Gadfly entrepreneur fires salvo against China’s red tape, after earlier complaint got him a trip to premier’s office

Wu Hai, founder of the Orange Hotels Group of travellers’ inns, said arbitrary fees linger in China, even though the premier had vowed to cut red tape at a meeting two years earlier.

PUBLISHED : Wednesday, 10 January, 2018, 8:04am
UPDATED : Wednesday, 10 January, 2018, 11:22am

A Chinese hotelier and entrepreneur has spoken out publicly against what he calls persistent and lingering government red tape, two years after his initial complaints led to an extraordinary audience with the country’s prime minister and top policymakers.

Chinese bureaucrats are still engaged in “capricious policymaking”, hiding behind opaque rules and regulations to collect arbitrary fees and charges, even though the government had pledged to cut out unnecessary procedures, said Wu Hai, founder of the Orange Hotel Group of travellers’ inns.

Chinese Premier Li Keqiang, with whom Wu met two years ago “has been working so hard, but his intentions and directions were not well understood by the lower levels of authorities and officials,” Wu wrote on his Weibo microblog account. “They failed to get things done.”

Wu’s salvo illustrates the myriad challenges faced by Li in his second five-year term as premier, as he grapples with ballooning debt among state firms and local governments amid slower economic growth pace, all the while maintaining a business environment that’s conducive to private investments and innovation.

Chinese leaders invite entrepreneur Wu Hai, critic of red tape, to government HQ in Beijing

Wu is no stranger to being the gadfly. He addressed a 5,000-word blog post to Li in March 2015, in which he laid out case examples of an overbearing Chinese bureaucracy, along with his suggestions for improvement.

That blog post landed Wu a trip to the premier’s Zhongnanhai office in Beijing two months later, where Li had assembled officials from the tax, business and industries departments to discuss ways to cut red tape and improve efficiency. Wu was invited to sit in on the discussions.

Li ordered local authorities to pare back their roles in approving business activities, an apparent effort to give market forces a full play in the country’s economic development. He also requested governments phase out some of the fees charged on businesses to ease their financial burden.

For a while, it looked as though the participation by powerful businesspeople at the top levels of policymaking could help improve the lot of China’s private entrepreneurs.

Not so, Wu said in his blog post, as very little progress had been made by local governments over the past two and half years since the Zhongnanhai meetings. Wu could not be reached for comment.

Spokespeople at China’s taxation bureau declined to comment, as did the spokespeople at the Beijing Administration of Industry and Commerce.

Amid a slowing Chinese economy, the cabinet had been striving to improve the business environment for privately owned companies as a way of reinvigorating the world’s second-largest economy.

“Wu’s statement is well founded,” said Han Haifeng, chief executive of Shanghai New Century Packaging. “But it is still unlikely that big changes will take place soon.”

China’s small enterprises fell victim to lengthy government approval procedures and capricious policies over the past decades as many of them grumbled about officials’ inertia.

Wu founded Orange Hotels in 2006. The chain now operates 30 inns throughout China, in three price categories.

The chain was bought by Huazhu Hotels Group, the mainland’s largest hotel group early last year.