The Chinese Regime Discriminates Against Private Firms, Says Former Entrepreneur

August 9, 2020 Updated: August 9, 2020

Former entrepreneur and politician Wang Ruiqin wrote an open letter in May to all members of the communist regime hierarchy, calling on them to oust Chinese leader Xi Jinping. In an interview with The Epoch Times and its sister media NTD, she recounts the torment she has endured as the owner of a private business in China.

“Every Chinese business owner has a history of blood and tears. … The degree of hardships is beyond imagination,” said Wang.

The ‘Three Mountains’ That Kill Private Businesses

Wang ran a successful real estate business in Hainan, the smallest and southernmost province in China. In 1997, her company became one of the business projects promoted by Qinghai Province in northwest China.

Wang explained, “I grew up in Qinghai and I had a deep affection for it. I just wanted to do something for Qinghai.” She believed that a high-end hotel was what the relatively poorly developed province needed.

“We had our mind on the famous Huangshui River, a tributary of the Yellow River upper reaches,” said Wang. She built the Donghu Hotel along the river bank, which had over 200 suites and various restaurants. It opened in July 2001 and the monthly revenue was nearly 1 million yuan (approximately $143,000). It became the premier business hotel in the area.

At the same time, Wang was appointed as a CPPCC delegate of Qinghai. CPPCC, the Chinese People’s Political Consultative Conference, is the Chinese Communist Party’s (CCP) political advisory body. It takes part in the “Two Sessions,” an annual meeting of the regime’s rubber-stamp legislature, the National People’s Congress (NPC), to enact policies and agendas.

In April 2002, without notice, the local government started road construction right in front of the hotel forcing the business to close. Wang said: “The hotel was newly built, and now the local section of Qinglan Expressway (route G22) was under construction. The expressway exit passed right in the front of the hotel, completely blocking the entrance.”

When construction was finally completed, the hotel was restored and reopened. Not long after, the government began the second phase of construction, and the hotel was again forced to close.

“We were closed for three years and the revenue losses were substantial. The interest on a loan was 30 million yuan [approximately $4.3 million], while income losses totaled 100 million yuan [more than $14 million],” said Wang.

Even though she was a CPPCC delegate, her complaint would not even allow her to get a one-vehicle laneway for the hotel. Wang said: “The governments of China’s third- and fourth-tier cities are barbaric. Their construction processes and management are barbaric. They are not concerned with your business losses; so you are left to struggle on your own.”

In 2007, Donghu Hotel was sued by Qinghai Bank for non-payment of the loan. “We were victimized by the government. For three years we haven’t been able to run the business. We demanded that both interest and penalty interest be reduced or exempted as appropriate.”

However, the court ordered 20 million in interest be paid in accordance with the requirements of the state-owned bank. Wang said: “I initially borrowed 36 million yuan and the court ordered us to pay 20 million yuan. That’s 10 million in interest and 10 million in penalty interest. It’s unfair,” said Wang

In the course of the lawsuit, someone suggested that Wang could solve this problem by giving Qinghai Bank underwriters a kickback—a 20 million yuan interest debt would require a bribe of two to three million yuan. “But I am a tough [business] owner and I won’t pay the money. I think we have been wronged. We are a real business. Why should we have to bribe anyone?”

Wang continued, “The bank does not accept any payment plan, nor does it accept mortgages on property or villas. It only accepts a lump sum cash payment. It just makes things difficult, and the purpose of making things difficult is to force you to ask for money.”

Since Qinghai Bank and Wang couldn’t reach a settlement, Qinghai High Court put the case on hold in 2009.

Five years later, Qinghai Bank reopened the case. By then, the interest added up to 120 million yuan, which meant a bribe would cost tens of millions to meet the fee of 10 to 20 percent of the interest owed. Wang said, “I am a victim and I am a Christian, why should I have to bribe people?”

The case was taken to the Supreme Court, but it has not been resolved.

Through this lawsuit, Wang realized there were “three mountains” or obstacles—the government, the finance institute, and the judicial system—that were collectively bullying private businesses.

“I understood how much the Xi administration has tormented people,” said Wang. She decided to take matters into her own hands.

Wang published an open letter on May 21, the day the Two Sessions commenced, to the NPC and CPPCC members asking them to vote Xi out of office.

After her letter was published, Beijing set up a “616 special case team” to investigate her relatives and more than 20 businesses she had contacted, and inspected her books and even employees who had left years ago. She said that the scope of the investigation was far beyond anything she could have imagined.

Her company’s assets were frozen and her immediate family and other relatives were harassed. On June 22, she decided to sever ties with her relatives, including her children, for their safety.

“This is how they are persecuted—those who work hard to promote democracy for the city and the nation,” Wang said. “Everyone should stand up, like me.”

Wang is now living in exile in the United States.

Tough Business Environment in China

Back in 2015, Wang published an article criticizing the hardships that private businesses encounter in modern day China. She said, “After more than 30 years of development, private businesses have become an indispensable and important part of China’s economic and social development, creating more than 60 percent of the GDP, and even exceeding 80 percent in some provinces, and providing employment for 219 million people.” Still, private businesses are in a predicament.

Wang explained, “First of all, at the legal level, domestic private owners are treated unfairly compared to state-owned and even foreign-owned businesses. There’s no protection or security.” All governmental sectors will do everything to ensure they will get some benefits from privately-owned businesses, and if they don’t, then they’ll block all access to those businesses, she said.

“Taxes are especially heavy and there are even double taxes. You can barely make ends meet because of the taxes. If you want to make a profit, the system has so many loopholes that can be used to take advantage of you. The purpose is to promote collusion.”

“All [government] departments will harass private businesses. From top to bottom, everyone in the system will try to make money off you. They don’t do this to the state-owned enterprises or foreign businesses; only private enterprises are objects of extortion.”

Wang explained that private business owners spend at least 50 percent of their time and energy dealing with the government. A good connection and relationship are the basic survival tools for private businesses—that’s the characteristic of Chinese business under communist rule.

She said, “Some small businesses, especially those jointly owned by husband and wife teams, are especially challenged. There’s no guarantee of any sort. Anyone, using any excuse, can end your business. Removing the hurdles costs a lot of money.”

She also explained that domestic media reports are totally biased. “There’s no reporting about the efforts, the hard work, the contributions, or economic promotion of the private industries. They only publish articles containing distortion and slander about how private businesses are evading taxes or are involved in collusion.”

“Why the collusion and bribery? The regime forces them to go that route,” said Wang. She explained that every official in the regime, including the prosecutors, lawyers, and the courts in the legal system, use all their power to blackmail private business owners. Very few have fought back like Wang, even though she has paid a high price for her actions.

In summarizing 30 years of experience and observation, Wang said, “The CCP rejects and opposes private enterprise. It is only because state-owned enterprises are so corrupt, incompetent, and inefficient that they count on private enterprises as a last resort. However, the CCP fundamentally does not welcome or trust private enterprise.”

It is precisely because of the precariousness of private enterprises that some owners protect themselves by becoming a delegate of the CPPCC or the National People’s Congress. “One political aura is a kind of identity protection. For anything to happen, there is at least one prerequisite. First, they must deprive you of your CPPCC membership before the arrest. Using this process gives them a little more time to prepare, which makes it attractive. This is how sad private enterprise is.”

Calling on Private Business Owners to Support Democracy

Wang said the regime discourages many private owners from having their children take over their businesses. “Basically, no one is willing to invest now,” she added. Instead, the majority of them are thinking of how to secure and protect their assets by moving to another country.

“Without democracy, the private owner’s business will go nowhere. They will always become the victims of the next slaughter.”

“We should stand up and support people and organizations devoted to promoting democracy in China.”

“There are many people, including intellectuals and successful people in various fields, who hold the same idea. But they simply dare not say it or cannot say it.”

“In fact, many officials and leaders of various levels know it as well. This country is rapidly heading towards disaster.”

The pandemic and the floods have brought difficulty to the Chinese people in the mainland. “My heart aches deeply,” Wang said. She is even more determined to stand up and call on people to recognize the source of the calamities—the Communist Party.