At the start of last year, the Beijing-based magazine China Entrepreneur published an article titled “Private entrepreneurs are all on their way to jail,” which said that entrepreneurs in China were in jail or headed there.
This might be a bit of an exaggeration, but it does reflect the complicated legal and political environment that entrepreneurs face in China.
The article was quickly taken down, but the legal basis for it was explained by Capital Equity Legal Group director Chen Youxi (陳有西) in a speech on the theme of “The environment for survival of Chinese private enterprises and the reconstruction of economic penalties.”
Chen described the cases of former Greencool Technology Holdings and Kelon Group chairman Gu Chujun (顧雛軍), former China East Star Group chairman Lan Shili (蘭世立) and former Better Life chairman Tang Qingnan (唐慶南).
He concluded that if China does not overhaul its system of economic penalties, private entrepreneurs would always be headed for jail.
Look at what has happened to some well-known Chinese entrepreneurs since Chinese President Xi Jinping (習近平) came to power: Last year, Anbang Insurance Group chairman Wu Xiaohui (吳小暉) was thrown in jail, HNA Group cochairman Wang Jian (王建) died “accidentally” and Alibaba Group executive chairman Jack Ma (馬雲) “unexpectedly” announced that he would go into early retirement.
It looks as though when a private company reaches a certain size, any of these things could happen to the person in charge.
China has a policy of “letting the state sector advance while the private sector retreats.” Bank loans are much more freely available to state enterprises than private ones.
Last year, 24 listed companies were acquired by national and local state-owned enterprises.
There is also a policy of “party-building in private enterprises,” which means that the Chinese Communist Party (CCP) gets inside companies, interferes in their operations or even takes over their leadership.
An example of this trend is the Foreign Investment Law of the People’s Republic of China, which was enacted on March 15 and is to come into force on Jan. 1.
The law opens the door wider to foreign investment, but Article 34 says that foreign-funded enterprises must provide the government with investment information reports, which amounts to making companies conduct business with their pants down.
Article 35 states that Chinese authorities can subject someone to a “foreign investment security review,” which amounts to dangling a sharp political sword over their head.
Hon Hai Group chairman Terry Gou (郭台銘) wants to run in next year’s presidential election. He should take the fates of these other entrepreneurs as a warning. The best outcome for him would be to quietly retire like Ma and to hand his company over to the CCP.
If Gou does become president, will he use Taiwan as a bargaining chip to get better treatment for himself and Hon Hai? Only time will tell.
Yu Kung is a Taiwanese businessman operating in China.
Translated by Julian Clegg
On Sept. 3 in Tiananmen Square, the Chinese Communist Party (CCP) and the People’s Liberation Army (PLA) rolled out a parade of new weapons in PLA service that threaten Taiwan — some of that Taiwan is addressing with added and new military investments and some of which it cannot, having to rely on the initiative of allies like the United States. The CCP’s goal of replacing US leadership on the global stage was advanced by the military parade, but also by China hosting in Tianjin an August 31-Sept. 1 summit of the Shanghai Cooperation Organization (SCO), which since 2001 has specialized
In an article published by the Harvard Kennedy School, renowned historian of modern China Rana Mitter used a structured question-and-answer format to deepen the understanding of the relationship between Taiwan and China. Mitter highlights the differences between the repressive and authoritarian People’s Republic of China and the vibrant democracy that exists in Taiwan, saying that Taiwan and China “have had an interconnected relationship that has been both close and contentious at times.” However, his description of the history — before and after 1945 — contains significant flaws. First, he writes that “Taiwan was always broadly regarded by the imperial dynasties of
The Chinese Communist Party (CCP) will stop at nothing to weaken Taiwan’s sovereignty, going as far as to create complete falsehoods. That the People’s Republic of China (PRC) has never ruled Taiwan is an objective fact. To refute this, Beijing has tried to assert “jurisdiction” over Taiwan, pointing to its military exercises around the nation as “proof.” That is an outright lie: If the PRC had jurisdiction over Taiwan, it could simply have issued decrees. Instead, it needs to perform a show of force around the nation to demonstrate its fantasy. Its actions prove the exact opposite of its assertions. A
A large part of the discourse about Taiwan as a sovereign, independent nation has centered on conventions of international law and international agreements between outside powers — such as between the US, UK, Russia, the Republic of China (ROC) and Japan at the end of World War II, and between the US and the People’s Republic of China (PRC) since recognition of the PRC as the sole representative of China at the UN. Internationally, the narrative on the PRC and Taiwan has changed considerably since the days of the first term of former president Chen Shui-bian (陳水扁) of the Democratic
RSS