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The article that I linked goes into great detail about what the legal relationship between the employees and the union committee is, what level of control the u

The article that I linked goes into great detail about what the legal relationship between the employees and the union committee is, what level of control the union committee actually has over the shares, what happens if the company dissolves, and so on. Just saying that the union is a member of the national federation, and that the company is therefore owned by the Communist Party, is grossly inaccurate. The bottom line is that the union committee acts as a legal vehicle that allows more than 100 employees to hold shares, and that it can't just do whatever it likes with the shares, because of its legal responsibilities to the employees. This structure was used because decades ago, it was not possible (or at least legally tricky) for large private companies in China to issue shares to their employees.

belter 5y ago
"What’s the Deal with Huawei’s Ownership?" https://sayari.com/resources/huaweis-ownership-opaque-unusual/ https://sayari.com/resources/huaweis-ownership-opaque-unusua... "Huawei claims to be owned entirely by its employees, but verifying this claim is a tricky proposition...However, comparing Huawei to other Chinese corporations reveals that Huawei’s ownership is highly unusual." .... "Using Chinese corporate data, we determined that Huawei’s ownership structure is very uncommon, particularly for a company of its size. Fewer than three hundredths of one percent (0.0249%) of active Chinese corporations in our dataset are owned by trade union committees, like Huawei." "...We set out to answer this question using Sayari’s database of 55 million Chinese corporate entities... ...Of these 55 million Chinese corporate entities, approximately 38 million are active." "...But ownership by a “labor union committee” (工会委员会), like the Huawei case, is very rare. We identified just 4,547 active Chinese corporate entities that list a labor union committee as a shareholder. This represents just 0.0249% of the active non-household enterprise companies in our dataset. Among companies operating in the technology sector, ownership by a labor union committee is even more rare. Only 794 active technology companies in our database—or 0.0201%—are owned directly by a labor union committee..." "...Of these 794 companies, Sayari was able to identify the registered capital in Chinese Renminbi for 526. Of these, just three had registered capital greater than 1 billion RMB (approx. USD $148 million); Huawei has registered capital of more than 16 billion RMB. Chinese companies of this size usually are major state-owned enterprises, publicly-traded, or both. In other words, it is practically unheard of in China for a labor union committee to own a company of Huawei’s size, scope, and global reach..."
- DiogenesKynikos 5y ago
  The article I linked to explains the origins of Huawei's ownership structure. It made sense when it was set up decades ago, though it's not the way that a company would be set up now. Yes, it may be unusual for a company this size to be set up this way, but there are very few companies of this size anyways. There does not appear to be anything nefarious about the use of the labor union committee as a vehicle for employee share ownership. It just appears to have been a reasonable way to set things up when Huawei was starting out.
  - belter 5y ago
    Not really: "Who Controls Huawei?" https://www.ui.se/globalassets/butiken/ui-paper/2020/ui-paper-no.-5-2020.pdf https://www.ui.se/globalassets/butiken/ui-paper/2020/ui-pape... "Technical dependency and the issue of party-state control over Huawei" "...While at first glance Huawei’s line of defence appears convincing, there are also reasons for doubt. It is true that the company is privately owned by its employees, but there is reason to believe that ownership does not come with control..." "...Huawei has not only profited from party-state support, but is operating in a specific political, legal and economic environment that makes it impossible for the company to be fully independent..." "....The widespread distinction between privately owned enterprises (POEs) and state ownership is not decisive in China. It is not ownership but the issue of “state capture”that is pivotal... " "...Following an official request, Huawei has confirmed to the author of this paper that party organisations exist within the company in accordance with Chinese law. The company has provided assurances that party organisations have no influence on the company’s business operations and that it is run by an independent management team. The party organisations are mainly responsible for educating employees. The general findings on the deep linkages between the economic and political elites, however, call into question whether such differentiation is adequate in the context of China’s political economy..." "...China lacks an independent judiciary. While theCCP government speaks of strengthening the role of law in its governance, it follows a rule by law principle and does not intend to implement the rule of law. The CCP has an essentially instrumentalist understanding of law. Law is seen not as a constraint on power, but as a means of power. This means that legal certainty does not exist in areas of crucial political importance. Hence, laws do not provide reassurance against political interference in the business operations of Chinese companies..." "...China’s Intelligence Law,raise even further doubts about whether the law could shield private sector companies from political interference. Article 7 of the Intelligence Law enacted in 2017 and amended in 2018 requires any organisation and citizen to “support, assist in and cooperate in national intelligence work”..." "...Scepticism over Huawei’s independence from party-state control does not just stem from the political, legal and economic environment in which it operates....Huawei’s founder, Ren Zhengfei, is widely believed to have a past in China’s People’s Liberation Army. His daughter and the company’s Chief Financial Officer, Meng Wanzhou, is suspected to have held a public affairs passport.... A widely discussed and controversial analysis of the CVs of leading Huawei engineers found a large overlap with China’s security apparatus..." "...This clearly demonstrates that the main control over Huawei does not lie with the employees of the company, who can only choose 83 people from a preselected list of 109 candidates, but with the nomination teams that hand-pick these people using vague criteria. Whoever wants to control Huawei needs to control the nomination teams. There are no adequate checks in place to ensure that it is not the Chinese Communist Party and its organisations within the company that are the ones exercising such control...." "...What sparks further suspicion of the process is that none of the Huawei employees I have talked to was aware of the nomination process, even though it turns out that real power of selection lies with the nomination teams..." "...In the light of these four factors – the general level of independence of the POEs, the legal environment and Intelligence Law, state support for Huawei and the company’s governance structure – it is very difficult to reject the claims of Huawei critics that the company is more than just a privately run company striving for economic profit..."

belter 5y ago

"What’s the Deal with Huawei’s Ownership?" https://sayari.com/resources/huaweis-ownership-opaque-unusual/ https://sayari.com/resources/huaweis-ownership-opaque-unusua... "Huawei claims to be owned entirely by its employees, but verifying this claim is a tricky proposition...However, comparing Huawei to other Chinese corporations reveals that Huawei’s ownership is highly unusual." .... "Using Chinese corporate data, we determined that Huawei’s ownership structure is very uncommon, particularly for a company of its size. Fewer than three hundredths of one percent (0.0249%) of active Chinese corporations in our dataset are owned by trade union committees, like Huawei." "...We set out to answer this question using Sayari’s database of 55 million Chinese corporate entities... ...Of these 55 million Chinese corporate entities, approximately 38 million are active." "...But ownership by a “labor union committee” (工会委员会), like the Huawei case, is very rare. We identified just 4,547 active Chinese corporate entities that list a labor union committee as a shareholder. This represents just 0.0249% of the active non-household enterprise companies in our dataset. Among companies operating in the technology sector, ownership by a labor union committee is even more rare. Only 794 active technology companies in our database—or 0.0201%—are owned directly by a labor union committee..." "...Of these 794 companies, Sayari was able to identify the registered capital in Chinese Renminbi for 526. Of these, just three had registered capital greater than 1 billion RMB (approx. USD $148 million); Huawei has registered capital of more than 16 billion RMB. Chinese companies of this size usually are major state-owned enterprises, publicly-traded, or both. In other words, it is practically unheard of in China for a labor union committee to own a company of Huawei’s size, scope, and global reach..."

DiogenesKynikos 5y ago
The article I linked to explains the origins of Huawei's ownership structure. It made sense when it was set up decades ago, though it's not the way that a company would be set up now. Yes, it may be unusual for a company this size to be set up this way, but there are very few companies of this size anyways. There does not appear to be anything nefarious about the use of the labor union committee as a vehicle for employee share ownership. It just appears to have been a reasonable way to set things up when Huawei was starting out.
- belter 5y ago
  Not really: "Who Controls Huawei?" https://www.ui.se/globalassets/butiken/ui-paper/2020/ui-paper-no.-5-2020.pdf https://www.ui.se/globalassets/butiken/ui-paper/2020/ui-pape... "Technical dependency and the issue of party-state control over Huawei" "...While at first glance Huawei’s line of defence appears convincing, there are also reasons for doubt. It is true that the company is privately owned by its employees, but there is reason to believe that ownership does not come with control..." "...Huawei has not only profited from party-state support, but is operating in a specific political, legal and economic environment that makes it impossible for the company to be fully independent..." "....The widespread distinction between privately owned enterprises (POEs) and state ownership is not decisive in China. It is not ownership but the issue of “state capture”that is pivotal... " "...Following an official request, Huawei has confirmed to the author of this paper that party organisations exist within the company in accordance with Chinese law. The company has provided assurances that party organisations have no influence on the company’s business operations and that it is run by an independent management team. The party organisations are mainly responsible for educating employees. The general findings on the deep linkages between the economic and political elites, however, call into question whether such differentiation is adequate in the context of China’s political economy..." "...China lacks an independent judiciary. While theCCP government speaks of strengthening the role of law in its governance, it follows a rule by law principle and does not intend to implement the rule of law. The CCP has an essentially instrumentalist understanding of law. Law is seen not as a constraint on power, but as a means of power. This means that legal certainty does not exist in areas of crucial political importance. Hence, laws do not provide reassurance against political interference in the business operations of Chinese companies..." "...China’s Intelligence Law,raise even further doubts about whether the law could shield private sector companies from political interference. Article 7 of the Intelligence Law enacted in 2017 and amended in 2018 requires any organisation and citizen to “support, assist in and cooperate in national intelligence work”..." "...Scepticism over Huawei’s independence from party-state control does not just stem from the political, legal and economic environment in which it operates....Huawei’s founder, Ren Zhengfei, is widely believed to have a past in China’s People’s Liberation Army. His daughter and the company’s Chief Financial Officer, Meng Wanzhou, is suspected to have held a public affairs passport.... A widely discussed and controversial analysis of the CVs of leading Huawei engineers found a large overlap with China’s security apparatus..." "...This clearly demonstrates that the main control over Huawei does not lie with the employees of the company, who can only choose 83 people from a preselected list of 109 candidates, but with the nomination teams that hand-pick these people using vague criteria. Whoever wants to control Huawei needs to control the nomination teams. There are no adequate checks in place to ensure that it is not the Chinese Communist Party and its organisations within the company that are the ones exercising such control...." "...What sparks further suspicion of the process is that none of the Huawei employees I have talked to was aware of the nomination process, even though it turns out that real power of selection lies with the nomination teams..." "...In the light of these four factors – the general level of independence of the POEs, the legal environment and Intelligence Law, state support for Huawei and the company’s governance structure – it is very difficult to reject the claims of Huawei critics that the company is more than just a privately run company striving for economic profit..."