2024-03-01 07:59:28
A female entrepreneur in a poor southern Chinese province has been detained while trying to collect payment for a government-backed project. The incident sparked widespread anger, with people feeling that state power had been abused.
The case centers on a now-stall multi-million dollar resort development. The case reflects widespread dissatisfaction with the way government agencies manage the domestic economy and with previously profligate local governments struggling to repay their debts.
The controversy erupted this week. A state-run media outlet published a report on Sunday night saying that construction contractor Ma Yijiayi had spent years fighting a lawsuit to demand payment for the project from the Shuicheng District government in Liupanshui City, Guizhou Province. Late last year, local police charged her with picking quarrels and provoking trouble. She and her lawyer were criminally detained.
In response, private entrepreneurs, lawyers and state media have all spoken out, suspecting that local officials are trying to “criminalize debt” to ease financial pressure.
China’s post-epidemic economic sluggishness and sluggish real estate market have led to a decrease in land sales revenue, an important pillar of local finance, and some officials have been forced to use unconventional means to support finances. For example, using law enforcement agencies to increase revenue, or, as some observers have pointed out, to reduce debt pressure, as Shuicheng District has done.
One commenter wrote in a post on the social media app WeChat that now they don’t even pretend to be fake and just grab it openly. The article stated that using power to suppress the law and using power to play tricks are the most deadly. This article received over 100,000 views.
Reporters were unable to contact Ma Yijiayi or her lawyer for comment. The reporter called Ma Yijiayi Construction Company, but did not get through, and an email sent to the company did not receive an immediate reply.
The Shuicheng District Government stated that it had paid most of the outstanding project fees, and Ma Yijiayi was detained on suspicion of infringing on citizens’ personal information and provoking trouble. The Shuicheng District Government and Public Security Bureau did not respond to requests for comment.
On Tuesday, high-level officials in Guizhou Province held a conference to promote the development of the private economy, with the governor demanding a “comprehensive settlement of arrears on corporate accounts” to effectively reduce the production and operation costs of private enterprises. On Wednesday, the Guizhou provincial government said it had set up an investigation team to conduct a comprehensive review of Ma Yijiayi’s case and promised to “seriously hold accountable any behavior that infringes on the legitimate interests of private entrepreneurs.”
Ma Yijiayi, a 46-year-old Hui ethnic minority, was detained because of a long-standing dispute over the Shuicheng District government’s arrears of funds for rural development poverty alleviation projects. Ma Yijiayi’s construction company contracted some projects in the government’s plan to develop a tourist resort. .
According to China Business News, a newspaper run by the country’s top think tank, Ma Yijiayi began to undertake these government projects in 2016, including relocation projects for poverty alleviation, schools and resorts.
According to the state-run media outlet China Central Broadcasting Network, the planned investment in these projects is nearly 300 million yuan (equivalent to about 42 million U.S. dollars at the current exchange rate), including a bicycle track and a Whip Tuo Culture Museum. Whipping a top is a traditional folk activity in which a whip is used to beat a spinning top.
According to a 2021 CCTV report, some of the projects were suspended in 2018 due to financial difficulties in resort development. According to reports, some buildings and facilities are in disrepair, and two of the three floors of the Whip Tuo Culture Museum have been converted into supermarkets and conference venues.
Guizhou, one of China’s poorest provinces, has a particularly acute debt problem, with local authorities borrowing heavily to fund bridge and road construction and rural development projects, key components of Chinese leader Xi Jinping’s campaign to end extreme poverty.
According to CCTV, Ma Yijiayi said the instruction to stop a residential community project was conveyed verbally, without formal documentation, and project fees were not paid. In a subsequent CNR report, an official overseeing the resort’s development was quoted as admitting there were significant arrears on project payments and that local authorities were seeking more funds from superiors and external sources.
According to China Business News, Ma Yijiayi withdrew from the development of the resort in early 2020, and just weeks later, government assessors determined that Shuicheng had been lifted out of poverty.
In recent years, Ma Yijiayi’s construction company has obtained court orders to recoup some of the money it was owed and has also been sued over unpaid payments to suppliers, according to court documents reviewed by The Wall Street Journal.
According to China Business News, the Shuicheng District Government owed Ma Yijiayi about RMB 220 million for the project, but in November last year it proposed a one-time payment of RMB 12 million to Ma Yijiayi to resolve the dispute. Ma Yijiayi rejected the offer and local police detained her and her lawyer shortly after, the newspaper said.
The Shuicheng District Government said the China Business News report was untrue. The Shuicheng District Government issued a situation report early Tuesday morning, saying that the total amount of 10 projects undertaken by Ma Yijiayi was RMB 163.3 million, and the district had paid nearly 90%.
In its public response, the Shuicheng District Government accused Ma Yijiayi and his associates of tracking others and illegally obtaining citizens’ personal information by installing GPS locators and other means. The response also accused Ma Yijiayi and others of fabricating false information, arranging to hire others to maliciously hype the incident online, and posting false big-character posters and throwing leaflets in public places.
This situation report stated that the public security organs criminally detained Ma Yijiayi on November 27, 2023 because he was suspected of infringing on citizens’ personal information and provoking trouble. In its response, the Shuicheng District Government stated that the case had been transferred to the procuratorate for review and prosecution.
On social media, some users and state media commentators said the briefing was unconvincing and called on the Shuicheng district government to be more transparent.
“Is there a case of ‘turning debt into punishment’? Is there a hidden secret in it?” said Guoshi Express, a social media platform affiliated with the state-run China News Service. “More detailed explanations from the official are needed.”
“China Business News” did not immediately respond to reporters’ inquiries. Since then, reports about Ma Yijiayi’s detention have disappeared from the China Business News website and WeChat account. The reporter who wrote the story initially defended his reporting on social media and posted screenshots of documents he said corroborated his account, but his post has since disappeared.
Some leading figures have urged officials to learn lessons from the Ma Yijiayi case to avoid further damage to business confidence.
Hu Xijin, former editor-in-chief of the Chinese Communist Party tabloid Global Times, wrote on social media: “Finances in various places are tight, and some places have left corporate debts on their books for a long time, leading to the plight of many grassroots private enterprises.”
Hu Xijin said that the most important thing is probably to emancipate the mind, invigorate the economy, do everything possible to increase people’s income, and at the same time ease the government’s financial tension.
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