Why China's Business Leaders Don't Sleep Well At Night

In Beijing's finance district
In Beijing's finance district
Xie Zuxi

BEIJING — The “Hierarchy of Needs," an influential psychological theory put forth by American psychologist Abraham Maslow, tells us that humans have different levels of needs. From the most basic physiological necessities such as water, food and sex, to love, belonging and self-actualization. It is notable that security comes in second on the hierarchy after the physical needs for human survival.

For Chinese entrepreneurs, who are typically taken care of materially and are pursuing social respect and self-fulfillment, their sense of security is the factor meant to allow them to sleep soundly at night. It means not having to think about emigrating from China, and feeling confident about China’s economy and the future for themselves and their businesses.

A recent nationwide survey by this newspaper found that when asked about their own security, 43% of Chinese entrepreneurs said they feel “very anxious,” while another 36% have “mild anxiety.” Those who feel “no anxiety” at all represent a mere 1.43%.

So what does it take to achieve a sense of security? It is a social mechanism in which the various relevant interested parties, including the government, businesses, institutions, and every individual in society, manage to reach a consensus for living together. Security relies on laws, trust and morals.

It has been more than three decades since the opening of China’s economy and society. Having gone through many tough trials and errors, political-business relations are still far from clarified. Not only are businesses administered by too many governmental departments, the authority’s hand directly interferes in economic practices, and far too often competes for profits with individuals.

While the path of continued economic development is clear, there exist many glass doors. By protecting the status of state-owned enterprises, certain officials are able to line their own pockets. There are also too many obsolete legal concepts with all kinds of administrative orders and various governmental authorities that don’t allow bona fide Chinese entrepreneurs to maximize their businesses. In particular, the essential component of private financing is filled with ambiguous legal regulations.

Secret executions

The fact that numerous entrepreneurs have been punished, one after the other, and several even secretly executed, such as Zeng Chengjie, who was accused of financial fraud, all contribute to a heightened sense of insecurity among Chinese business people.

So how can China help make its entrepreneurial class feel more secure? First it should clarify relations between government and enterprises, to define the authority’s referee position in a market economy. State-owned enterprises should give way to a modern corporate system so that a fair competitive market environment is created. Meanwhile, the state should be transformed to a service-oriented government that explicitly defines administrative boundaries.

In addition, China’s legal system and law enforcement must be improved as fast as possible. The improvement here doesn’t refer to the legal texts. China already has a vast body of regulations and bylaws. But when it comes time to turn to them as a reliable guide for current economic practice, they are either totally obsolete and hard to integrate or too vague to be implemented. Such a legal environment leads to too many grey zones and too much discretion on the part of individuals in the public domain.

The Third Plenary Session of the 18th Chinese Communist Party’s Central Committee is coming up next month. The dividends of China’s opening-up over the last two decades appear to have reached a peak. The Chinese economy is now slowing down and the economic structure ought to be upgraded. All of this urgently needs the consensus of the whole society.

The Chinese government has recently presented a document called “On local government function, transformation and institutional reforms.” A Free Trade Experimental Zone has been introduced in Shanghai. All these are positive signs that allow entrepreneurs to look forward to the upcoming plenary session. I believe their expectations include the desire for a sense of security.

Due to China’s particular conditions, some entrepreneurs have recently proclaimed that businessmen “shouldn’t discuss politics,” and this provoked others into calling on businessmen to speak out for themselves.

I believe neither side is wrong. Those advocating active participation in politics may be both believers in civic duty or those with good relations with officialdom. The others may be passive liberalists, or believers in business is business. Whatever side they belong to should not stand in the way of their spirit of entrepreneurship and fulfillment of their social duties. People can only truly feel safe, and pluralism achieved, if a society can count on the rule of law and establish a public sense of trust.

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Ecological Angst In India, A Mining Dumpsite As Neighbor

Local villagers in western India have been forced to live with a mining waste site on the edge of town. What happens when you wake up one day and the giant mound of industrial waste has imploded?

The mining dumpsite is situated just outside of the Badi village in the coastal state of Gujarat

Sukanya Shantha

BADI — Last week, when the men and women from the Bharwad community in this small village in western India stepped out for their daily work to herd livestock, they were greeted with a strange sight.

The 20-meter-high small hill that had formed at the open-cast mining dumpsite had suddenly sunk. Unsure of the reason behind the sudden caving-in, they immediately informed other villagers. In no time, word had traveled far, even drawing the attention of environment specialists and activists from outside town.

This mining dumpsite situated less than 500 meters outside of the Badi village in the coastal state of Gujarat has been a matter of serious concern ever since the Gujarat Power Corporation Limited began lignite mining work here in early 2017. The power plant is run by the Power Gujarat State Electricity Corporation Limited, which was previously known as the Bhavnagar Energy Company Ltd.

Vasudev Gohil, a 43-year-old resident of Badi village says that though the dumping site is technically situated outside the village, locals must pass the area on a daily basis.

"We are constantly on tenterhooks and looking for danger signs," he says. Indeed, their state of alert is how the sudden change in the shape of the dumpsite was noticed in the first place.

Can you trust environmental officials?

For someone visiting the place for the first time, the changes may not stand out. "But we have lived all our lives here, we know every little detail of this village. And when a 150-meter-long stretch cave-in by over 25-30 feet, the change can't be overlooked," Gohil adds.

This is not the first time that the dumpsite has worried local residents. Last November, a large part of the flattened part of the dumpsite had developed deep cracks and several flat areas had suddenly got elevated. While the officials had attributed this significant elevation to the high pressure of water in the upper strata of soil in the region, environment experts had pointed to seismic activities. The change is evident even today, nearly a year since it happened.

It could have sunk because of the rain.

After the recent incident, when the villagers raised an alarm and sent a written complaint to the regional Gujarat Pollution Control Board, an official visit to the site was arranged, along with the district administration and the mining department.

The regional pollution board officer Bhavnagar, A.G. Oza, insists the changes "aren't worrisome" and attributes it to the weather.

"The area received heavy rain this time. It is possible that the soil could have sunk in because of the rain," he tells The Wire. The Board, he says, along with the mining department, is now trying to assess if the caving-in had any impact on the ground surface.

"We visited the site as soon as a complaint was made. Samples have already been sent to the laboratory and we will have a clear idea only once the reports are made available," Oza adds.

Women from the Surkha village have to travel several kilometers to find potable water

Sukanya Shantha/The Wire

A questionnable claim

That the dumpsite had sunk in was noticeable for at least three days between October 1 and 3, but Rohit Prajapati of an environmental watchdog group Paryavaran Suraksha Samiti, noted that it was not the first time.

"This is the third time in four years that something so strange is happening. It is a disaster in the making and the authorities ought to examine the root cause of the problem," Prajapati says, adding that the department has repeatedly failed to properly address the issue.

He also contests the GPCB's claim that excess rain could lead to something so drastic. "Then why was similar impact not seen on other dumping sites in the region? One cannot arrive at conclusions for geological changes without a deeper study of them," he says. "It can have deadly implications."

Living in pollution

The villagers have also accused the GPCB of overlooking their complaint of water pollution which has rendered a large part of the land, most importantly, the gauchar or grazing land, useless.

"In the absence of a wall or a barrier, the pollutant has freely mixed with the water bodies here and has slowly started polluting both our soil and water," complains 23- year-old Nikul Kantharia.

He says ever since the mining project took off in the region, he, like most other villagers has been forced to take his livestock farther away to graze. "Nothing grows on the grazing land anymore and the grass closer to the dumpsite makes our cattle ill," Kantharia claims.

The mining work should have been stopped long ago

Prajapati and Bharat Jambucha, a well-known environmental activist and proponent of organic farming from the region, both point to blatant violations of environmental laws in the execution of mining work, with at least 12 violations cited by local officials. "But nothing happened after that. Mining work has continued without any hassles," Jambucha says. Among some glaring violations include the absence of a boundary wall around the dumping site and proper disposal of mining effluents.

The mining work has also continued without a most basic requirement – effluent treatment plant and sewage treatment plant at the mining site, Prajapati points out. "The mining work should have been stopped long ago. And the company should have been levied a heavy fine. But no such thing happened," he adds.

In some villages, the groundwater level has depleted over the past few years and villagers attribute it to the mining project. Women from Surkha village travel several kilometers outside for potable water. "This is new. Until five years ago, we had some water in the village and did not have to lug water every day," says Shilaben Kantharia.

The mine has affected the landscape around the villages

Sukanya Shantha/The Wire

Resisting lignite mining

The lignite mining project has a long history of resistance. Agricultural land, along with grazing land were acquired from the cluster of 12 adjoining villages in the coastal Ghogha taluka between 1994 and 1997. The locals estimate that villagers here lost anything between 40-100% of their land to the project. "We were paid a standard Rs 40,000 per bigha," Narendra, a local photographer, says.

The money, Narendra says, felt decent in 1994 but for those who had been dependent on this land, the years to come proved very challenging. "Several villagers have now taken a small patch of land in the neighboring villages on lease and are cultivating cotton and groundnut there," Narendra says.

They were dependent on others' land for work.

Bharat Jambucha says things get further complicated for the communities which were historically landless. "Most families belonging to the Dalit or other marginalized populations in the region never owned any land. They were dependent on others' land for work. Once villagers lost their land to the project, the landless were pushed out of the village," he adds. His organization, Prakrutik Kheti Juth, has been at the forefront, fighting for the rights of the villages affected in the lignite mining project.

In 2017, when the mining project finally took off, villagers from across 12 villages protested. The demonstration was disrupted after police used force and beat many protesters. More than 350 of them were booked for rioting.

The villagers, however, did not give up. Protests and hunger strikes have continued from time to time. A few villagers even sent a letter to the President of India threatening that they would commit suicide if the government did not return their land.

"We let them have our land for over 20 years," says Gohil.

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