For 25 years, China Fun was renowned for its peerless soup dumplings and piquant General Tso’s chicken. What left a bad taste in the mouths of its owners and loyal patrons was the restaurant’s sudden Jan. 3 closing, blamed by management on suffocating government demands. “The climate for small businesses like ours in New York have become such that it’s difficult to justify taking risks and running — nevermind starting — a legitimate mom-and-pop business,” read a letter posted by the owners in the restaurant’s front door. “The state and municipal governments, with their punishing rules and regulations, seems to...