Struggling economy
Mao's rant, as well as a recent case of overcharging in Xuexiang village, another tourism spot in Heilongjiang, has also aroused heated public discussion on the broader business environment in Northeast China, where the widely held belief that "people should not invest beyond Shanhaiguan into the northeastern region" was once again highlighted.
Shanhaiguan was once known as a gateway along the Great Wall to China's three northeastern provinces — Heilongjiang, Jilin and Liaoning. Over the last five years, the three provinces, burdened with mounting debts, have ranked among the lowest five slots in China's annual provincial GDP growth ranking.
Some investors have pointed out that the region's lackluster economy is due to a "bureaucratic and abusive system" that has been rigged against private enterprises, as indicated in Mao's video.
A 31-year-old local investor surnamed Liu, who in 2014 set up a mechanics and electronics company in Changchun, capital of Jilin, told the Global Times over the weekend that building relationships with officials and bribing them "with gifts" is "extremely important" in Northeast China.
"Otherwise, local authorities may deliberately pose hurdles to your business," Liu said, with reference to his own experience.
In 2014, Liu was qualified to receive a 30,000 yuan ($4,599) government fund for a private company based on policy privileges for veteran businesspeople, but local regulators did not grant the fund to him due to his "lack of personal connections with senior officials," Liu said, indicating a lack of effective law enforcement and bias in the region.
Liu's opinion is echoed by another investor surnamed Wang.
Wang, aged 50, used to own a shopping mall in Changchun. But in 2012, his property, valued at 300 million yuan at the time, was seized by the local economic investigation department for "unspecific reasons." Later, the mall's asset ownership was transferred to someone else without his knowledge or consent. Since then, Wang has been appealing the case to the courts.
"The regulators at that time approached us and said that I could pay 5 million yuan to [get back] the shopping mall. I refused and ended up losing all my investment … [The scenario] is a typical case of local authorities seeking rent power," Wang told the Global Times on Monday.
In response to such cases, industry insiders have warned investors of a vicious cycle amid the ongoing spotlight on Northeast China's "hostile" business environment, which could eventually lead the region to lose its last bite of economic vitality.
"The more private corporations are treated unfairly, the less people are likely to invest here … As a result, both talents and capitals are fleeing elsewhere," Liu said, noting that he is also considering moving his factory to East China.
Better environment
Although Northeast China lags behind East China, the business environment in Northeast China has in fact changed and improved in recent years.
Zhou Jianping, a senior official of the National Development and Reform Commission (NDRC), said on Friday on the sidelines of a meeting on revitalizing Northeast China's economy that Mao's experience is just an "individual case" and therefore should not be used to deny local governments' efforts to create a friendlier commercial environment.
"For example, Liaoning has set up China's first business environment administration," Zhou was quoted as saying in another Xinhua report.
Liang Qidong, vice president of the Liaoning Academy of Social Sciences, told the Global Times on Monday that governments in Northeast China have sought to transform their function "from control-oriented to service-oriented" in recent years.
Xu Xiaobin, chairman of Qianding Group based in Shenyang, capital of Liaoning, which makes reduction gears, also praised the local government's practices of simplifying approval procedures and issuing favorable policies to rejuvenate the heavy industry.
Experts have also taken note of beneficial policies that will lay a solid foundation for the boosting of Northeast China's economy.
In recent years, the central authorities have rolled out a batch of documents on revitalizing Northeast China and are also helping to set up a number of free trade zones in the region, according to Liang.
A financial cooperation mechanism for Northeast China, led by the China Development Bank and the State Development and Investment Corporation, is also under way, the NDRC announced on Monday.
Against the backdrop, Xu told the Global Times that he is confident of the prospect of investing in Northeast China, although improving the local environment may "take some time."
