Shenyang Businesses Closed By Inspection Panic

Most shop owners in a city of roughly 8 million people have pulled down their shutters to avoid what they fear will be stringent enforcement of a city ordinance tied to the hosting of the 2013 National Games.

Small business owners in Shenyang, Liaoning province, say some stores have been closed since late July because their owners fear they’ll be slapped with heavy penalties during a citywide sweep by the local public security bureau.

Authorities have denied the reports of imminent inspections, but with sometimes hazy language. A media report posted on the city’s microblog August 7, for example, said the government had not started an intensive inspection campaign.

Local residents posted photos on the Internet showing that most stores in central shopping districts were closed. They included all the vendors in separate markets for auto parts and furniture.

Large numbers of fruit stands, restaurants, and small grocery stores were also shut down. According to the local newspaper Anshan Daily, 80 percent of the shops in one major market area had been closed, as had 95 percent of those along four major retail streets.

The tension dates to January, when the public security bureau announced on its website plans for a crackdown on counterfeit goods as part of the preparation for the National Games. It said the intensive campaign would span the period between June 15 and August 15.

In recent days, city residents have taken to the Internet to air a variety of complaints. Some said the police campaign was designed by authorities to boost government revenues ahead of the games, which will bring athletes from across the country to the city next year.

Shenyang’s government expects its budget revenues to jump 15 percent from 2011 level when it hosts the games next year. The city is also forecasting a GDP growth rate of 11 percent.

Despite what many say is a sluggish economy and declining tax revenues, the city beat its economic growth targets for the first five months of 2012 by expanding collections of various fees. Data shows non-tax fee collections grew 56 percent during the period, year-on-year.

Business owners say a slew of stores closed after a rumor circulated that shops without proper business certificates were being hit with fines.

Shop owners cited an unconfirmed report of inspectors hitting restaurants with fines of 10,000 yuan each if inspectors found flies. Moreover, in some cases employees of erring restaurants were detained by police.

Business owners generally said they had closed their shops to avoid the stiff penalties that could be imposed if inspectors decide they are violating sanitation or safety codes. A businesswoman in the auto parts market told Caixin she closed her doors so that she could not be fined by inspectors.

Wang Qingfeng is a Caixin staff reporter.