A businessman in an industrial city in eastern China jumped to his death last week after being interrogated by the local disciplinary committee. His death has highlighted the predatory nature of the Chinese Communist Party (CCP) and its disciplinary bodies, and underscored the predicament currently faced by private businesses in China.
Changzhou Huali Hydraulic Lubrication Equipment Co., Ltd. (Huali) released a WeChat post on Nov. 11, stating that under duress, its chairman, Cheng Yong, had confessed to playing a part in a bribery scheme involving a local official.
Mr. Cheng subsequently “jumped to his death to prove his innocence,” said the post, which was later deleted.
Starting Nov. 8, the 44-year-old Mr. Cheng endured three consecutive days of interrogation by the Changzhou Commission of Discipline Inspection and Supervision (CCDIS), a CCP disciplinary body. The commission was investigating the case of Yang Kangcheng, a former deputy head of the district government.
Mr. Cheng left a suicide note insisting, “I swear that I did not take his [Yang Kangcheng’s] 8-million-yuan deposits and cash bribery.” He posted a note to WeChat shortly before his death describing his time in the interrogation room as “unbearable” and indicating that he might commit suicide. He also wrote a letter to the CCDIS stating that he had not been involved in bribery.
A family member told Chinese financial media Yicai that Mr. Cheng was under tremendous stress and only slept one or two hours a night during the period that he was being interrogated. The day before his death, Mr. Cheng returned home late at night, about 11:00 p.m., saying only “I’m sorry” to his wife.
Huali’s posts were deleted, and coverage of Mr. Cheng’s death in Chinese news media was censored.
Disciplinary Watchdogs
Disciplinary bodies are scattered throughout CCP organs, financial institutions, and other entities, investigating corruption or violations of party discipline by officials and party chiefs.Meng Jun, a U.S.-based entrepreneur, told The Epoch Times that many of his business associates in China have been interviewed by disciplinary bodies and asked to “assist” in investigations.
Mr. Meng told the story of a friend, a business executive who came under scrutiny. Under the pressure of coercion, threats, and other pressure from the disciplinary committee, he died of a sudden heart attack.
When an official is being investigated, private businessmen who were associated with that official can expect to “have troubles,” Mr. Meng said. The purpose of official interrogations is “to obtain evidence from them,” he said.
According to Mr. Meng, there is no shortage of corruption and bribery in the CCP system, and disciplinary committees have discretion in deciding who to prosecute and how far to take their investigations.
“When the discipline watchdog asks you to have a one-on-one conversation for ‘assistance in the investigation,’ that is a hint: ‘the case rests on you; you'll have to make restitution, and it’s up to you how to do it,” Mr. Meng said.
The truth of Mr. Cheng’s incident is not straightforward, in Mr. Meng’s view, but he notes that it is impossible for an enterprise to be profitable in China without having some relationship with CCP officials.
Mr. Cheng was a CCP member, a representative of the Zhenglu Town People’s Congress, and a member of the political commission in Tianning District. He had served as vice president of the district’s chamber of commerce.
Where Is the Money?
On Nov. 14, Mr. Cheng’s lawyer, Zhang Qingfang, wrote to China’s top disciplinary body, stating that the CCDIS had not been able to trace the whereabouts of the 8 million yuan (roughly $1 million) it claimed Mr. Yang had allegedly accepted in bribes.That led Mr. Zhang to ask, “Why did the CCDIS force a private entrepreneur to hand over the 8 million yuan, thus pushing him to kill himself?”
According to Mr. Zhang, the CCDIS was looking for both witnesses and material evidence in order to convict Mr. Yang, which is why they turned to Mr. Cheng.
Against the backdrop of already stretched local government finances, blackmailing a private businessman or forcing a confession serves two purposes. It fulfills “the task of generating revenues, and [paves] the way for the CCDIS officials’ promotion,” by confiscating “the legitimate property of innocent executives,” Mr. Zhang said in the letter.
A Survivor’s Dilemma for Private Enterprise
Xiao Peng (a pseudonym), a local entrepreneur who does business with Huali, told The Epoch Times that the company has a good reputation in the region, allowing veteran employees to buy stock and paying them stock dividends.The practice of giving local officials a share of a company’s dividends is common in China, Mr. Xiao said.
“The CCP authorities almost completely drain the private enterprises,” said Mr. Xiao, citing local officials from firefighters, quality supervisors, and other inspectors, who use every possible excuse to get money from local enterprises.
For example, before the pandemic, Changzhou’s town of Hutang was one of the country’s most prosperous, he said. Post-pandemic, seventy percent of its private enterprises have shut down.
“Nowadays, private executives do not want to start a business. Most of us don’t want our offspring to continue to run factories, as we know that the [CCP] government has exploited us for decades. We hope our next generation will not operate a private enterprise; otherwise, all our money will go into the hands of the [CCP].”
Mr. Xiao believes that the Chinese economy will continue to falter in the next two years as government and personal debts increase, and shrinking fiscal revenue and personal incomes cannot pay off those debts.
The private sector is entangled in a survivor’s dilemma, Mr. Meng said. The CCP does not support private enterprise, and in fact, “under the rule of the CCP, private enterprises are just lambs to be slaughtered,” while the party dominates the lives of those involved in private businesses.
As a result, according to Mr. Xiao, more and more businesses are being shut down and business owners are discouraged from growing their assets because the more wealth they accumulate through hard work, the more the CCP will take from them. That does not bode well for private enterprise as a whole, although it ensures individual survival.
Some executives are able to buy their way out of danger, as in the case of former Alibaba CEO Jack Ma, who was fined billions of yuan and temporarily fled China. But many are not. Mr. Meng cited the case of Evergrande founder Xu Jiayin, who was placed under police control recently. “Stay away from the clutches of the CCP,” he warned.
