• December 8, 2022

The Latest Target In China’s Crackdown On Entrepreneurs Is An Outspoken Billionaire : NPR

Billionaire Sun Dawu built an agricultural empire just outside Beijing. Now his conglomerate Dawu Group is spiraling out of control. Noel Celis / AFP via Getty Images Hide caption

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Noel Celis / AFP via Getty Images

Billionaire Sun Dawu built an agricultural empire just outside Beijing. Now his conglomerate Dawu Group is spiraling out of control.

Noel Celis / AFP via Getty Images

BAODING, HEBEI, CHINA – Billionaire Sun Dawu built an agricultural empire just outside Beijing. Space for around 9,000 He created an independent company town for employees and their families with free hospitals, schools and a sports stadium named after him.

Now his conglomerate, the Dawu Agricultural and Animal Husbandry Group, is spiraling out of control when he is brought to trial next week on politically motivated charges.

In late April, local authorities arrested Sun and 20 employees – many of them his own family members – after a minor property dispute turned violent. They have been in custody for half a year over a shared administrative problem for which Sun is now facing eight criminal charges, including illegal mining and “seeking and provoking trouble.” He denies them all.

Over the years, the 67-year-old tycoon farmer has defiantly befriended and supported Chinese political dissidents. Now he can become one himself.

Its business is temporarily in government hands.

A truck outside the Dawu Animal Feeding Daughter in Hebei Province. Emily Feng / NPR hide caption

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A truck outside the Dawu Animal Feeding Daughter in Hebei Province.

Emily Feng / NPR

“Everyone [Dawu] The subsidiary has a different local government team that has taken over the running, “an employee at the company’s main office outside Baoding City told NPR in November. The employee declined to be named because he was not allowed to speak publicly .

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Sun’s arrest and seizure of its stores are the latest in a string of raids against private companies. His case is being closely monitored in China’s commercial and legal circles to test the extent to which legal protection extends in trade disputes – in this case, land rights.

“The Dawu Group has not yet left the danger zone,” wrote Wu Danhong, a Beijing-based corporate attorney and legal commentator, on WeChat, the Chinese social media platform. “There is still a likelihood that Sun’s criminal charges will be escalated to” gang-like activities, “as only those charges allow the state to seize all of its property.” A three-year campaign to eradicate organized crime has already imprisoned tens of thousands of smaller entrepreneurs and their alleged political allies.

For the past four years, Beijing has prevented some of the country’s largest private corporations from being too powerful or from voicing their leaders about state policies. Since 2018 the authorities locked the managing director of a large insurance company, executed the former head of a powerful financial management company and forced several real estate conglomerates to do so sell suspicious foreign assets and pay off debts.

“Political power ultimately controls the economy,” says Cai Xia, a former professor at the country’s top Communist Party academy who is now in exile in the United States. “If Chinese entrepreneurs are to be successful, they have to rely on the system that the [Chinese Communist Party]. “

More recently, real estate tycoon and prominent government critic was Ren Zhiqiang Sentenced to 18 years’ imprisonment because of corruption in September. Financial regulators two months later canceled The highly anticipated public offering from financial technology firm Ant Group.

Authorities last month hit a record fine to the sister company of the Ant Group, the e-commerce juggernaut Alibaba. Three weeks later, the supervisory authorities too called in 13 Internet companies are calling for tighter financial management.

Sun, a self-designed agrarian utopian with a deep commitment to social justice, appears to be one of the newest targets. In 1984, he founded the Dawu Group from his hometown in rural Hebei Province, selling animal feed and fertilizers, and using the proceeds to fund his particular vision of rural development.

“It is difficult to redistribute the wealth of society uniformly. But it is possible to put citizens and aristocrats on an equal footing,” Sun wrote in a poem engraved on a stone slab near his company headquarters.

“It is difficult to redistribute the wealth of society uniformly. But it is possible to put citizens and aristocrats on an equal footing,” Sun wrote in a poem engraved on a stone slab near his company headquarters. Emily Feng / NPR hide caption

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Emily Feng / NPR

“It is difficult to redistribute the wealth of society uniformly. But it is possible to put citizens and aristocrats on an equal footing,” Sun wrote in a poem engraved on a stone slab near his company headquarters.

Emily Feng / NPR

Sun has quoted many times in Chinese media interviews Plato’s concept of the Philosopher King: a benevolent autocrat who leads a simple life and rules his subjects with kindness. He has often hosted prominent human rights lawyers and funded their legal costs when they came under political fire, including for Xu Zhiyong, a proponent of constitutional law reform, who did it arrested again last February after months on the run.

Beijing leaders have been seeing Sun for more than a decade for advice on how to increase rural incomes. Sun, who continued to work as a farmer while running a large company, advocated lower farm taxes and easier access to credit. He opposed mass urbanization and supported the efforts of grassroots farmers to improve their villages.

“The main problem in rural China is the restriction and deprivation of peasant labor through power and capital,” Sun said. said in a 2007 speech to students at the renowned Peking University.

Dawu Middle School, with the Sun Dawu quote, “Seek knowledge, seek what is real, seek the truth,” hiding above Emily Feng / NPR caption

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Dawu Middle School, with the Sun Dawu quote “Seek knowledge, seek what is real, seek the truth” on top

Emily Feng / NPR

As its business grew in the 2000s, Sun built its corporate city to reflect its political principles. There, employees enjoy subsidized or free access to amenities such as a theater, hot springs and a water park. Money is seldom exchanged; Employees and their families are given company cards that come pre-loaded with credit giving them access to free health care and schooling.

“You treat the workers here really well. If you work hard, you will be rewarded here. The profits will be reinvested in us,” said Pei Xinguang, a security officer at Dawu Elementary School.

As the Dawu Group expanded, Sun ran into legal problems due to China’s complex zoning laws that severely limit the purchase, sale, or use of rural land for commercial purposes.

“Some of the land-use processes were not carried out in a completely satisfactory manner,” admits Yang Bin, a defense lawyer for the Sun family. Such land use problems are relatively common in China and are usually resolved by administrative means or punished with fines.

A sign for the Dawu Hot Springs village under construction on a thoroughfare in Company City. Emily Feng / NPR hide caption

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A sign for the Dawu Hot Springs village under construction on a thoroughfare in Company City.

Emily Feng / NPR

Sun routinely sought legal advice from corporate and public interest law firms to compete with state-owned companies, including whether to sue the Department of Agriculture over bureaucratic disputes.

Sun asked “how privately owned companies could protect their rights, including land use rights, in disputes,” said Zhao Guang, a partner at Beijing law firm Youbang, who first met Sun almost two years ago at a conference convened by Sun. “Some of the concerns Sun raised at the time have now been met.”

Sun’s detention last November arose out of a disagreement over how much land the Dawu group and a nearby village had leased to a state farm. In August, Sun and about 30 employees allegedly assembled a mob to hold off the farm’s intrusion, leading to a state investigation and eventual arrest. Village authorities declined to comment when NPR was visiting in November as the case is still under litigation.

Sun is no stranger to trouble. In 2003, he was given a four-year suspended sentence for illegal fundraising after he and his staff raised nearly $ 2 million for business investments without approval from the central bank.

Now his generosity towards his employees can be interpreted by the authorities as a buying influence. Over the years, he has rallied frequently to defend himself against incriminating government regulators – what the prosecution might now refer to as organizing political disagreements.

“This is a simple administrative law case, but it has been politicized and distorted,” said Yang, his lawyer.

Chinese Justice Department officials have already called Yang, and two other senior public-interest lawyers that Sun has hired to defend him have warned them not to openly discuss the case – a sign of the political sensitivity associated with his charges.

Sun’s decade-old billion dollar empire is now in the hands of a local court. District judicial officers said it took them less than 10 days to sift through 348 pieces of evidence and legal arguments prepared by Sun’s defense team.

“I have a heavy heart now,” said Sun. wrote in a letter to his staff last month: “Next, we must … go through the legal process to fight for my family’s rights.”

Amy Cheng contributed research from Baoding, China.

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