Chinese Celebrity Companies Shut Down in Droves as CCP Clamps Down on Entertainment Industry

The cover of a fashion magazine shows Chinese actress Zheng Shuang, at a newsstand in Beijing, on Jan. 21, 2021.Jade Gao/AFP via Getty Images

As the Chinese communist regime continues clamping down on the entertainment industry, hundreds of celebrity-owned studios and companies have recently been closed down.

The Chinese regime has been targeting the entertainment industry with stricter inspections for tax evasion. Meanwhile, top Chinese stars, such as Zhao Wei and Zheng Shuang, have been blacklisted by the state-run media and their fan clubs have been quickly closed down.

Art studios registered under celebrity names had grown at an amazing rate in the past few years, but this year many of them have filed applications to close down. So far, more than 700 studios have been shut down. In June alone, more than 100 companies applied for dissolution.

According to public data, in 2016, the annual registration growth rate of celebrity art studios and companies reached nearly 100 percent, and the number of new companies in 2018 exceeded 3,000.

However, as of Sept. 12, 2021, there have only been approximately 260 newly registered companies owned by celebrities this year, a decrease of 278 percent from the same period last year.

An anonymous studio financial officer told a Chinese language media that celebrities register individual studios as sole proprietorships to avoid paying corporate income tax and to obtain a relatively low tax rate. In addition, some stars with higher incomes set up multiple studios, each with a small number of people, in order to pay taxes on each studio separately, which amounts to paying fewer taxes.

Regarding the Chinese regime’s clampdown on the entertainment industry, analysts believe there are both economic and political reasons behind it.

U.S.-based current affairs analyst Li Zhengkuan wrote in his commentary for the Chinese language Epoch Times that the Chinese communist regime has encountered stronger resistance from the Western democracies in recent years, coupled with the depression caused by the COVID-19 epidemic and domestic economic crisis. In order to prevent the regime from collapsing, the ruling Chinese Communist Party (CCP) has tightened its grip over all resources. Closing down the country, allowing only one voice, and preparing for war have become the CCP leader Xi Jinping’s policy choices.

“This time the CCP’s targeting of the entertainment industry is not just ‘cutting chives’ (a popular Chinese term to describe the regime taking money away from people through manipulating policies), but also promoting so-called ‘common prosperity,’ and taking the opportunity to launch the second Cultural Revolution. It also involves the fierce political struggles among the top leaders of the CCP, as different CCP factions are behind China’s corrupt entertainment industry,” Li added.

Current affairs commentator Tang Qing noted that the crackdown on the entertainment industry is to reinforce the authority of the CCP. “Art and public opinion can only be controlled by the party, not by the rich Chinese or the celebrities. When the number of a star’s fans exceed the number of CCP members, it will not allow it and has to crack it down,” Tang wrote in his article for the Chinese language Epoch Times.