China’s economy is on the decline and finances are tight, leading local authorities to engage in cross-provincial “distant water fishing” of businesses from other regions. According to recent reports, a privately-owned enterprise in Shanghai has faced being “fished at distant waters” by out-of-town authorities twice and has now had its assets seized by the local court, pushing it to the brink of bankruptcy.
Shanghai-based Haoya Qizhi (Shanghai) Intelligent Technology Co., Ltd. (referred to as “Haoya Company”) is a high-tech enterprise registered in Qingpu District of Shanghai, founded 22 years ago. Media personality Liu Hu and lawyer Wu Yingjiao disclosed in a publication on June 10th that the company is facing drastic financial difficulties due to these legal battles.
The company’s executive expressed, “We have faced ‘distant water fishing’ by out-of-town judiciary twice, along with a ‘door-to-door-style seizure,’ hanging by a thread for survival. Despite navigating through complex and lengthy judicial procedures to get out of trouble, we ultimately couldn’t escape the local Qingpu District court’s ‘nearshore casting of net’, leading our business to be cut off completely, and now facing bankruptcy!”
The incident dates back to 2025 when a Zhejiang enterprise sued Haoya Company over a contract dispute. In February 2026, Qingpu court’s first-instance judgment ordered Haoya to pay the Zhejiang enterprise 1.13 million yuan. Haoya Company appealed the decision.
During the second-instance trial on May 13th, Judge Tupu of Qingpu Court issued an order to freeze and seize Haoya Company’s assets amounting to 6.75 million yuan.
Haoya argued that as the case had already entered the second-instance process, the first-instance court’s decision to freeze assets for a case that had been moved was a clear overreach. They submitted a petition for reconsideration to the Qingpu Court, which was rejected by Judge Tupu.
Subsequently, Haoya Company filed a criminal lawsuit against Judge Tupu of Qingpu Court for allegedly making an unjust civil ruling. The Shanghai Second Prosecution Department accepted the case.
On June 5th, a court official surnamed Yang from Qingpu Court called Haoya’s executive, admitting that Judge Tupu’s decision was problematic and stating it was due to “negligence,” urging the company to give young judges a chance to grow.
However, Haoya Company did not accept this explanation, emphasizing that a “minor mistake” by a judge could have severe consequences for a business’s survival.
The company’s executive lamented, “As an entrepreneur who founded and operated the enterprise for over 20 years, making significant contributions to Qingpu’s tax revenue, it is heartbreaking to see the high-tech business crumble. Since we cannot focus on production and operation, we will spend the rest of our lives petitioning and bringing lawsuits to fight for a legal business environment for private enterprises!”
The executive further stated, “As a once successful entrepreneur now forced into filing lawsuits and petitioning due to various illegal actions, it is truly tragic!”
Following the exposure of the incident, many netizens criticized the situation, with some commenting, “Using a company’s money to pay for a judge’s education? How ironic.” “The cost of this ‘flaw’ is indeed significant.” “When bankrupting others, do they give them a chance too?”
Some expressed hopes for more companies like Haoya, with one remarking, “North Sea in Guangxi is even more powerful.”
The term “distant water fishing” originally referred to fishing activities by fishing vessels in international waters or other countries’ exclusive economic zones. However, starting from the second half of 2024, this term began to be used to describe the enforcement authorities’ practice of seizing privately-owned entrepreneurs outside their jurisdiction, freezing, and even transferring assets of businesses and individuals from other regions. It is widely believed that this behavior of “distant water fishing” by enforcement authorities is related to the financial constraints of local Chinese communist party governments since 2023.