Chinese authorities offer reassurance to worried entrepreneurs

March 08, 2019 07:01
A military police officer stands guard outside the Great Hall of the People in Beijing. China should step up efforts to build a new type of relationship between the government and the business sector. Photo: Reuters

China’s policy always swings from one end to the other. The government has been cracking down on private enterprises in recent years, which has battered the confidence of Chinese entrepreneurs.

However, the state policy is now shifting to another extreme as the nation struggles with faltering economic growth.

Sun Lian, the deputy procurator-general of the Supreme People’s Procuratorate, China’s highest prosecutor’s office, said on the sidelines of the annual “Two Sessions” that “we should not arrest business owners who have committed trivial offenses like small amounts of bribery”.

Sun said when he visited a certain province during an inspection, he found that several dozen executives of some of the top 100 private companies in the area had been arrested.

Workers were laid off and the companies stopped production as a result. Local tax revenues suffered as well.

He admitted that the political environment has not been friendly to private enterprises in recent years.

Some government cadres demanded party leadership over private enterprises and asked private firms to share their profits with labor unions.

Such demands had caused widespread panic among entrepreneurs until President Xi Jinping pledged unwavering support for the private sector in November.

Sun said the bottom line now is that “we should not arrest business owners for no good reason. If the boss is arrested, the company will be in trouble. Therefore, we should keep the dialogue open as long as corporate owners cooperate in the investigation process.”

Despite the drastic shift in government stance, it would take time to restore confidence among Chinese entrepreneurs.

All in all, China should step up efforts to build a new type of cordial and clean relationship between the government and the business sector in the long run, enabling private firms to operate smoothly without resorting to bribery.

This article appeared in the Hong Kong Economic Journal on March 7

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist