Disrespecting Business Success Goes Global

I thought that America under the Obama administration was the only government that actually tries to prevent businesses from making money. Through an onerous tax system, oppressive regulations, an ill-conceived energy policy and a lack of banking options, American entrepreneurs are castigated for succeeding and making a profit.

The exceptions, of course, are companies that give big donations to Obama’s Democratic Party.

But China has mastered the art of not only diminishing successful companies, but also jailing their owners.

A small news item in The Wall Street Journal notes that “it’s gotten so bad, that 30 Chinese officials, including managers of state-owned enterprises, are known to have committed suicide this year.”

There is a belief that once a company starts making lots of money and makes the “rich list,” Chinese officials will take notice and punishments will begin, including being jailed.

You have to wonder whether a prisoner’s uniform is being fitted for Jack Ma, founder of Alibaba Group, the world’s largest online commerce company.

See if you recognize this story. Chinese companies that are well-connected to the Communist Party and its officials, and make “donations” to the party, are allowed to thrive.

If you look around the U.S. at companies that seem to circumvent regulatory and tax laws, they all are well-connected — and make big donations — to the Obama administration.

It’s ironic that the big lesson that China learned from the U.S. is the power of cronyism.
And this doesn’t apply only to domestic businesses in China.

China has launched an anti-corruption campaign that seems to be targeting U.S. companies doing business in China.

Essentially, when a company starts to make money, there is an assumption that they are succeeding because they are corrupt.

But China is an equal opportunity abuser and uses this same corruption accusation against their own companies. Of course, those Chinese companies that are actually corrupt and give money to Party officials seem to avoid corruption charges.

Jeremy Gordon, a consultant and author of China: Risky Business who writes about the crackdown on foreign drug companies doing business in China, told Forbes: “There’s a Chinese saying that paraphrased is ‘You kill the chicken to scare the monkeys.’ In essence you take a very visible example and show it around to the market and say: ‘This could be you — back off.’

“Which ones [foreign or domestic drug companies] are going to feel the heat first? If you’re going to give a message to the market, enforcement can be selective. Foreign companies make a good target in that you can send a very clear message that the nature of the game has changed.”

This presents a daunting challenge to U.S. companies: Do we expand overseas to open new markets but risk being targeted and punished by countries like China? Or do we stay in America and risk being targeted by the FDA, FTC, DOE and EPA that could punish our ability to make money?

Many people think that we should emulate China’s global success. I’m not one of them, and no one else should be either. A recent survey by Barclays found that 47 percent of Chinese people with more than $1.5 million in assets are planning to leave China.

Beneath a veil of wealth in China is a festering mess characterized by corruption, intellectual property theft, choking smoke, high unemployment and a descent into poverty for the average Chinese family.

America should be setting the global standards for how free enterprise works. That means allowing entrepreneurs to succeed and recognizing that making money in the U.S. is the American Dream, not a sin.

It’s about time that Obama stops “killing the chickens to scare the monkeys.”

Leave A Comment