An investment of millions by a private Chinese company in Longlin County, Guangxi, has faced the inconsistent and evasive actions of local government departments. Despite winning four times in administrative reviews and administrative lawsuits, the company’s legitimate rights have yet to be protected. This incident not only highlights the lack of credibility of local governments but also reflects the deterioration of China’s business environment and the chronic issue of corruption in officialdom.
According to a report by Henan TV’s “Big Elephant News” on May 16, Cen Haiyun, the general manager of Haiyun Auto Services Co., Ltd. Longlin Branch (referred to as “Haiyun Company”), recently shared the company’s two-year struggle for rights protection.
In 2020, Haiyun Company entered the market in Longlin, deploying 50 new energy taxis to effectively address the traffic chaos caused by rampant tricycles and motorcycle taxis. With the success of its operation, a shortage of capacity arose in the market, prompting Haiyun Company to apply for an additional 50 new energy taxis in December 2020.
On May 7, 2021, the minutes of the Longlin County Industrial Transportation Committee meeting “principally agreed” to the addition of vehicles by Haiyun Company, with the precondition of passing the assessment in August. Haiyun Company successfully passed the assessment and invested over 4 million yuan to purchase 50 new vehicles.
However, when the vehicles arrived, the Longlin County Transportation Bureau abruptly changed its stance.
Although an internal meeting in the Transportation Bureau deemed adding 50 taxis as “feasible and approved for deployment” and submitted a request to the county government on November 22, 2021, County Chief Huang Jiansheng only instructed to “present it for deliberation,” putting the matter on an indefinite hold.
In March 2022, the Longlin County Transportation Bureau refused to approve citing “market saturation,” just four months after their earlier “approval.” After Haiyun Company appealed for administrative review, the county government revoked the Transportation Bureau’s response. However, the Transportation Bureau again rejected approval on the grounds that the company “did not meet statutory requirements.”
Faced with this situation, Haiyun Company filed one administrative review and three administrative lawsuits, all of which they won. Nevertheless, the Longlin County Transportation Bureau still refused to process the company’s procedures. Even after the final loss in court, the Transportation Bureau again refused approval, citing the company’s failure to submit approval materials.
Audio evidence revealed that internal personnel at the Longlin County Transportation Bureau acknowledged: “Our bureau is on your side, we requested instructions, it’s just that they did not pass it at the county level.” The Bureau Chief, Yang Mingjie, bluntly stated: “I am just from an administrative institution of the county government. If the leaders do not agree, I dare not proceed.”
The company’s CEO, Cen Haiyun, shuttled back and forth between the Transportation Bureau and the county government but was constantly passed around. The Transportation Bureau insisted to “seek solutions from the county government,” while the county government claimed “this is the Transportation Bureau’s matter.” Cen Haiyun lamented, “They are adept at dodging responsibility and evading issues.”
The incident sparked strong attention online, with many netizens pinpointing the root of the problem as the unbridled local power, with most believing the issue lies with local leadership, possibly indicating rent-seeking behavior that directly affects the credibility of local governments and the business environment.
Some netizens commented, “The problem clearly lies with the county chief,” “Without benefiting, of course, they won’t approve,” “If the leaders don’t agree, even a court ruling wouldn’t matter,” “Don’t invest in those places if you have money.”
The ordeal faced by Haiyun Company undoubtedly epitomizes the deterioration of China’s business environment, once again sounding the alarm that under the ecosystem of rent-seeking and inaction in the Communist Party’s officialdom, the survival and development of private enterprises face severe challenges.
An article previously published by “Sina Finance,” titled “Urgently Prohibit and Stop Local Authorities from Detaining Private Entrepreneurs in Exchange for Money and Release for Financial Supplementary Income,” was authored by Professor Zhou Tianyong, Director of the National Economic Engineering Laboratory at Dongbei University of Finance and Economics, who had previously served as the Deputy Director of the International Strategic Research Institute at the Central Party School of the Communist Party of China.
In the article, Professor Zhou Tianyong disclosed that due to the financial difficulties at various levels of local governments, local party committees have assigned the task of supplementing local financial income to party-government-judicial agencies.
The article points out, “Due to the pressure of income and debt repayment, it is understandable. But to detain entrepreneurs suspected of bribery or even reported by people for providing financial income to the local finances through detentions in exchange for money, will undoubtedly lead to another economic disaster.”
Prior reports by “China Business” highlighted the case of Ma Yijia, a female minority entrepreneur, who, after undertaking projects like the Poverty Alleviation Relocation Project in Liupanshui, Guizhou, had been demanding payment for years. By the end of 2023, Ma Yijia was criminally detained by the local police on charges of “provoking trouble.”
Before Ma Yijia’s arrest, the lawyer and assistants handling her debt collection had already been criminally detained; all faced charges of “provoking trouble,” a charge known as a “pocket crime.”
In the backdrop of multiple high-level statements supporting private economy from the CCP, the cases of Ma Yijia and Haiyun Company are undoubtedly significant ironies.
In February of this year, Chinese leader Xi Jinping, in a symposium on private enterprises, mentioned that “the prospects for the development of the private economy are broad,” and stated that “private enterprises and entrepreneurs are demonstrating their capabilities at the right time.”
In response, “Lianhe Zaobao” quoted the perspective of Shen Meng, Executive Director of Hongsong Capital, interpreting from Xinhua News Agency’s common reporting, that the issues discussed at the private enterprise symposium were still the same old topics, and there seemed to be no clear direction on how to resolve the challenges facing the private economy.
Sun Guoxiang, a full-time professor at the International Affairs and Business Department at Nanhua University in Taiwan, previously told Epoch Times that the CCP’s conflicting policies are abundant, with the clash between political supremacy and economic development becoming increasingly severe. Despite the enactment of regulations promoting private enterprises, the mindset of controlling the private economy has not changed, leading to contradictory phenomena.