Sun Dawu was a vocal critic of China’s ruling Communist Party. Now he’s serving an 18-year sentence for corruption. Criminal defense lawyers say he is one of the most prominent targets in a crackdown on business leaders, as the Party deepens control over the economy.
In a handwritten submission from his prison in rural northern China, billionaire pig and chicken farmer Sun Dawu implored the court to hear his appeal. He was serving an 18-year sentence on charges including corruption. There was far more at stake than his own unjust conviction, the 70-year-old tycoon wrote in his Nov. 16 plea.
Without his leadership, the business he’d built for decades would collapse, he warned. His company, Hebei Dawu Agriculture and Animal Husbandry Group, had more than ten thousand employees.
If his appeal was delayed, “the enterprise will be completely wrecked,” he wrote in the legal document, seen by Reuters. “I don’t think this is what leaders of the court, party committees and governments at all levels want to see.”
The collapse of the giant business Sun built would indeed be unwelcome for Chinese leaders, at a time when a massive property crisis poses the biggest threat to China’s economy in decades. But his jailing in July 2021 shows how power is as big a priority as prosperity for the Chinese leadership.
Sun is one of the highest-profile casualties in a campaign under President Xi Jinping to clamp down on tycoons and top executives who are seen as a threat to the Communist Party’s control over the economy, according to Chinese criminal defense lawyers and fellow entrepreneurs familiar with Sun’s case. In the past three-and-a-half years, at least three dozen top business and financial figures have been detained, investigated, indicted or jailed, according to the website of China’s Central Commission for Discipline Inspection, police statements, reports in state-controlled media and stock exchange filings.
Of these, at least 22 were in the private sector and more than a dozen worked at state-controlled firms. The biggest names are in the private sector, which accounts for more than half of GDP and the majority of jobs in China.
In Sun’s case, he dared to be a persistent critic of the Party and a long-time supporter of pro-democracy activists and liberal intellectuals in China. His 18-year sentence effectively spells life in jail given his age, his lawyers say.
It sends a clear message, they add: The party is committed to quashing any threat to its monopoly on power, even at the cost of economic growth.
China’s leadership rejects that view. The government “attaches great importance to the private sector,” and the suggestion that China is “cracking down” on business is false, a government official told Reuters. A crackdown would contravene China’s stated policy goals and run counter to its interests in developing private enterprise, the official said.
So far, the Hebei Province People’s High Court hasn’t agreed to hear Sun’s appeal, his legal advisers say. In addition to Sun, his family and top executives were jailed in the case.
Sun’s company is also under new management. In April 2022, Dawu was sold to a group set up just three days before a court-ordered auction, Chinese corporate filings and court documents show. It was sold at a fraction of its true value, according to social media posts by his family. Reuters couldn’t independently confirm the value of Dawu Group or the current financial health of the business.
This account of Sun’s imprisonment and battle to regain his freedom is based on previously unreported legal and court documents, along with new details from interviews with his lawyers, dissidents and fellow entrepreneurs.
Xi’s forceful assertion of state control over big business is another chapter in the turbulent relationship between individual enterprise, capital and the Party since the Communists seized power in 1949. Private business played a crucial role in reviving China as it emerged from the economic calamity of the Maoist years, when it was better to be “red than expert,” according to one of the slogans at the time. After Mao, in the era of Deng Xiaoping, a new slogan emerged: “to get rich is glorious.”
Now, the Chinese leader sees menace in the rise of a tycoon class, say Chinese human rights lawyers, dissidents and some academics.
“You can’t look at Sun’s case in isolation,” said Li Jinxing, who was one of China’s top criminal defense and human rights lawyers before being disbarred for criticizing legal and political authorities. Unable to act in the case himself, Li assembled a team of about 30 lawyers who unsuccessfully represented Sun and some co-defendants. “In my opinion, the case is part of China’s wide-ranging elimination of private businessmen who have gained broad social influence.”
Sun’s fate does appear to fit a pattern. In September 2020, real estate tycoon and blogger Ren Zhiqiang was sentenced to an identical 18 years for corruption. Ren was detained after an article, widely attributed to him and circulated online, criticized the government’s handling of COVID-19. Without naming the Chinese leader, the article described the authority responsible for the pandemic response as a “clown stripped naked” – remarks widely interpreted as an attack on Xi.
Reuters couldn’t independently confirm if Ren was the author of the article. He couldn’t be reached for comment. When Ren was expelled from the Party in 2020, investigators said he had “shown disloyalty” and “besmirched” it, the government official told Reuters.
Also jailed for 18 years in 2018, for fraud and embezzlement, was Wu Xiaohui, former chairman of Anbang Insurance Group. Anbang was best known abroad for acquiring New York’s landmark Waldorf Astoria hotel. Prosecutors said Wu displayed unchecked ambition and reckless expansion, which resulted in risks to the Chinese financial system – a charge also leveled at other business moguls. He was also charged with fraud and embezzlement involving more than $10 billion.
Li Jinxing, the former defense lawyer, said he was Wu’s attorney for his appeal but was barred from meeting him. Li noted that Wu, Ren and Sun – three different tycoons in different places charged with different crimes – all got the same sentence.
“This isn’t a coincidence,” said Li, who left China in 2022 and is now living in Tokyo. “It’s very simple. The authorities want them to die in jail. It’s terrifying when you think about it.”
China’s top leadership has been promoting its support for the private sector as it seeks new investment at a time when economic growth has slowed. At a key meeting in July, the so-called third plenum, leaders resolved to leverage the role of market forces in the economy.
In comments in state media, Xi has stressed China remains committed to two “unswerving commitments” – developing the private and state sectors at the same time. Xi has also said the Party believes that private business owners and entrepreneurs “belong to our own family.”
Still, as the Party tightens control over business leadership, dozens of other high-profile entrepreneurs and executives have been jailed, arrested and sidelined – or have vanished from sight, widely believed to have been detained and put under investigation.
Alibaba’s Jack Ma, once a ubiquitous presence in the tech world, has been largely absent from the business since publicly criticizing Chinese regulators in 2020. He now stays mostly out of view.
Celebrity banker Bao Fan resigned from his posts of chairman and CEO of China Renaissance Holdings Ltd, citing health reasons and a desire to spend more time with his family, according to a filing to the Hong Kong stock exchange in February. Earlier, the investment bank had announced that Bao was cooperating in an unspecified investigation, without elaborating. China Renaissance didn’t reply to a request for comment.
Also in February, a Chinese court imposed a suspended death sentence on the former president of China Merchants Bank, Tian Huiyu, after convicting him of charges including bribery and insider trading.
Source: https://www.reuters.com/investigates/special-report/china-economy-crackdown-tycoons/