms, such as ByteDance (the owner of TikTok), a law was introduced allowing the creation of so-called “golden shares.” These give the CCP the right to appoint a representative to corporate leadership, even when holding as little as one percent of the company’s shares. The party has also clarified that all businesses are obligated to provide space for internal party organisations and to be receptive to the CCP’s interests,” says Hanna Carlsson.