Against the backdrop of China’s continued economic downturn and the Communist Party’s strengthened political control, the environment for entrepreneurs is becoming increasingly challenging. Li Shuqing, an entrepreneur from Qingdao, has faced repeated suppression by the system, and was ultimately forced to flee to the United States in June this year. With thirty years of experience, he has witnessed the comprehensive corruption and high pressure exerted by the CCP from local to military, from the market to the judiciary.
Li Shuqing, born in Qingdao, Shandong Province, worked at the Qingdao Port Authority in the 1980s, starting from an ordinary worker to become a deputy team leader and a Communist Youth League cadre. However, it was a evaluation for the “May 1 Labor Medal” and the subsequent events of June 4 that made him see through the false nature of the CCP system for the first time. “Many of the achievements promoted at the meeting were actually accomplished by me and my colleagues together,” he said. “At that time, I felt that everything was fabricated, and I no longer believed them.”
In 1993, Li Shuqing left the system to start his own business and founded Qingdao’s first private express delivery company. Initially, the business thrived, filling him with hope. However, the good times did not last. By 1996, when the company had grown to more than ten employees, four cars, and two motorcycles, with monthly sales exceeding 150,000 to 160,000 yuan, the tax bureau came knocking at the door demanding back taxes and requiring registration within a deadline. Subsequently, they instructed him to apply for a business license from the post office.
To his surprise, the post office not only forcibly stipulated that he could only handle small packages weighing from 0.5 kilograms to 5 kilograms but also confiscated a batch of express mail. This action led customers to mistakenly believe that he was operating illegally, causing his business to halve almost instantly. Li Shuqing helplessly said, “That was when I realized that the state was controlling individual development. The post office and I belong to the same industry, it is a business entity, yet it can still control me, is this reasonable?”
Since then, he realized, “The problem is not in the unit but in the system, the CCP controls everything, not allowing private enterprises to compete.” In 2001, after China joined the WTO and opened up the insurance brokering industry, Li Shuqing shifted to the insurance sector. He collaborated with Shanghai Dongda Insurance Brokers (a state-owned enterprise), engaged in the emerging car insurance co-insurance business, developed risk assessment plans for municipal projects, and led the local digital management integration. He mentioned that while government departments and industry associations should not engage in business operations by logic, the insurance regulatory bureaus in Qingdao and Jinan colluded with the public security bureau, engaged in illegal operations, and took over the market. “They completely imitated our practices: after taking our plans, they no longer cooperated with us, setting up an illegal operational team behind closed doors.”
Later, Li Shuqing went to Liaocheng to seek development opportunities but found the local bureaucracy to be even more brazen. He described Qingdao and Jinan as at least engaging in covert illegal activities, showing a facade of righteousness, while Liaocheng was “more hysterical and more rogue,” as a deputy secretary of the municipal government, Wang Hongbin, personally led the establishment of an insurance agency without hiding its illegal operation. Eventually, this deputy secretary was “doubly regulated.”
After facing obstacles in various places, Li Shuqing realized the suppression of private enterprises by local officials. He adopted a strategy of “mastering key technologies and selective cooperation” according to the actual needs of the Dongying municipal government and public security bureau. The business initiated soon became the best-performing case nationwide in the second year. Subsequently, the company grew rapidly, with nearly 300 employees by 2012 and an annual revenue reaching 300 to 400 million Chinese yuan.
Just as the business was thriving, in 2012, the CCP authorities forcibly shut down the company under the guise of “market monopoly” by terminating the “new car joint insurance” project. Li Shuqing recalled that Zhang Qing, the female deputy director of the Shandong Provincial Insurance Regulatory Bureau at the time, demanded him to dissolve the company within a week, but he refused on the spot, saying, “I operated legally, and a business with nearly three hundred employees that I had built with nearly a decade of effort cannot simply be closed.”
After the negotiations broke down, Zhang Qing ordered in the following month that all insurance companies in Dongying were forbidden to cooperate with Li Shuqing, causing his business to nearly come to a standstill within three months. The number of employees plummeted from nearly three hundred to around ten, the company’s operations were paralyzed, and it ultimately shut down in 2014. “Since then, I have been at odds with the CCP and have made up my mind not to have any dealings with them.”
Starting from 2013, Li Shuqing ventured into the building materials industry. With over ten years of industry experience, he deeply understood the corruption of the CCP and the darkness of the industry. He bluntly stated that none of the twenty to thirty large-scale projects he participated in were completed without using substandard materials. “This industry is incredibly dark and rotten to the core,” he said.
He mentioned that the Housing and Urban-Rural Development Bureau categorizes and grades all products entering the market through various departments and organizations under it, establishing a strict control system. Without private deals or collusion with them, it is nearly impossible to obtain market access qualifications. Even a small switch is under the control of CCP bureaucrats.
He added that nearly all resources are monopolized by the government and state-owned enterprises, conducting clandestine transactions. For instance, a project costing one hundred million yuan would almost certainly not be awarded the contract without providing an additional twenty million yuan in profit sharing. These unwritten rules have long become the “basic threshold” of the industry.
He further stated that none of his projects could be settled smoothly and had to go through lengthy legal procedures. All due to the price he paid for refusing to collude with them.
Looking back, Li Shuqing commenced his entrepreneurship in 2014, launched a product by the end of 2015, and officially entered the market the following year. His team developed an efficient energy-saving wall structure mainly using concrete, which could replace traditional insulation layers. It was a rare high-end building material product in the country. This wall structure itself had insulation function, not only energy-saving and environmentally friendly but also simplified the construction process. To prevent CCP bureaucrats from seizing the technology, he never applied for a patent.
His product received positive feedback in multiple pilot projects, attracting attention from local governments and construction regulatory authorities. Soon after, the Qingdao Municipal Housing and Urban-Rural Development Bureau proactively contacted him through the Qingdao Construction Energy Conservation Association and sent a formal invitation letter, inviting him to join the association. Deputy Director Qiu Yulong of the association indicated on the spot that he agreed verbally and suggested that Li Shuqing develop group standards for the new product for inclusion in the catalog.
In order to obtain market access qualifications, Li Shuqing spent over three million yuan from his own pocket completing a full set of technical documents for the group standards. However, Qiu Yulong hinted at “offering some benefits privately,” meaning that after the product enters the catalog, a commission should be paid. Li Shuqing refused, and the product was blocked from entering the market. He said, “Even for a light bulb or a switch, as long as it is not in their catalog, it cannot be used in the market. The Housing and Urban-Rural Development Bureau controls companies through this system to force you to comply.”