A Chinese business leader reportedly called on Beijing to “respect the laws of the market economy” and improve its relationship with various industries during a major finance forum on Feb. 21.
“In respecting the market economy, genuine cooperation between government and business should pursue mutual development, instead of fostering a relationship of mutual constraint,” Michael M.H. (Minhong) Yu said at the China Entrepreneurs Forum, one of the Chinese private sector’s most high-profile forums, in Yabuli, northeastern Heilongjiang Province.
Also known as the Yabuli Forum, it was established in 2001, and its board consists of 85 renowned entrepreneurs representing diverse sectors across China.
Mr. Yu, chairman of New Oriental Education & Technology Group and also the rotating chair of the Yabuli Forum, reportedly suffered significant losses due to Beijing’s crackdown on the for-profit after-school tutoring companies in 2021.
In July 2021, the ruling Chinese Communist Party (CCP) mandated all privately owned and for-profit education and tutoring firms to register as nonprofit entities.
Consequently, Mr. Yu’s company bore the brunt of this directive.
On Jan. 8, 2022, the company’s stock (EDU.N) closed at $1.86, down 1 cent, resulting in a total market value decline to $3.156 billion, according to Chinese media. However, a year ago, on Jan. 7, the stock price of EDU.N was $169.68, and the company’s total market capitalization reached $28.798 billion.
“The company witnessed a market capitalization shrinkage of $25.6 billion in the year 2021,” reported Chinese media outlet Caijing.
It was reported that Mr. Yu’s company lost money due to tuition refunds, employee severance packages, and office closures, totaling around a loss of $2.8 billion by the end of 2021.
“The government must respect the laws of the market economy, as adherence to development norms is simply common sense,” said Mr. Yu at the forum.
He went on to emphasize that government assistance to enterprises must avoid excessive intervention; the CCP should adhere to market principles rather than restrictions, thus fostering a robust local business environment and upholding commercial integrity.
However, Mr. Yu also praised the current leadership of Heilongjiang Province for “changing its mindset,” adding that while private enterprises are grappling to survive, local authorities are able to maintain their confidence.
According to Forbes, Mr. Yu’s wealth shrunk from a high of $4.4 billion in 2021 to an estimated $1.5 billion in 2023 after the crackdown on for-profit education firms. He also fell off the Forbes China Rich List, which ranked him 118th in 2020.
Mr. Yu is not the first entrepreneur to comment on the CCP’s interference with businesses.
Alibaba’s founder, Jack Ma, criticized China’s financial regulatory system, likening it to a pawnshop mentality at the second Bund Financial Summit in Shanghai on Oct. 24, 2020.
CCP ‘Offers No Security for the Future’
China is burdened with too many “uncertainties,” commented Gao Weibang, director of the Taiwanese Victims of Investment in China Association.“Entrepreneurs are unsure about their next steps. They have successfully managed their businesses, but they cannot predict when the communist regime will interfere,” Mr. Gao told the Chinese language edition of The Epoch Times.
“Life in a society under the Chinese Communist Party’s rule offers no security for the future. The wealthy can only hope to flee and transfer all their assets abroad,” Mr. Gao stated.
