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A Chinese entrepreneur who says what others only think

China’s entrepreneurial class is grappling with the worst economic crisis in decades as the government’s zero Covid policy has closed cities and kept potential customers at home. Yet they don’t seem to agree on how strongly they should complain – or even if they should at all.

A tech entrepreneur wrote in a large group chat in May that many members were overly critical. “What people here do every day is criticize the government and the system,” she wrote. “I don’t see any entrepreneurial spirit there.”

A leading venture capitalist has told his nearly nine million social media followers that while everyone has suffered from the pandemic, they should try to stay away from negative news and information.

Their approach, the equivalent of an ostrich sticking its head in the sand, makes no sense to Zhou Hang. Mr. Zhou, a tech entrepreneur and venture capitalist, wondered how his peers could claim business was business as usual, given the political and economic upheaval. Stop putting up with ridiculous reality, he urged. It is time to speak up and seek change.

Mr Zhou is rare in the Chinese business world for having openly criticized the government’s zero Covid policy, which has put hundreds of millions of people under some sort of lockdown in recent months, costing jobs and lives. income. He says what many others whisper in private but fear to say in public.

“The questions we should be asking are,” he wrote in a post that was censored less than an hour after it was published but widely shared in other formats, “what caused such widespread negative sentiment in society? Who should be responsible for this? And how can we change it?

He said the shutdowns in Shanghai and other cities made it clear that wealth and social status meant little to a government determined to pursue its zero Covid policy. “We are all just suckers who could be sent to quarantine camps, and our homes could be broken into,” he wrote. “If we still choose to adapt and endure this, we will all face the same fate: trapped.”

For Mr. Zhou, staying out of politics is no longer an option for Chinese business leaders. But some of his peers are reluctant, given the potential penalties.

The Chinese Communist Party has always been wary of the influence of the business class, even as it has tried to co-opt its members to help boost the country’s economy. Under China’s current supreme leader, Xi Jinping, party attitudes towards the private sector have taken a more hostile turn and have made the entrepreneurial class the bogeyman of social ills.

In recent years, the government has moved away from the market economy and has cracked down on certain industries. He demonized entrepreneurs and attacked some of the most important among them. Then, when the mild, albeit contagious, Omicron variant of the coronavirus emerged in China this year, the government meddled in free enterprise in a way it hadn’t in decades.

The shutdowns and restrictions have hurt the economy so badly that Premier Li Keqiang called about 100,000 executives to an emergency meeting in late May. He described the situation as “serious” and “urgent”, citing sharp declines in employment, industrial production, electricity consumption and freight traffic.

Many business leaders believe it will be difficult to reverse the damage if the government does not stop the zero Covid policy. Yet they believe there is nothing they can do to change Beijing’s course.

The president of a major internet company told me that with all the restrictions related to the pandemic, he and others operated as if they were dancing with chains while expecting the sword of a lock strikes at any time. With a large public company to run, he said, it would be too risky to be heard. He hoped economists could be more outspoken.

The chairman of a publicly traded conglomerate with many consumer-facing businesses said he had to shut down a few of his businesses and let people go as revenues fell off a cliff. He is not a Christian, he said, but he prayed to God every day to help him through this difficult time.

There are good reasons to be afraid to speak. Mr. Zhou’s post was censored, along with a few others, by entrepreneurs who argued for a more balanced approach between pandemic control and economic activities. James Liang, president of travel site Trip.com and an economist by training, wrote a few articles comparing the pros and cons of different pandemic policies. Then, in mid-May, his Weibo social media account was suspended.

The stakes could be much higher than a few censored articles and suspended social media accounts.

Jack Ma, the founder of e-commerce giant Alibaba, largely disappeared from public view after criticizing banking regulators in late 2019. Regulators canceled the initial public offering by Ant Group, the technology and financial company controlled by Mr. Ma, and Alibaba levied a record $2.8 billion fine last year.

Ren Zhiqiang, a retired property developer, was sentenced to 18 years in prison for bribery, bribery, embezzlement of public funds and abuse of power. His real crime, according to his supporters, was to criticize Mr. Xi’s handling of the coronavirus outbreak in early 2020.

Mr. Zhou, 49, is known as a maverick in Chinese business circles. He founded his first stereo system company with his brother in the mid-1990s while still in college. In 2010, he launched Yongche, one of the first ridesharing companies.

Unlike most Chinese bosses, he didn’t require his employees to work overtime, and he didn’t like booze-laden business lunches. He turned down hundreds of millions of dollars in funding and refused to participate in grant wars because it made no economic sense. He ended up losing to his more aggressive competitor Didi.

Later he wrote a bestseller about his failure and became a partner in a venture capital firm in Beijing. In April, he was named chairman of carpooling company Caocao, a subsidiary of car manufacturing giant Geely Auto Group.

A Chinese citizen with his family in Canada, Zhou said in an interview that in the past, many wealthy Chinese like him moved their families and some of their assets overseas, but worked in China because there was more opportunities.

Now some of the top talent is also trying to move their businesses out of the country. This does not bode well for China’s future, he said.

“Entrepreneurs have good survival instincts,” he said. “Now they are forced to look beyond China.” He coined a term – “passive globalization” – based on his discussions with other entrepreneurs. “Many of us are starting to take such steps,” he said.

The prospect depressed him. China was once the best market in the world: big, vibrant, full of ambitious entrepreneurs and hungry workers, he said, but the senseless and destructive zero Covid policy and corporate crackdowns have forced many them to think twice.

“Even if your company is a so-called giant, we are all suckers in the face of the greatest force,” he said. “A gust of wind could crush us.”

Every business leader I spoke to said they were reluctant to invest long-term in China and feared they and their businesses would become the next victim of the government’s iron fist. They focus on their international operations if they have any or look for overseas opportunities.

Mr. Zhou rushed off to Vancouver, British Columbia, in late April as Beijing locked down many neighborhoods. Then he wrote the article, urging his peers to try to speak out and change their helpless status.

He said he understood the fear and pressure they faced. “Honestly speaking, I’m scared too.” But he’d probably regret it more if he didn’t. “Our country cannot go on like this,” he said. “We can’t let it deteriorate like this.”

In recent years, a few posts and social media accounts of Mr. Zhou have been deleted. His outspokenness caused unease among his friends, he said. Some told him to shut up because it didn’t change anything and created unnecessary risks for himself, his family, his businesses and his business stakeholders.

But Mr. Zhou can’t help it. He fears that China will no longer become as it was under Mao: impoverished and repressive. Its generation of entrepreneurs owes much of its success to China’s reform and opening-up policies, he said. They have a responsibility to initiate change instead of waiting for a free ride.

Maybe they can start by expressing themselves, if only a little.

“All change starts with disagreement and disobedience,” he said.

#Chinese #entrepreneur

Post expires at 4:44am on Wednesday June 22nd, 2022

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