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Friday, September 24, 2021

ENTREPRENEURS HAVE TO TOE THE LINE #292

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Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

GOOD MORNING FROM LONDON

Mr Sun Dawu is the founder of Dawu, a successful private agricultural business group. Today he begins an 18-year prison sentence for fraud, attacking state organs + illegal occupation of land. It is a story that focuses on the evolving relationship between the Party and the Entrepreneurs.

Matters came to a head, yesterday 28 July 2021, at the end of a two week hearing in the Gaobeidan People’s Court in Hebei Province. In addition to his 18-year sentence, Sun was fined $460,000 and his Dawu Group received an RMB300m penalty. 8 others – family members + business partners – received sentences ranging from 2-12 years.

Sun was successful in turning a small village farm into a model town with its own schools, hospitals and hot springs. His co-operative style business was popular in the locality but his direct criticism of local officials became a challenge to State and Party power.

There is an echo of the treatment of Jack Ma whose star has dimmed, significantly, since he let loose in October 2020 with sustained criticism of China’s business regulators. Chinese entrepreneurs are encouraged to use their business skills to promote wealth + development but two points constantly re-emerge. First, they have to be loyal to the Party and, second, they have to prioritise national interests above profits.

There is a dynamic at work in China. Progress, prosperity + rising living standards can include a significant role for entrepreneurs – capitalists. They can make profits but they have to know their place. Economic achievement is one thing. Using it to challenge the political power of the Party is another and is not allowed or tolerated or encouraged. Freedom has its limits even in a surging China.

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