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This project explores the implications of political influence on business with reference to the party-building reform in Chinese state-owned enterprises (SOEs) since 2016. By utilizing this exogenous event, we have the chance that rarely available in the past to examine the causal inference of political control over corporate governance and firm performance. In addition to SOEs, our project also examines the impact of party building reform to privately owned enterprises who voluntarily incorporated party organizations into their internal governance system. The research result will further the understanding of the extent to which and the channels through which the state intervenes in the business decision of Chinese firms and how political intervention impacts firm performance.