Beast Press: According to VOA reports, Chinese farmer entrepreneur Sun Dawu was taken away by the police in the early hours of November 11, 2020. He was charged with crimes such as "picking quarrels and provoking trouble" and "destroying production and operation".

Sun Dawu is the founder of Hebei Dawu Agriculture and Animal Husbandry Group Company. He served as the chairman of Dawu Group until he quit in 2005 and became the chairman of the board of supervisors.

Dawu Group is one of the top 500 private enterprises in China, with more than 9,000 employees, 2 billion yuan in fixed assets, and an annual output value of more than 3 billion yuan.

Witnesses said the police acted at midnight. Sun Dawu's wife, eldest son and group chairman Sun Meng were also detained, and about a dozen people from the company were taken away by the police.

Witnesses said that the company was surrounded by police, and the local government took over Dawu Group in an all-round way, requiring all branches and service outlets except the financial department to operate as usual.

An anonymous employee said that there were about a few hundred police officers involved in the arrest (there are also reports that there were more than 300 police officers), and many people were arrested, about a dozen.

As for the reason for Sun Dawu's arrest this time, the Chinese domestic media are unclear. The Paper only reported that the public security organs took "criminal coercive measures" against Sun Dawu and others in accordance with the law, and the case is currently under investigation.

There are reports that in August this year, employees of the Dawu Group clashed with the police in order to prevent a state-owned farm from forcibly demolishing the Dawu company's house, and more than 20 people were injured. Dawu Group held a staff meeting to publicly protest the crackdown by local authorities.

Previously, Sun Dawu had several records of being involved in legal proceedings. Two of these incidents stand out. One was in April 2003, when Dawu Group published three articles on its website: "Building a Well-off Society and Difficulties", "Mourning Li Shenzhi", and "A Dialogue Between Two Folk Businessmen on China's Current Situation and History" The article was warned by the police.

Police said the articles "seriously damaged the image of state organs" and ordered the website to be rectified, suspended for six months and fined 15,000 yuan.

Another incident occurred in May of that year. Sun Dawu was arrested for raising more than 180 million yuan. His two younger brothers, Sun Zhihua, vice chairman of Dawu Group, and Sun Dehua, general manager, were detained by the police. The local court later sentenced Sun Dawu to 3 years in prison, suspended for 4 years, and a fine of 100,000 yuan for illegally absorbing public deposits. Dawu Group was also sentenced to a fine of 300,000 yuan.

This fundraising event aroused widespread concern and discussion in the country at that time. Many people believe that although Dawu Group has created a lot of wealth and employment for the society, it is excluded from the financial system and cannot obtain bank loans. Sun Dawu's lawyer said that it may be because of the support of public opinion that the court imposed a lighter punishment on Sun Dawu and his company.

Since then, the Associated Press said that Sun Dawu praised Xu Zhiyong, a human rights lawyer who helped him. His approach may have aroused the displeasure of those in power. Xu Zhiyong and some activists were later arrested by the authorities for "inciting and subverting state power."

Sun Dawu also praised the lawyers on his social media account in May this year, saying that they had allowed victims to see a light, maintained a little confidence in the law, and lit up their hope of survival.

The Paper said that Sun Dawu's last public appearance was at the training meeting for the backbone of the Dawu Group's cadres held on October 30.

Ding Dong Xiaoqun | Ding Xing: Sun Dawu I know

I met Sun Dawu in 2003. That spring, when Li Shenzhi passed away, I compiled a collection of essays "In Memory of Li Shenzhi" with a few friends. Sun Dawu also wrote an essay about his memory and sent me 1,000 yuan to support the printing of the anthology. Unexpectedly, before the anthology was printed, Sun Dawu went to lose his freedom. At that time, Du Runsheng and other seniors were very concerned about Sun Dawu's fate and appealed for him. A few months later, Sun Dawu finally survived and returned to the world, and his business was also saved. Soon, I gave him 50 sets of "In Memory of Li Shenzhi" that I had saved for him, and I got to know him.

In the next 17 years, I had many exchanges with Sun Dawu. He came to Beijing several times to participate in "Yanhuang Chunqiu" activities, and we all met. He also visited Mr. Zong Fengming with me. I have also been invited to Dawu Manor several times to participate in academic seminars. I feel that he does have his own characteristics among peasant entrepreneurs. First, love to read, like to think about problems, like to communicate with intellectuals, is an idealist. The second is to be enthusiastic about public welfare. The schools and hospitals he runs are not for profit, but to do good deeds for the society. The third is to run a business not to enrich oneself, but to enrich everyone and one party. Fourth, reject unspoken rules and do not engage in political and business blending. There are not too many such peasant entrepreneurs in China, but too few. Of course, I am also worried about him, whether such a character and temper can survive for a long time in the current environment.

I wrote an article arguing that Sun Zhigang, Sun Dawu, and Sun Zhongjie are the three mirrors of the rights of Chinese citizens. The death of Sun Zhigang, a college student, ended the detention system. When Sun Zhongjie was 18 years old, he went to Shanghai to work and drive for a company. On the way, someone said that he couldn't get a taxi and asked for a ride. He relented and agreed, but he didn't expect that the person who came up was a "hook". Law enforcement agencies abuse public power, frame good people, harm public morality, and bully him to the point where they can't bear it. He would rather lose his finger than seek his innocence. He inadvertently became the focus of Chinese public opinion. Whether he can get his innocence back is not a purely personal matter. All kinds of media, including mainstream media, got involved and supported him. In the end, in a dramatic change, the government admitted that law enforcement was wrong. Fishing law enforcement has since become a street rat. Sun Zhongjie recovered his innocence.

Of the three, I only know Sun Dawu. On the Beijing-Hong Kong-Macao Expressway, every time I see the advertisement of Dawu Company, I think of him. I hope he and his business can weather the storm and continue to grow.

Sun Dawu (June 1954-) , a native of Langwuzhuang Village, Gaolin Village Town, Xushui County, Hebei Province, is the chairman of Hebei Dawu Agriculture and Animal Husbandry Group Co., Ltd.

After graduating from junior high school, Sun Dawu worked for the 82nd Division of the 28th Army in Linfen, Shanxi Province and the Agricultural Bank of Xushui County. These two experiences made him realize that agriculture and animal husbandry can be developed and operated. In 1985, he founded Dawu Agriculture and Animal Husbandry Group Co., Ltd. and served as chairman of the board. He started with a thousand chickens and fifty pigs. During his tenure as chairman, Sun Dawu was awarded the honor of the champion of chicken raising in Hebei Province in June 1996.

In 1995, Dawu Group has become one of the top 500 private enterprises in China, and Sun Dawu was also elected as the representative of Baoding Municipal People's Congress. In August 1996, he was elected chairman of Baoding Poultry and Egg Industry Federation. In 2001, in addition to the chairman of Dawu Group, Sun Dawu also served as the principal of Dawu School; in October 2002, he was hired as a senior researcher by the Institute of Farmer Issues of China Agricultural University. In 2005, Sun Dawu was appointed as the chairman of the board of supervisors of Dawu Group.

multiple convictions

On April 31, 2003, the Xushui County Public Security Bureau notified the Dawu website: "Building a Well-off Society and Difficulties", "Mourning Li Shenzhi", and "A Dialogue Between Two Folk Businessmen on China's Current Situation and History" published on the website. The article seriously damaged the image of state organs, rectified the website, suspended business for 6 months, and fined 15,000 yuan.

On May 29, 2003, he was arrested for borrowing more than 180 million yuan from more than 3,000 farmers. He was detained on the charge of illegal fundraising and charged with illegal possession of ammunition; two younger brothers. Sun Zhihua, vice chairman of Dawu Group, Sun Dehua, general manager, and the group's financial director were also detained. In the end, the Xushui County Court sentenced him to three years in prison, four years of probation, and a fine of 100,000 yuan for illegally absorbing public deposits. Dawu Group was also sentenced to a fine of 300,000 yuan.

In August 2020, a state-owned farm attempted to forcibly demolish a house owned by the Dawu Group, resulting in clashes between Dawu Group employees and the police, injuring more than 20 people. The Dawu Group immediately protested to the local authorities. In addition, Sun Dawu has repeatedly praised the human rights lawyer Xu Zhiyong and others who helped him. On November 11, 2020, Sun Dawu was arrested by the Hebei Provincial Police on suspicion of picking quarrels and provoking trouble and sabotaging production and operation.

[Review of Old Articles] Sheng Hong: How to convince private entrepreneurs to trust the government?

Sheng Hongjian: From the end of 2018 to the present, we have been listening to the declaration of "protecting private entrepreneurs", but the incidents of private entrepreneurs being violated occurred repeatedly until the Dawu incident finally reached a peak. If a government claims to protect people's safety and property rights without catching robbers, "protection" is empty talk. If the local administrative departments that violate the constitution and violate the laws and regulations of private enterprises do not take thunderous measures, the document "protecting private entrepreneurs" will be a blank slate. Repost articles from 2018.

From September 12 when Wu Xiaoping published an article on the "disengagement of the private economy" to Mr. Xi Jinping's speech on November 1, some media called it "the thrilling 50 days of the private economy". This is probably not an exaggeration, but it cannot be called normal. Why is it that an ordinary commenter, with no official background, can cause such a big wave, and the general secretary of the Communist Party of China has to go out in person to calm it down? The People's Daily published an article shortly after, saying the move "reassured private entrepreneurs." Unexpectedly, it attracted ridicule on the Internet. Some people say that the efficacy of reassurance pills does not last long, and some people say that it is "word therapy". Others took out the People's Daily, which has been published for decades, claiming that the "reassurance pill" has been eaten for decades. Some scholars have commented that the statement of "one's own person" makes entrepreneurs uneasy, because only an equal contractual relationship can be established between one's own and non-self's people, and there is no need to follow the rules for "one's own person". And so on. Why is this?

Confucius said, "Beginning with people, I listened to their words and believed their actions; now I am with people, listen to their words and observe their actions." This may also be a portrayal of the private entrepreneurs' understanding of government policies. In fact, the principles of "protecting private property" and "protecting the non-public economy" have long been written into the Constitution, and the resolutions of successive CPC congresses in recent years have also emphasized "unwaveringly encourage, support, and guide the development of the non-public economy. "Just from the last ten years, we have become accustomed to the various policies, documents and speeches of the government to appease and support private enterprises. For example, during the Hu-Wen period, the government issued the very famous old and new "36 Non-public Regulations", that is, "Several Opinions of the State Council on Encouraging and Supporting the Development of Non-public Economy". The "Old Non-public 36 Articles" were promulgated in 2005, among which were "improving the private property protection system", "implementing the principles of equal access and fair treatment", and "increasing fiscal, tax and credit support". This is not much different in principle from Mr. Xi Jinping's speech this time.

However, in 2004, not long before the release of the "Old Non-public 36 Articles", there were two famous cases of infringement and crackdown on the property rights of private enterprises. One is the Tieben case. In this case, Tieben Company was accused of illegal investment and land acquisition. Chairman Dai Guofang was arrested and later prosecuted for "falsely deducting tax invoices" and sentenced to 5 years in prison. In fact, the investment of a private enterprise should be based on its economic freedom, and no one needs to approve it; while the land acquisition is approved by the local government, if there is any mistake, it is also the fault of the relevant government departments. Another case is the Shaanbei Oilfield case. In 2003, the local government of northern Shaanxi suddenly forcibly "nationalized" the assets of thousands of oil wells originally operated by private enterprises, and only paid "compensation" equivalent to 20% of the investment. In the face of investor protests, the local government abused its coercive public power to falsely accuse the investors of "picking quarrels and provoking trouble" and put some of them in jail. The investors' lawyers were also detained on charges of "unlawful disturbance of social order". It's pretty much a snatch in broad daylight.

These two incidents were both cases of direct infringement of the property rights of private enterprises, and both occurred before and after the "Old Non-public 36 Articles". If the "improvement of the private property protection system" can really be implemented, even if such a case has already occurred, it will be corrected in the subsequent processing. Although the prosecution against Tieben Chairman Dai Guofang had nothing to do with the project itself, the project was dismantled because of this. infringe. Investors in the North Shaanxi Oilfield also lost their money and returned home. Likewise, their losses are not only due to the government's failure to protect property rights, but also from the government's mandatory repossession. Not to mention "implementing the principle of equal access and fair treatment", both cases have blatant ownership discrimination. Just when Tieben dismounted, Baosteel, Wuhan Iron and Steel and other state-owned steel companies announced new large-scale investment ; And the reason for "recovering" the Shaanbei Oilfield is to "return to the state". In fact, it is not the "old non-public 36 articles", but these two cases have given private entrepreneurs the truest and strongest information.

A few years later, in 2010, the State Council promulgated the "36 New Non-public Regulations", focusing on refining market access, such as encouraging private enterprises to enter basic industries such as telecommunications, electricity, oil, and transportation, and enter Municipal utilities such as water supply, gas supply, heat supply and waste disposal, enter the field of social undertakings such as medical care and education. However, at the same time that the "36 new non-public laws" were promulgated, the Keqilai case in Shaanxi Province was inextricably linked. This is an area covered by the "New Non-public 36 Articles" to encourage private enterprises to enter. The main cause of this case is that the state-owned party of the contract, the Western Survey Institute, tore up the contract signed with Kaiqilai Co. It is said that the real reason is that the Western Exploration Institute has discovered coal reserves worth hundreds of billions of dollars during exploration. As recently as 2011, the Shaanxi Provincial High Court re-examined the Kaiqilai case and declared its contract with the Xikan Institute to be invalid; Kaiqilai Company was cancelled by the Industrial and Commercial Bureau; its legal representative Zhao Faqi was arrested and imprisoned.

Another major case is the Zeng Chengjie case. Zeng Chengjie and his Hunan Third Pavilion Real Estate Company signed a contract with the local government to undertake the investment and construction of three local public venues, and under the encouragement of the government, they raised funds publicly. However, when financial policy changes and financial crises occurred, the local government and its officials took the lead in withdrawing, and put the responsibility for breach of contract on the entrepreneurs. When Zeng Chengjie's company was able to repay and was willing to repay, he was sentenced to death and sold his company to a state-owned enterprise at a low price. At this time, Zeng Chengjie not only failed to keep his property rights, but also lost his life, let alone "market entry". At this time, there is no need to argue which information is more true, "36 new non-public articles" or Zeng Chengjie's death sentence. In fact, around 2010, there was a more significant event, the "Chongqing crackdown". The so-called "underworld" here are mainly private enterprises, and a total of 13 people were executed. After the fall of Bo Xilai, there was no retrial or screening of this major case. Li Zhuang also pointed out that during this campaign, the Chongqing Public Security Bureau confiscated about 100 billion yuan in assets, while only about 930 million yuan entered the state treasury.

In 2016, the Central Committee of the Communist Party of China and the State Council issued the "Opinions on Improving the Property Rights Protection System and Protecting Property Rights by Law", which raised the "protection of property rights" to a new height, and proposed "equal protection", "comprehensive protection" and "lawful protection". and the five principles of "joint participation". The intentions are not unreasonable, and the words are not untrue. Among them, there is a section on "Improving the Mechanism for the Government to Keep its Promises and Fulfill Its Promise", which emphasizes that "in cases where the property rights of enterprises and citizens are damaged due to the government's breach of contract, etc., the compensation, complaint and relief mechanism should be further improved, and the complaint and relief channels should be unblocked." However, in this After the release of the document, the violation of the property rights of private enterprises has become more and more severe and common. For example, private enterprises are generally required to establish CCP branches. By the end of 2016, 68% of non-state-owned enterprises had established party organizations. This will not only increase the cost, but also use the principles of political organization to interfere with the decision-making of the corporate governance structure, resulting in the insecurity of private property rights. In the government actions to drive out non-residents and demolish rooftop advertisements in Beijing at the end of 2017, neither advance notice nor compensation for loss of assets was given. The injured people and private enterprises could not find the so-called "relief channel" at all. , making the above-mentioned documents of the Central Committee of the Communist Party of China like waste paper.

In his speech during the discussion with private entrepreneurs this time, Mr. Xi Jinping also emphasized the need to "protect the personal and property safety of entrepreneurs", and "in market access, approval and licensing, business operation, bidding, military-civilian integration, etc., for private enterprises. Create a level playing field and create sufficient market space for the development of private enterprises", and also promised to "intensify tax reductions." However, almost at the same time, we saw "the eight buildings built by the ecological pension center in Dawu Kangyang Town. The residential building was confiscated by the Xushui District Land and Resources Bureau on the grounds that it was built without approval.” Beijing Tianze Consulting Co., Ltd. was revoked its license by the Haidian Industry and Commerce Bureau on the grounds that it engaged in an “education and training” project that should have applied for a license but did not apply for it. . The former incident directly violated the property safety of private enterprises, while the latter incident is strengthening restrictions on market access and expanding the scope of examination and approval, directly countering Mr. Xi Jinping's speech.

The documents and speeches produced by government policymakers seem to be in stark contrast to what we feel. Is this because they are not sincere and sincere? it's not true. In fact, government policymakers are very clear that private enterprises are the main pillar of my country's economy and the main source of wealth flow. As Mr. Xi Jinping said, the private economy "contributes more than 50% of tax revenue, more than 60% of GDP, more than 70% of technological innovation, more than 80% of urban labor employment, and more than 90% of the number of enterprises." In terms of increments, private enterprises contributed more than 90% of new GDP and more than 100% of new jobs (that is, they also filled the jobs lost by state-owned enterprises). They also know that private enterprises are far more efficient and innovative than state-owned enterprises, and the development of state-owned enterprises mainly depends on the development of private enterprises. Because most state-owned enterprises are now concentrated in upstream basic industries, such as finance, telecommunications, electric power, railway, oil and other industries, only when downstream enterprises develop, they can get their own share from the income of downstream enterprises, and they are monopolized share.

However, on the other hand, government decision makers are the direct beneficiaries of the tax burden increase, while the state-owned enterprise executive group and the administrative department official group are actually one group, and the positions of the two groups on the career ladder are interchangeable Therefore, they will not make great efforts in restricting and supervising fiscal expenditure, nor are they willing to "break" the monopoly of state-owned enterprises, or even strengthen the restraint on the abuse of public power. For a long time, these practices did not directly produce significant negative results, because at the beginning of the reform, because the government's frame of reference was the planned economy period, not only the people were poor, but the government was also poor, so the tax rate at that time was also very high. Low. However, with the development of the market economy and the influx of wealth, the government has not been effectively constrained, so it is constantly raising the macro tax rate, and is also using administrative power to establish monopoly power, and officials who use public power to infringe private enterprise assets are also relatively indulgence. This is why, on the premise of knowing the importance of private enterprises, it is necessary to invade private enterprises from time to time.

For a long time, protecting property rights and not restricting public rights seemed to go hand in hand. This is because the tax rate is raised little by little, and the starting point is very low. In the process of raising, although private enterprises feel that the profit rate is decreasing, there is still a distance from the critical point, so it does not pose a big problem. . The use of public power to seize private property was relatively sporadic at first, and people tended to think it was an accidental event. But when the tax rate is raised to a very high level, some private companies that are not well run are the first to feel the pressure, and they will complain that the tax burden is too heavy. The use of public power to infringe on private property, because it is not subject to the constraints and punishments of the system, is being imitated by more and more people. It also formed the general understanding that private entrepreneurs felt that the tax burden was too heavy and property rights could not be protected. For policymakers, there is also an initial conflict between the principles of protecting property rights and not binding public rights.

Finally, when private entrepreneurs are not confident enough to continue investing, or even move overseas, the accumulated results will affect the macroeconomic state. For example, in the first half of 2016, the growth rate of my country's private capital investment decreased month by month, and it was only 2.1% in July, and macro policy makers felt the seriousness of the problem. It must be said that in 2016 the Central Committee of the Communist Party of China and the State Council issued the "Opinions on Improving the Property Rights Protection System to Protect Property Rights in Law", to a large extent, to deal with this important issue at that time. This time Mr. Xi Jinping's speech on November 1 is also related to the current severe economic situation. That is, private enterprises have suffered large-scale financial losses, that is, the return on equity has been lower than the sum of the risk-free interest rate and a reasonable risk premium; the economy has declined significantly; at the same time, there is pressure from the trade war. Therefore, the two moves by the central government to private enterprises are of a "short-term utilitarian" nature, that is, they are just to solve the current problem. basic principles presented in. This has happened many times. As mentioned above, private entrepreneurs can only regard these "opinions" or speeches as cramming in a hurry.

In 2016, the National Development and Reform Commission invited experts to discuss the "Opinions on Improving the Property Rights Protection System to Protect Property Rights According to Law". Some experts and I emphasized that many documents are not as good as one case. Since then, the central government has pushed for retrials in some unjust cases. The more famous ones are the Keqilai case, in which the Supreme Court finally won the case against Keqilai Company; the Wu Ying case was retrial and the sentence was commuted; the Zhao Shoushuai case was retrial and acquitted; Recently, Mr. Liu He emphasized that "one action is better than a dozen programs". On November 12, the Supreme Court issued the "Notice on Creating a Good Legal Environment for Entrepreneurs' Innovation and Entrepreneurship" (Fa [2018] No. 1), emphasizing that the spirit of the above-mentioned documents or speeches should be implemented into judicial practice. This is obviously a relatively large move, intended to make people listen to what they say and watch what they do. Although it still has a short-term utilitarian nature, it has already stood at the door of an institutionalized change. On the one hand, this kind of action still retains a sports style, and it is still in line with the current policy. People have reason to think that it is just a show; but on the other hand, once implemented in the judicial system, these cases may serve as an example. role, opening up a new lasting and effective system.

However, in any case, this is not enough, not enough to reassure private entrepreneurs. What is more important is not to rehabilitate several unjust cases, but to have a system to ensure that no new unjust cases will occur. The title of the above-mentioned Supreme Court Notice is like a special case for some people, rather than a normal system that is accurately described by the written constitution and laws, applicable to all, and implemented by the judiciary in accordance with legal due process. The so-called "rehabilitation of wrongful cases" is inherently paradoxical. If it is known to be an "unjust case" before the retrial, it will be regarded as deliberately fabricated before then; if the "unjust case" is described from a probabilistic point of view, it is to admit that the existing judicial system is problematic, and the problem That is, it does not follow legal due process. As an administrative goal, "rehabilitation" is more likely to further disregard fair judicial procedures, and the same method can also recreate unjust cases. What can really stabilize people's hearts is the stable expectations for the system. When a person firmly believes that he can pass a legal due process in accordance with the constitution and legal texts, resist the intervention of the executive branch of the government, and obtain a roughly predictable result, his heart will be stable.

So, what is the system involving the stable expectations of private entrepreneurs? It is a system that can restrain and balance public power from being abused. The words "protecting property rights" are not automatically implemented once they are spoken. In fact, they must be guaranteed by a set of institutional structures and implemented by a series of institutional operations. This includes complaints, warnings, petitions, lawsuits, awards, enforcement and restraint. Briefly, (1) people have the right to complain or express their opinions, that is, the rights stipulated in Article 35 of the Constitution are guaranteed; (2) the system of restraining the executive branch of the government; that is, the mistakes of improper government intervention can be corrected, Wrong parties are punished; (3) an independent judicial system in which people are not excluded from the courts due to party and government interference, one can expect people within this judicial system to be committed to making cases fair; etc. .

First, if there is no right to complain and express opinions, people will not even know whether the rights of entrepreneurs have been violated. So it is the primary right. In contrast, over the years, the right of entrepreneurs to complain has actually been suppressed. Many cases of infringement of property rights and even harm to life have not received public expression. For example, Zeng Chengjie was sentenced to death in 2013, and was not executed until 2015, but during this period, no relevant public opinion was heard. According to the assistant of Wang Shaoguang, Zeng Chengjie's lawyer, in more than a year, she "run almost all websites, newspapers, and magazines, and all she received were 'the pressure of negative reports is too great', 'there are leaders who do not allow it to be published' and so on. "In contrast, Wu Ying's case appealed to public opinion from the very beginning, and the Tianze Institute also held a discussion meeting specifically for Wu Ying's case. As a result, Wu Ying's death sentence was changed to life. After Zeng Chengjie was killed, our special seminar on the Zeng Chengjie case was severely disrupted. Thus, if there is no guarantee that Article 35 of the Constitution will be implemented, there will be no first "institutional signal" to reassure entrepreneurs.

In addition to the above two conferences, Tianze Institute also held a number of conferences on entrepreneurial cases. Such as the Sun Dawu case, the Keqilai case and so on. It should be said that Tianze Institute is one of the few non-governmental organizations in my country that speaks for private enterprises. Tianze has set up the China Entrepreneur Research Center. In recent years, it has released the "Report on the Survival and Development Environment of Private Enterprises" every year, and held seminars on the survival and development of private enterprises. At the end of 2016, we released the "Research Report on Tax Burden and Tax Reform of Private Enterprises in China". This is based on a discussion with more than 100 entrepreneurs in four provinces and cities, and a research conducted on valid questionnaires from 113 companies. The report pointed out that the tax burden of Chinese private enterprises is too heavy, almost to the level of "death tax rate". But that voice soon called for suppression. More seriously, at almost the same time as Mr. Xi was speaking, Beijing Tianze Consulting Co., Ltd. was revoked its license with extremely ridiculous accusations. This is a private enterprise that speaks for private enterprises. Whether it exists or not is a "signal institutional signal". If it cannot survive, will other reassurances about "own people" still be effective?

The second "institutional signal" is the effective restraint on government administrative departments. One of the simplest and most important constraints is that the executive branch of government abides by the Constitution and laws. Article 11 of the "Constitution" stipulates that "the state protects the legitimate rights of the individual economy, private economy and other non-public economies". The executive branch is only a public sector established under the framework of the Constitution, and should only serve the secondary and derived powers of constitutional rights (including non-public property rights). Therefore, an important principle that government administrative departments should follow is that property rights are higher than administrative powers. When I saw a Xushui District Land and Resources Bureau actually thought that it had the power to confiscate the assets of a private enterprise, I knew that it had no understanding of the constitution and no reverence for property rights. Of course, this is not just a matter of the Xushui District Land and Resources Bureau, but a common problem among administrative departments across the country. Otherwise, the vicious incidents of Beijing's mass expulsion of foreign residents and the forcible demolition of rooftop advertisements would not have occurred. Until now, we are still seeing many administrative departments recklessly infringing property rights in the name of public power. Even if these violations were stopped for some reason, the perpetrators of the acts were not seen to be punished. Therefore, people also need to have a "signature event" that punishes the administrative department for infringement of property rights.

The third "institutional signal" is judicial independence. This is a constitutional principle. Article 131 of the Constitution stipulates that "people's courts exercise judicial power independently in accordance with the provisions of the law and are not subject to interference from administrative organs, social groups and individuals." A primary indicator is whether private enterprises (and of course all citizens) can obtain judicial Serve. The most important means of interfering with judicial independence now is to force the courts to "not accept" lawsuits brought by private enterprises against government administrative departments. For example, Dawu Group wanted to sue the local government administrative department for the demolition of its billboard, but the court "didn't accept it." Clearly, "protecting property rights" is a universally needed public service that cannot be relied on just by a single word from political leaders, but by the general judicial system across the country. A court will "not accept" a legitimate lawsuit at every turn, and there will be no remedies for the security of property rights of private enterprises. Under this judicial system, isn't "protecting property rights" an empty phrase? Moreover, even if the court accepts it, there is still a question of whether it can be tried fairly. Is there still a fair trial under the direct and forceful intervention of the courts by the executive power? Obviously not. The first is that procedural justice cannot be followed.

For example, when Chongqing cracked down on the criminal case, there was an absurd scene in which the client denounced his own lawyer, and in the trial of the Li Zhuang case, all eight witnesses were not allowed to testify in court. Another example is in the second instance of Wang Chengzhong of the Liaoyuan City Intermediate Court, the trial judge and his team were colleagues with the defendant, but they could not be evaded in accordance with the law. In addition to not following the avoidance system and putting pressure on witnesses directly, what we can often see is pressure on unofficial subjects of the legal process, such as direct pressure on lawyers hired by private enterprises. This reflects that the government still regards the judicial system as its own tool rather than a mechanism for generating justice. Generally speaking, the current judicial system in my country cannot be trusted by everyone, including private entrepreneurs, because it cannot implement the constitutional principle of judicial independence. Therefore, to gradually change people's impressions, there must first be a set of "signature events", such as (1) punishment for unreasonable "inadmissibility" by the court; (2) punishment for executive branch personnel who pressure lawyers or witnesses ; (3) penalties for courts that do not follow procedural justice; and so on. It is not difficult to find such cases, it can be said that they are everywhere, the key is to make up your mind.

Only by giving these institutional signals and continuing to carry out institutional reforms in good faith, no matter whether there is a "reassurance" or not, people will feel at ease. Although the purpose of "short-term utilitarianism" in the past can still be achieved, the efficacy of "reassurance pills" will decrease with the increase of the number of doses, until it finally decays. Therefore, even if only for immediate purposes, the ruling authorities can only adopt institutional reforms that are beneficial to the long-term. At the same time, the vision of the ruling authorities should also change from short-term to long-term, from only caring for their own interests to caring for the interests of all. Although this is a bit of a situational imperative, it is also time for some kind of transcendental consciousness to emerge. What we see now is the suppression of speech, the indulgence of the executive branch, and the distortion of the judicial process, all of which are game thinking, that is, only looking at the current situation of winning and losing. In reality, however, those who win in one game will lose in multiple games. For example, suppressing the complaints and criticisms of others will make oneself make wrong judgments and wrong actions; borrowing administrative power to seize the property of the enterprise, but the stolen property is not property, but evidence of crime; direct intervention in the judiciary will lead to injustice, which may ultimately lead to injustice to oneself. would not be fair; etc. Therefore, a just system is the best system for the ruling authorities and for anyone.

The situation in China today may be the clearest demonstration of the isomorphism in principle and the complementarity in function between the market system (private property rights) and the rule of law system (restraining public rights). This relationship has long been revealed by Manser Olsen. In Dictatorship, Democracy, and Development, he said, "The conditions required to entitle individuals to maximum economic development are precisely the same conditions required to maintain a sustained democracy. Clearly, if the individual ... lacks free expression rights, lack of protected property and contract rights, or if the rule of law is not followed,... then a democracy cannot survive. Thus, a democracy requires a system of courts, an independent judiciary, and Respect for laws and individual rights is also required to ensure property and contractual rights.” (Chinese translation in Modern Institutional Economics (Second Edition), Vol. 1, p. 409, China Development Press, 2009). That is to say, the market economy contains the principle of the rule of law that constrains public power. Moreover, today, there is no room for buffering and manoeuvring between protecting private property and not restricting public power. To solve the current problems, long-term strategies are also required.

Confucius said, "It is better for me to entrust empty words than to express myself deeply and clearly." The system is not abstract, it is formed by the interaction of many concrete people. Therefore, institutional changes must have specific actions, and the resulting institutional signals. Also believe that no one is smarter than anyone else. If you play the game of appeasement and pretending to be appeased again, it's just the timing that will delay. Of the many concrete actions, those of judicial reform are perhaps the most important. Because the judicial system is a system that declares the rules of legitimate behavior to the society through precedents, rather than a system that supervises everyone and intervenes in details all the time. The latter is not only impossible to achieve, but also has many disadvantages. Because it does not resolve the question of who will oversee the supervisor. A fair ruling in a case is more beneficial to a certain party (such as the government) than the outcome of the case, and can bring more benefits to the ruling authorities. This benefit is the public's recognition of its impartiality and thus political legitimacy. Therefore, under the current situation that private enterprises are generally losing money and private entrepreneurs have no intention of operating, the reform action to transform the rescue of the crisis into the implementation of constitutional rights, the realization of judicial independence, and the effective restraint of administrative power should be positive.

November 30, 2018 at Wumu Bookstore

On December 5, 2018, "FT Chinese Network" and "China Review Weekly" were released simultaneously