“The world’s first village” is on the verge of bankruptcy, state-owned enterprises rush to move in to support the facade

News of bankruptcy, indebtedness, and myth-busting has been circulating in recent years around Huaxi Village in Jiangsu Province, which has been officially named the “No. 1 village in the world” by the Chinese Communist Party. “. Recently there is news that Jiangsu state-owned enterprises have been stationed in Huaxi Village to save the scene, so as to avoid the village bankruptcy “to hit the face of socialism”.

In February this year, Huaxi Village rumors that villagers braved the rain to squeeze the news. According to Sina.com, Huaxi Group, a subsidiary of Huaxi Village, has assets of 54 billion yuan (RMB, same below) and liabilities of 40 billion yuan, and is now bankrupt, but the report was quickly deleted.

The BBC published an article on March 30, directly titled “Huaxi Village: The collapse of a Chinese communist experiment”.

The newspaper quoted sources as saying that as early as March 2019, the Wuxi municipal government in Jiangsu province had emptied the entire municipal office building to hear a report on “the situation related to the liquidity difficulties of Huaxi Group”. In July last year, Huaxi Group announced its cooperation with local state-owned enterprise Wuxi Guolian Industry Investment Co.

Wuxi Guolian has recently sent people to Huaxi Village to “guide the work” and inventory assets. Wuxi Guolian said that the authorities will not let Huaxi Village go bankrupt, otherwise it is equivalent to “hitting their own face, hitting the face of socialism”.

The BBC said that the rapid “rise” of Huaxi Village once relied on preferential policies given by the Chinese Communist Party at all levels of government, and was therefore promoted as the “world’s first village”, the village’s former party secretary Wu Renbao was received by successive Chinese Communist Party General Secretaries Jiang Zemin, Hu Jintao and Xi Jinping In the 1990s, he set up the Huaxi Group, which was controlled by the village committee, opened a large number of factories, and ran free medical care and Education in the village; the group distributed annual dividends to the villagers, 20% of which were paid in cash, and the rest was kept by the group to pay for the villagers’ weddings and funerals, and the purchase of cars; the village committee also built villas for the villagers with no ownership rights but only the right to use them, and these initiatives were tantamount to carrying out a “socialist revolution”.

But long before Wu Renbao’s death, the steel industry on which Huaxi Village depended had gone to its death. After Wu Renbao’s fourth son, Wu Xieen, took over as party secretary, he began to turn to finance and high-tech industries, but that did not undo the continued decline of Huaxi Village.

The BBC says the Huaxi Group has now become a Family business held entirely by the second and third generations of the Wu family; nearly 70 percent of villagers have gone out to earn a living. Villagers say the “wealth” of Huaxi Village has nothing to do with the villagers, the money and houses are nominally their own, but they are controlled by the village committee, they are not free to dispose of, and applications for car payments are often heavily discounted, and the unpaid dividends are limited to circulation within the village. In addition, because of operational problems, the benefits provided by the group to the villagers dropped significantly.

In addition to the bursting of the economic bubble, Huaxi villagers also lost their sense of well-being because of the lack of freedom.

According to the village party committee, villagers had to be approved by the village for all expenses except for limited pocket money; even the villagers’ pocket money, which was issued as vouchers for Huaxi Village, could only be used in the stores run by Huaxi Village. In addition, Huaxi villagers can only work in Huaxi Village, every day in addition to work, but also have to meet every night to brainwash. If anyone wants to do a small business, even opening a kiosk is not allowed. There are almost no holidays for villagers, they have to work on Saturdays and Sundays, and they only have two days off each year for New Year. Villagers have to ask for leave from the factory to go out; villagers are centrally managed and are strictly forbidden to contact outsiders, and they have to ask for permission even to enter or leave the village.

Zhang Lin, an overseas dissident, said on his own media that Huaxi Village is another example of the ultimate failure of the CCP’s so-called “model villages,” which rely on preferential loans from the CCP government to survive and are themselves heavily in the red, a typical example of the “Chinese bubble.

Zhang Lin said that under the collective economy, everyone seems to live in a villa and drive a luxury car, but these are collective property, not individual property, and under the collective rule, the villagers lose their freedom. In his opinion, the fall of Huaxi Village also foreshadows the collapse of China’s economy.