This coercive practice, known as “distant water fishing” (远洋捕捞), involves poorer inland governments reaching beyond their jurisdictions to “catch” companies based in wealthier coastal provinces. They accuse them of fraud or other wrongdoing, freeze and confiscate their assets, and then compel them to pay large fines.
A government-run research organization earlier published a memo suggesting that nearly 10,000 companies operating in the city of Shenzhen and elsewhere in Guangdong Province have suffered such “cross-jurisdiction law enforcement.” That memo, meant for internal circulation, attracted widespread attention after it was published in part in an October media report.
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A top economist, Zhou Tianyong (周天勇), had warned in late September that local governments across China have been extorting money from entrepreneurs using the Chinese Communist Party’s “disciplinary commissions.” These commissions, responsible for enforcing Party ideology and discipline, have detained entrepreneurs in their “liuzhi” detention system, where detainees are routinely tortured, intimidating them so they agree to pay the money demanded. Zhou’s post has since been deleted.
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The Chinese government has sought to jumpstart its sputtering economy and restore business confidence by reiterating the Party’s support for private entrepreneurship.
But whatever reassurances the government may profess, in authoritarian systems where the laws are under the government’s control, nobody is truly safe.
[Edit typo.]