The disappearance of tech dealmaker Bao Fan last month has reignited interest in a more recent Chinese phenomenon – the disappearance of billionaires.
The founder of China Renaissance Holdings – with a client list that includes internet giants Tencent, Alibaba and Baidu – is considered a titan in the country’s tech sector.
Mr. Bao’s case has taken a well-trodden path: he was reported missing for days before his company announced that he was “collaborating with an investigation being conducted by certain authorities in the People’s Republic of China.”
As has also become common, it has not yet been announced which government agency is conducting the investigation, what the matter is, or where Mr. Bao is.
The mystery surrounding his disappearance comes after a number of Chinese business leaders have disappeared in recent years, including Alibaba CEO Jack Ma.
While disappearing billionaires tend to get much more attention, there have also been a number of lesser-known cases of Chinese nationals who have gone missing after taking part in anti-government protests or human rights campaigns, for example.
The disappearance of Mr. Bao has once again put the spotlight on the view that this is how President Xi Jinping is tightening his grip on the Chinese economy.
It came ahead of the annual National People’s Congress (NPC), a parliamentary assembly that announced plans this week for the biggest overhaul of China’s financial regulatory system in years.
A new Financial Supervision Authority will be set up to oversee most of the financial sectors. Authorities said this would close current loopholes created by multiple agencies overseeing various aspects of China’s trillion-dollar financial services industry.
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In 2015 alone, at least five executives went unreachable, including Guo Guangchang, chairman of the conglomerate Fosun International, best known in the West as the owners of English Premier League football club Wolverhampton Wanderers.
Mr. Guo went missing in December of the same year, and after his reappearance, his company announced that he had helped with the investigation.
Two years later, Chinese-Canadian businessman Xiao Jianhua was kidnapped from a luxury Hong Kong hotel. He was one of China’s richest people and was jailed for corruption last year.
In March 2020, billionaire real estate tycoon Ren Zhiqiang disappeared after calling Mr Xi a “clown” for his handling of the pandemic. Later that year, Mr. Ren was sentenced to 18 years in prison after a day-long trial on corruption charges.
The most famous missing billionaire was Alibaba founder Jack Ma. China’s then-richest person disappeared in late 2020 after criticizing the country’s financial regulators.
The planned mega-listing of shares in financial technology giant Ant Group has been put on hold. And despite donating nearly $10 billion to the Common Prosperity fund, he hasn’t been seen in China for more than two years. He was also not charged with any criminal offences
Mr Ma’s whereabouts remain unclear, although there have been reports that he has been seen in Japan, Thailand and Australia in recent months.
The Chinese government insists that the crackdown on some of the country’s richest people is purely legal and has pledged to root out corruption. But Beijing’s actions are also taking place against the background of decades of liberalization in what is now the world’s second largest economy.
This opening helped create a band of multi-billionaires who, with their immense wealth, had the potential to wield considerable power.
Now, some observers say, the Chinese Communist Party under Mr Xi wants that power back and is approaching the task in ways that are often shrouded in mystery.
The theory is as follows: The big companies, especially the technology industry, have seen an increase in power under the policies of Mr. Xi’s predecessors, Jiang Zemin and Hu Jintao.
Previously, Beijing had focused on traditional centers of power, including the military, heavy industry and local governments.
While maintaining a firm grip on these areas, Mr. Xi has broadened his focus to take control of even more of the economy. His Common Prosperity policies have led to massive crackdowns on much of the economy, with the tech industry coming under particular scrutiny.
“Sometimes these incidents are orchestrated in a way that sends a broader message, particularly to a specific industry or interest group,” Nick Marro of the Economist Intelligence Unit told the BBC.
“Ultimately, it reflects an attempt to centralize control and authority over a specific part of the economy, which has been a key feature of Xi’s style of government over the past decade,” he added.
“Beijing remains focused on ensuring that big tech platforms and players don’t develop their own brands and leverage that make it harder for them to contain them and more likely to go against Beijing’s preferences,” said Paul Triolo, head of the China and Technology Policy Division at China a global consulting firm said the Albright Stonebridge Group.
Another key to shared prosperity is the rule of law and that the rules must apply equally to rich and poor.
Beijing claims the policy is aimed at narrowing the widening wealth gap, which many say is a key issue that could undermine the Communist Party’s position if left unaddressed. The country has seen growing inequality – and Mr Xi is said to be facing pressure from ultra-leftists wanting to get closer to socialist roots.
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The mystery surrounding the billionaires’ disappearance, along with general concerns about Beijing’s approach to business, could have significant unintended consequences.
Some China watchers suggest the government is risking scaring off new business talent.
“The threat for Beijing to make targets out of tech billionaires puts more pressure on tech entrepreneurs hoping to become the next Jack Ma,” said Mr. Triolo.
Mr. Xi seems aware of the risk of scaring business sentiment, and in a speech to NPC delegates this week he stressed the importance of the private sector for China.
But he also urged private companies and entrepreneurs to be “rich and responsible, rich and just, and rich and loving.”
Along with the announcement of a new financial regulator last month, bankers were also warned against following the lead of their “hedonistic” Western peers.
Commentators see this as further evidence that Mr Xi has his sights set on the financial system.
“In recent months we have seen hints of the common prosperity agenda in financial services, particularly in relation to executive pay and bonus schemes and the pay gap between management and junior staff,” said Mr. Marro.
It remains to be seen whether Mr Xi’s crackdown on billionaires will help him significantly consolidate his position of power.
However, what is certainly at risk is confidence in China’s financial markets, companies and ultimately the economy at large.
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