In an interview, Haitao Zhao, a well-known young entrepreneur from Shandong Province who fled to the United States last year, expressed his deep understanding of the saying, “The end game for private enterprises is bankruptcy, and for private entrepreneurs, it’s prison.” According to Zhao, this reflects his own experiences.
In recent years, the Chinese authorities have introduced measures apparently aimed at promoting the development of private enterprises. In July last year, the State Council issued 31 measures to promote the growth of private enterprises, followed by the establishment of a bureau for private economic development under the NDRC. However, the reality for private entrepreneurs tells a different story.
Zhao, once an admired entrepreneur, rose to become the chairman of a large conglomerate in Shandong Province at a young age, with dozens of subsidiaries under his leadership. Little did he know that a few years later, he would be crossing the southern border armed with a machete, risking his life fleeing through tropical rainforests.
He described how various levels of government or powerful entities are constantly seeking ways to “harvest” from the public, coupled with the uncontrollable power of the Chinese Communist Party. Even if one is a law-abiding entrepreneur, once targeted by authorities or influential figures, they become victims of exploitation and endure great suffering.
During his university days as the student union president, Zhao could have pursued a teaching career but chose to venture into international trade at an import-export company instead. His hard work and determination led to the success of his e-commerce company, which quickly became a leader in the industry. However, the economic stimulus policies implemented by the central bank in 2008 created a bubble that eventually burst, leading to a series of challenges for Zhao’s enterprises.
His innovative financial strategies and rapid expansion made his conglomerate a target for frequent visits from major financial institutions and banks, suggesting going public or collaborations. However, this prosperity also sowed the seeds of crisis as the relationships with government officials could become contentious, leading to unforeseen consequences.
Troubles began when Zhao became entangled in a legal dispute with a state-owned enterprise affiliated with a ministry. Despite an extensive investigation by law enforcement, Zhao found himself labeled a fugitive and subjected to various forms of harassment and pressure.
Having his passport revoked and enduring asset seizures by authorities, Zhao felt compelled to escape the grip of the Chinese legal system. With the help of friends, he navigated through perilous conditions, finally arriving in the United States, leaving behind his businesses and facing an uncertain future.
Reflecting on his tumultuous journey, Zhao highlighted the inherent challenges faced by private entrepreneurs in China, where the powers at play often overlook individual rights and prioritize their own interests. Despite legal protections mentioned in policy documents, the reality on the ground paints a different picture, where businesses are at the mercy of unchecked authority.
Zhao’s story sheds light on the struggles and hardships faced by entrepreneurs in China, where personal success can quickly turn into a nightmare of persecution and loss. The systemic flaws within the Chinese legal system underscore the need for greater transparency and accountability to protect the rights and freedoms of individuals and businesses.
As Zhao grapples with his past and contemplates his future, his cautionary tale serves as a stark reminder of the challenges and obstacles that entrepreneurs face in a system where power and privilege often take precedence over justice and fairness.