Dateline Peking, China: Prepare to shut up shop at any time

IF EVER a country embodied the entrepreneurial spirit, it is China at the end of the 20th century.

Access to fast-changing technology and a "flexible" approach to business arrangements and outdated regulatory frameworks contribute to a contagious optimism about money-making opportunities.

Anything seems possible - until the frontline soldiers in China's long march towards a dynasty of small private businessmen confront the might of the Chinese state.

Take the Chen brothers, in the Mawei district of Fuzhou city, in the south-eastern province of Fujian. Chen Zhui and Chen Yan have found themselves in a "David and Goliath" fight with China Telecom, the state telephone giant whose employee roll-call runs to more than a million.

It is outraged by a recent court ruling, which decreed that the Chen brothers had not broken the law in setting up an Internet international phone service in the back room of their suburban store, undercutting the sky-high call rates charged by the state monopoly.

The seeds of the trouble were planted in late 1997, when the Chen brothers launched their Internet service, offering five minutes of free international telephone time to entice customers into their electronics shop. Soon they were operating as a small phone service, attracting up to 20 callers a day.

China Telecom used its clout to send in the police, who detained the two men on charges of "endangering national security", confiscated their computer equipment, and hung on to 50,000 yuan (pounds 4,000) in cash after releasing the brothers.

Unusually for China, the Chens decided to fight back. Last May, they went to the local Mawei court, claiming that as there were no laws or regulations outlawing the private provision of telephone services over the Internet, they could not have committed a crime. They accused the police of wrongful behaviour, and demanded the return of their equipment and money. The court said they had no case.

They appealed to the Intermediate People's Court in Fuzhou. Against all expectations, the Chens won, and the original case against the police was sent back to the Mawei court with orders to be heard by the end of April.

As the case stands now, this represents something of a hollow, albeit extraordinary, victory. The police still have the computers and the money, and China Telecom swiftly introduced new regulations last September, saying that anyone running an Internet telephone service must first have its approval.

"Certain unlawful and illegitimate operators ... have taken a large part of revenues from us, amounting to several billion yuan," said Zhang Chunjiang, director of the Telecommunications Management Bureau at the Ministry of Information Industry in Peking. "This is tantamount to information smuggling,"

He said China Telecom had plans for Internet telecommunications, and did not intend to share the business with allcomers. The Chens will go down in the annals of China's commercial history as failed early champions of consumer choice. They are unlikely to be the only ones. In Peking, the small traders of Sanlitun district are involved in a similar struggle of unequals, pitting risk-taking individuals against central planners.

Over the past five years, this part of the city has evolved into the nearest thing Peking has to a Hampstead High Street.

Encouraged by a critical mass of expatriates, and a growing number of middle-class Pekingers, Chinese and foreign entrepreneurs have set up a string of small, mostly private shops and restaurants along the tree- lined Gongti North Street.

They includeJenny Lou's grocery store, Siegliende Schindler's German butcher, the Italian cheese shop, and Farid Fakhour's Middle Eastern restaurant and cake shop.

Now even the smallest foreign-invested retail business must have a Chinese joint venture partner, and the most modest private Chinese business is at the mercy of demands from local bureaucrats for extra fees, taxes and permits. Even the clearest rental lease can turn out to be worthless. Especially when the local government wants to send in the bulldozers.

All these businesses have just been told by local cadres that they have only weeks to evacuate their premises, which are to be demolished for underground heating pipes and road-widening.

"I signed a four-year lease for my restaurant building," said Mr Fakhour, a Syrian who has been doing business in China for two decades, and whose popular Thousand and One Nights restaurant opened only last April. "First I heard from other traders. Then after two or three days there was a letter, not signed, saying that they were going to demolish us."

None of the businesses will receive either compensation or the offer of alternative accommodation. In the face of a construction project blessed by central government, no one believes there is any point trying to fight.

Wang Jianying is the driving force behind the Jenny Lou grocery stores and one of the most successful small Chinese traders in Peking. Her Gongti North Street shop opened in April 1997 with a five-year lease. "How can they break it? Because it is the government's building. We spoke to them, but it's no use," she said.

If there is one essential quality for anyone doing business in China it is stamina.

"I know China very well," said Mr Fakhour. "I have my idea for business. When I lose something, I forget about it."

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Taylor Swift is applying to trademark song lyrics from 1989
The popularity of TV shows such as The Liver Birds encouraged Liverpudlians to exaggerate their Scouse accent
voicesWe exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
Life and Style
Parker says: 'I once had a taster use the phrase 'smells like the sex glands of a lemming'. Who in the world can relate to that?'
food + drinkRobert Parker's 100-point scale is a benchmark of achievement for wine-makers everywhere
Life and Style
Shoulder of lamb with herb and hazelnut dressing
food + drink
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing