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China’s Small and Medium-sized Private Enterprises Shrink Rapidly: Forcibly Demolished or Had to Establish a CCP Branch

At the end of 2021, the South China Morning Post reported that small businesses, the perennial backbone of China’s economy, are shrinking at a rapid pace. During the first 11 months, 4.37 million small businesses were written off, while only 1.32 million were registered. This is the first time in many years that the number of small business cancellations in China has exceeded the number of registrations.

On March 1, the National Bureau of Statistics of China released the PMI (Purchasing Managers’ Index) operation of February 2022.  In terms of enterprise size, the PMI for large and medium-sized enterprises was 51.8 percent and 51.4 percent respectively, up 0.2 percent and 0.9 percent compared to that of the previous month. However, the small enterprises PMI was 45.1 percent, down 0.9 percent  from last month. This was lower than the critical point. (a PMI below 50 indicates that the economy is in contraction.)

Mr. Li (a pseudonym), a small private enterprise boss from Taizhou, Zhejiang Province, has been uprooted from his hometown and displaced overseas for more than 2 years. He had 10 stores in Xiaoxie old industrial park at Lu’nan Street, Taizhou. In 2018, the Taizhou government demolished four to five hundred enterprises in the industrial park under the name of old city renovation and took away the related land.  The vast majority of those small enterprise owners were not given resettlement funds.

Mr. Li said, “The local government offered a very low price for compensation. That’s ridiculously low, just like a robbery! If you did not agree, the government could use tax, public security, fire, or environmental protection . . . from six or seven departments to deal with you.” Now the industrial parks have moved to remote places, like the new Binhai Industrial Park. He’s not able to afford even one store. “There is no way for the business to go on. Now some people still go to Beijing in order to petition, but the suppression is very serious,” Mr. Li started In1992. They were led to the Xiaoxie industrial park as private enterprises. It’s because the land has appreciated in value, an incrrease of probably dozens or up to a hundred times. The government wants to take the land back forcibly for commercial development and make a big profit. A similar event happened in the Shuanggang Industrial Park in Quzhou, Zhejiang Province. Those companies were auctioned off at low prices, and the owners ended up not having enough money to cover their debts. Some of them even committed suicide with hatred (in their hearts).

Mr. Li revealed, “When they get bigger, the enterprises are forced to establish CCP (Chinese Communist Party) branches ” (the CCP controls everything in China.). There are three purposes: one is to organize some CCP’s activities in two in three days. Its aim is for brainwashing; the second is for donating money easily when necessary; and the third is that the enterprise’s patents will belong equally to the state.

For example, one of  Mr. Li’s friends runs a large enterprise. A few years earlier the local CCP committee let him establish a party branch. He had been shirking it. Later, the CCP’s street office, the mayor and secretary of the town and the party union organizations came to him together. Mr. Li’s friend said that although he had a hundred employees, there were no CCP members in his factory. It’s not enough to set up a branch. (To set up a party branch needs three party members at least). Unexpectedly, they said — it’s okay. We will assign CCP members to you.

Mr. Li also mentioned that another friend’s enterprise produces high-end products directly required by the CCP for military use. It wants the technology. Some private enterprises also have a lot of things that the CCP does not have. So, the friend’s enterprise was acquired by the CCP with generous conditions and enough money. However, his freedom is gone, — two CCP persons were assigned to him plus two armed police officers to be his servants — driving his car and even opening the door for him.

Source: Epoch Times, March 9, 2022