Pref­er­en­tial treat­ment is a blight on lo­cal busi­ness en­vi­ron­ments

China Daily (Canada) - - WORLD -

a man­u­fac­turer of so­lar en­ergy water heaters in the pre­fec­ture-level city of Dezhou, East China’s Shan­dong prov­ince, posted an open let­ter on the in­ter­net last week, com­plain­ing bit­terly that the Dezhou Party chief Chen Yong’s malfea­sance had caused great dif­fi­cul­ties for his busi­ness. Bei­jing News com­ments:

The Dezhou au­thor­i­ties replied im­me­di­ately that Huang has com­mu­ni­cated with lo­cal of­fi­cials face to face, and the “his­tor­i­cal prob­lems” re­flected in his let­ter will be stud­ied care­fully and re­solved.

But if Huang in­tends to dis­close the dis­ci­plinary prob­lems and graft of the lo­cal Party chief, the Dezhou au­thor­i­ties are not the right re­ceivers of his com­plaints, he should be de­liv­er­ing them to the pro­vin­cial or higher level su­per­vi­sors.

Of­fend­ing the lo­cal gov­ern­ment might be the last thing on the minds of busi­ness­peo­ple. But once that is done, it means their busi­nesses have ar­rived at a life-or-death mo­ment.

Ac­cord­ing to Huang, sev­eral years ago, Himin Group, fol­low­ing the Dezhou gov­ern­ment’s or­der, took charge of build­ing a venue for a world so­lar power city con­ven­tion that Dezhou in­tended to host in the near fu­ture. But af­ter a reshuf­fle of the lo­cal gov­ern­ment two years ago, the gov­ern­ment has re­fused to grant the com­pany the right to use some land, which the for­mer gov­ern­ment of­fi­cials al­lot­ted

it to pay for the com­pany’s con­struc­tion of the venue.

This case lays bare the tricky re­la­tions be­tween suc­cess­ful en­ter­prises and lo­cal gov­ern­ments. Some of­fi­cials view such en­ter­prises as boosts for their pro­mo­tion, as these com­pa­nies can beau­tify lo­cal eco­nomic data in a short time.

In re­turn, the of­fi­cials usu­ally pro­vide the com­pa­nies with pref­er­en­tial treat­ment, re­ward­ing them with land, tax re­im­burse­ments and cheap loans.

The in­ter­est ex­changes be­tween lo­cal power hold­ers and busi­ness­peo­ple mean they both profit from the use of pub­lic re­sources or as­sets and lu­bri­cate their re­la­tions with pub­lic funds. Once the en­ter­prises be­come de­pen­dent on this pref­er­en­tial treat­ment, their de­sire for in­no­va­tion dies out, and their fu­ture is al­most cer­tainly doomed should they no longer en­joy the fa­vor of lo­cal of­fi­cials.

Putting an end to lo­cal of­fi­cials’ in­ter­fer­ence is the very first step to en­sure that the busi­ness en­vi­ron­ment is char­ac­ter­ized by fair play, trans­parency and the rule of law.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.