When the State Becomes the Coldest Business Partner: China’s Executives in the Grip of Fear

 

China’s anti-corruption war isn’t cleansing corruption—it’s crucifying capitalism. The state now hunts its own entrepreneurs, proving that in Xi’s empire, innovation is treason and success is a dangerous crime.

When I read that Yu Faxin—the scientist-entrepreneur who once helped build China’s military microchips—had vanished into the custody of the anti-corruption agency, I didn’t see justice. I saw a warning. A warning that in Xi Jinping’s China, brilliance is no longer protection; it’s bait. The higher you climb, the clearer the view of the trap.

Yu was not the first to disappear, and he will not be the last. His story marks a chilling shift: the state is no longer merely regulating the market—it’s swallowing it whole. What once passed as anti-corruption has become anti-capital. Entrepreneurs are learning the hard way that in China, the line between tycoon and target is a hair’s breadth—and the scissors are in the government’s hand.

Liuzhi, the so-called “supervision system,” was designed in 2018 to keep Communist Party officials in check. But like all political tools in autocratic hands, it has grown hungrier with time. Now it feeds on businessmen. The law doesn’t apply here—liuzhi operates in the shadows, parallel to the courts, accountable to no one but the Party. You don’t get a lawyer. You don’t get daylight. You don’t even get a clock. You just disappear into a fluorescent eternity until you say what they want to hear. It’s not justice; it’s psychological waterboarding with paperwork.

Since 2024, the number of detentions under this system has exploded—tens of thousands of officials, scientists, and executives locked away, some for months, some forever. By late 2025, at least thirty-nine executives from listed firms had been taken. That’s one every week, vanishing like chess pieces in a game where only the king’s move counts. The official story is always the same: anti-corruption, moral cleansing, saving the people from greed. But anyone who has done business in China knows what it really means—an iron hand searching for cash, control, and confessions.

This crackdown comes at a time when China’s economy is gasping. Factories hum but profits don’t. Youth unemployment hovers near record highs. Consumer confidence has all the enthusiasm of a deflated balloon. And when growth stalls, the state does what desperate regimes do best: it tightens its grip and calls it order.

Executives aren’t being hunted because they’re corrupt; they’re being hunted because they’re convenient. Local governments are drowning in debt, and the anti-corruption apparatus has become a fishing expedition. One province raids another’s businessmen, hoping to hook a confession or a cache of assets. They call it discipline; I call it deep-sea looting. When confession replaces evidence and detention replaces trial, you don’t need to be guilty—you just need to be rich.

The horror doesn’t end when the cell door opens. Those who make it out are often blacklisted, their names dragged through China’s notorious “credit shame” database. Imagine being banned from flying, staying in hotels, or even taking a high-speed train—all because a judge somewhere decided you owe money. It was supposed to punish small debtors. Now it’s a scarlet letter for the ambitious. Two hundred thousand entrepreneurs have already been added this year, up from just seventeen thousand before the pandemic. In Xi’s China, failure is not an event—it’s a life sentence.

Wang Jianlin, once China’s richest man, briefly landed on that blacklist in September before the order was hastily reversed. The damage was done. The message was clear: even billionaires can be grounded. Wealth buys you luxury, but not mercy.

And then there are those who never make it out at all. This year alone, several business leaders have leapt from buildings after being released from liuzhi—broken in body and spirit. Wang Linpeng, once the richest man in Hubei, killed himself days after his release. Others followed in silence. When the cage grows invisible, death begins to look like a door.

Some say Xi Jinping’s campaign is about cleaning the rot. But when a broom starts sweeping away its own craftsmen, you know it’s no longer about cleanliness—it’s about control. The anti-corruption campaign, launched in 2012, has always been political theater. The audience was the people, the target was power, and the actors were dispensable. What’s new is that the stage has expanded. The spotlight now shines on boardrooms, not just bureaucrats.

Entrepreneurship once gave China its swagger. The Jack Mas of the world—ambitious, inventive, globally admired—made “Made in China” something more than a label. But after Jack Ma’s own public scolding and retreat, few dare to follow his path. The message from Beijing is unmistakable: innovate, but never independently; earn, but never too much; speak, but never too loudly.

The irony is cruel. China wants a modern, high-tech economy powered by private innovation. Yet it is strangling the very hands that could build it. When risk equals ruin, when success breeds suspicion, when failure means exile or prison, ambition itself becomes treason.

I can’t help but think of history repeating itself. In the late Ming dynasty, merchants thrived until imperial suspicion turned prosperity into guilt. The emperor’s spies began confiscating fortunes under the pretext of moral decay. The result was predictable: investment dried up, creativity vanished, and the empire rotted from the inside. The proverb still rings true—a tree does not grow tall when it fears the axe.

Today, China’s business class lives that fear daily. Meetings are hushed. Travel is restricted. Wealth is whispered, not flaunted. The government says it wants confidence, but it governs through dread. Every entrepreneur now wakes with the same thought: who will disappear next?

Xi Jinping met with top business leaders earlier this year, promising to “support” private enterprise. But those words land hollow when the hand that offers help is the same one that knocks on your door at midnight. The so-called “private-sector promotion law” is a velvet glove over an iron fist. How can anyone believe in reform when reformers keep vanishing?

The truth is brutal. China’s anti-corruption drive is not about virtue—it’s about survival. A regime bleeding revenue, losing growth, and facing internal fractures must feed on something. Right now, it’s feeding on its own creators. The tiger that once guarded the palace has turned on the keepers of the gold.

Yu Faxin’s story is no longer a headline—it’s a mirror. It reflects a nation where progress is punished and fear is policy. In this China, success no longer shines; it flickers like a light in a windowless cell. And as the lights stay on 24 hours a day in liuzhi’s interrogation rooms, the real darkness grows outside—where entrepreneurs once dreamed, and now simply wait.