The government of Hangzhou is increasing its presence in the day-to-day operations of more than 100 companies in order to enhance the cooperation between the private and public sector, it said on Saturday. According to Chinese media, companies to see increased scrutiny include e-commerce giant Alibaba and automaker Geely.

Why it matters:  The move is in pursuit of an ambitious “New Manufacturing Plan” aimed at increasing manufacturing output through smart, green, and service-oriented supply-side reforms, according to the statement.

  • Against a backdrop of declining growth, the notion of the digital economy and manufacturing industry—together, the “double engine”—is gaining prominence.
  • Beijing is pledging support for the private sector while taking steps to renew influence over non-state owned enterprises, including some of China’s biggest companies.

Details: The government officials will smooth the communication between companies and administration, as Hangzhou’s firms implement various government programs to eliminate traditional production and integrate cloud-based smart manufacturing.

  • According to the statement, companies which will host the municipal officials have not yet been determined and it is unclear whether they will include foreign players, though state-owned media has identified Alibaba and Geely as program participants.

Context: The relationship between government and private sector is complex in China, and public security officials are already present in various Chinese companies for crime prevention and information monitoring.

  • Home to some of China’s brightest tech stars, Hangzhou in eastern Zhejiang Province is competing with other cities to become China’s next big tech hub.

Eliza was TechNode's blockchain and fintech reporter until July 2021, when she moved to CoinDesk to cover crypto in Asia. Get in touch with her via email or Twitter.

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