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China

A Challenge To And From China's Entrepreneurs

What's on your mind?
What's on your mind?
Autumn Wind

BEIJING - In China, politics is something that worries and tangles up the minds of businessmen, perhaps more than others. Two recent events shed new light on what we can call the political anxiety of Chinese entrepreneurs.

The first incident came after the remarks of Liu Chuanzhi, the chairman of tech giant Lenovo, during a forum for Chinese entrepreneurs on Zhenghe Island. Liu stated that China's "economic trend is currently in a state of uncertainty" and that "the most important thing for Chinese entrepreneurs is to mentally focus and concentrate." Responding in an article, Huang Lilu, chairman of Zhenghe Island, then interpreted what Liu actually meant by "focusing" and "concentrating."

And what did he mean? That from now on businessmen should only talk about business. “In meetings henceforth we shall only discuss business, no politics. Under the current political and economical situation doing well in business is our duty.”

Liu's "reminder" resonates well among most of the entrepreneurs of this businessmen’s club.

However, one woman resolutely refused Liu's viewpoint. She is Wang Ying, the president of an investment corporation. She flatly declared, “I don't belong among those businessmen who don't talk about politics. Nor do I believe that Chinese entrepreneurs can survive just by kneeling down. So as not to involve this club, I hereby declare that I am officially withdrawing from it."

At the same moment, another act at the crossroads of business and politics was occurring in China. Zeng Chengjie, a Hunan businessman convicted of illegal fund-raising, was executed. According to Zeng's daughter, before putting him to death the court didn't even inform the family, nor was he allowed to see his family for a final time. This cruelty set off an uproar across China's Internet.

The online discussion included a post on the microblog of Wang Shi, the founder and Chairman of China Vanke, the country's largest real estate enterprise. “Reviewing the Chongqing incident: During the period of Bo Xilai as Secretary of Communist Party and the Red Culture Movement (in which he put forward a series of Mao-style campaigns to revive the Red Culture and crack down on crimes), a large number of Chongqing businessmen were forced into prison and their properties were confiscated. Their lives and dignity lost, no legal protection and even the lawyers who defended some of them were wrongfully jailed. At that time, I chose to stay silent. Reflection: that was cowardly, mistaken behavior. We should clearly say "NO" to those authoritative departments that violate the laws and infringe on people's lives and property."

Wang Wei and Ren Zhiqiang, two other famous Chinese entrepreneurs have given their support for Wang's declaration.

Chinese entrepreneurs are of two mindsets, both of which can be attributed to China's unfettered governmental power.

Since governmental power is not constrained, that power is everywhere. If a Chinese businessman wants to do business, and in particular, big business, he or she cannot avoid having connections with governmental officials to obtain their support, or at least their recognition. Of course, since economic construction is at the core of Chinese authority and local officials need to show good economic performance, they also need the businessmen's support. They are very willing to deal with business people and provide them with benefits preferential treatment. Nowhere else in the world is there a closer relationship between politicians and businessmen than in China.

Nevertheless, such close ties are not necessarily what Chinese entrepreneurs would prefer. Indeed, such relations often create serious anxiety for them. This is because such institutions based on guanxi - the good connection – are not rational.

The fact that Chinese politicians and businessmen can have such tight relations is precisely because China doesn't have a sound democracy and a complete rule of law to properly administer justice.

To any entrepreneur at all, such an institution is inherently uncertain. The probable result is that an entrepreneur could be put in jail just like those who experienced this during the rule of Bo Xilai in Chongqing. This was mentioned by Wang Shi. When power is abused, a once glorious Chinese entrepreneur can instantly become very fragile, as his property and person lose institutional protection.

Thus comes the dilemma for Chinese businessmen, how to avoid suffering such an experience?

There are two strategic choices for them. Liu Chuanzhi chose the first kind. In a recent interview with CCTV, he expressed in detail his attitude. "I can only obey the environment. I have never imagined that I can confront the environment or anything of the sort. Neither do I have the ambition, nor do I dare. If it is impossible to change the larger environment, one can make efforts to change the smaller one. Were it also impossible to change the small environment, one might as well adapt oneself to it and wait until the moment is ripe to change it. I am a reformist. If I count as a successful businessman today it's because I do not victimize myself in reform. If the reform is not to be, I keep myself out of danger."

Wang Ying is instead the one who opts for the second kind of choice, and she is supported by certain Chinese entrepreneurs such as Wang Shi. That is, through open conceptual efforts a civil society can strive to change unreasonable institutions.

The two strategies look seemingly opposed to each other. But, maybe they are actually complementary.

Entrepreneurs actively engaged in cultural undertakings to build a civil society merit great esteem. China needs such entrepreneurs today, and the more the better. It in fact doesn't imply confrontation. Even so, this choice requires greater courage, of which not every entrepreneur is capable. However, the ones failing to stand up should still show their respect to the others because the others' efforts are beneficial to the entire group of Chinese entrepreneurs and to the whole of society.

As to "businessmen should talk about business", even though it is seemingly passive, it can nonetheless contribute to institutional rationality. Of course businessmen are to talk about only business. In interpreting correctly "Businessmen are to make good business sense", this can play a positive role in transforming China's institution. If businessmen are really to stick to only business, they are to focus on business innovation and integrity. They should have self-restraint, and be clean themselves. They should not collude with authority, refuse to bribe governmental officials and adhere to businessman's ethics.

Were this the true practice of all Chinese businessmen, the current deformity of political-business relations would have ceased to exist. But if instead, a businessman on one hand declares to only talk about business, but on the other hand turns around and gets very close to the authority, this is a symptom of schizophrenia that can only harm the functioning of the nation.

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