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
The National Immigration Agency on Monday confirmed that the majority of foreign residents in Taiwan would once again be excluded from the government’s stimulus voucher program. The NT$5,000 Quintuple Stimulus Voucher would be available to 140,000 foreign spouses of Taiwanese and 16,000 Alien Permanent Resident Certificate holders, but about 870,000 Alien Resident Certificate (ARC) holders would be excluded from the program, regardless of whether they pay taxes. The government has not offered any explanation, but some have speculated that the intention is to prevent migrant workers from receiving the vouchers. Many migrant workers are from Southeast Asian countries and work as
Within the span of a generation, a new super-rich class emerges from a society in which millions of rural migrants toiled away in factories for a pittance. Bribery becomes the most common mode of influence in politics. Opportunists speculate recklessly in land and real estate. Financial risks simmer as local governments borrow to finance railways and other large infrastructure projects. All of this is happening in the world’s most promising emerging market and rising global power. No, this is not a description of contemporary China, but rather of the US during the Gilded Age, from about 1870 to 1900. This
I first met Tsai Ing-wen (蔡英文) in 1999, when I was Acting Director of AIT, as Darryl Johnson had just left and Ray Burghardt had not yet arrived. She was a young aide for then-President Lee Teng-hui (李登輝). President Lee just had enunciated a new theory, which came to be known as the “state-to-state” principle, in an interview with a German newspaper. Beijing had predictably gone berserk and was trying to get Washington to come down heavily on President Lee. In the midst of all this, Tsai and I met to discuss the situation. I took a liking to this
It might have been an inelegantly, even ineptly, executed pivot, gratuitously alienating key allies, but by leaving Afghanistan and forming a security pact with Australia and the UK in the Indo-Pacific, US President Joe Biden has at least cleared the decks to focus on his great foreign policy challenge — the systemic rivalry with China. Yet the concern now is how quickly this rivalry could escalate, especially regarding Taiwan. The linchpin of the US alliance system in south-east Asia, Taiwan is the biggest island in the first island chain, the group of islands that keeps China blocked in. It is China’s
RSS