BEIJING: The mysterious case of a billionaire who went missing from Hong Kong last week, reportedly abducted by mainland security agents, has underscored the precarious lives of China’s ultra rich.
Local media say financier Xiao Jianhua was last seen at his apartment in Hong Kong’s Four Seasons hotel and is under investigation in connection with China’s 2015 stocks crash.
There is no shortage of examples of other tycoons who have met a similar fate in a country that has the largest number of billionaires in the world: 594, according to the latest ranking of the magazine Hurun.
In China, company chiefs need the backing of the Communist Party to get rich, but they also need it to survive.
It is a relationship that — when the political winds change — can leave them out to dry, experts say.
“Chinese businessmen know their country, and they all know that they must have the support of the authorities,” said Jean-Pierre Cabestan, a professor at the Baptist University of Hong Kong.
“Every day, local Communist Party officials receive gifts from company bosses… who need protection.”
Without this support, a businessman might have to pay more taxes, for example, “because taxation is very arbitrary in China,” said Willy Lam, a political scientist at the Chinese University of Hong Kong.
“If you don’t have official protection, it’s possible that your business might be wiped out, for whatever capricious reasons.”
There has been widespread speculation that Xiao’s disappearance was part of Chinese President Xi Jinping’s ongoing anti-corruption drive, which some critics believe has been used to target his political opponents.
The campaign was launched after Xi took power in 2012 and has brought down government officials and corporate executives.
“There is always the risk of being dragged into the fall of a politician when he is prosecuted for corruption,” said Jean-Pierre Cabestan.
“If your protector is doing OK then you make a lot of money,” said Mr. Lam.
But if he’s arrested “this may suddenly become a big disadvantage. So it’s a double-edged sword”.
There has been no shortage of examples in recent years.
In addition to Xiao Jianhua who is believed to be close to Xi’s family, a real estate kingpin, Guo Wengui, who had strong political connections, has fled abroad.
Several of his supporters who were at the top of the state hierarchy have since fallen in the anti-corruption purge.
The billionaire Xu Ming, who is close to former top-ranking leader Bo Xilai (a political rival of Xi), died in prison at the end of 2015.
Others, who had disappeared, resurfaced after claiming to have “cooperated with investigations”.
“In China, a joke says that if your name appears in the list of the 100 richest people in the country, then you should be careful because many of these people have been arrested for tax evasion or economic crimes”, said Willy Lam.
The former leader Deng Xiaoping was attributed with the phrase: “To get rich is glorious”; but Lam pointed out another aspect of wealth: “It is dangerous to be rich in China, certainly.”
Hong Kong haven?
While the anti-graft campaign has had few macroeconomic consequences, it nevertheless generates a cautious outlook among the business community, said Klaus Baader, senior economist for Asia at Société Générale.
“When you have major anti-corruption drives, what often happens, is that it makes decision makers very reluctant… to take decisions,” he added.
“Because they are concerned that any decision could potentially be linked back to some bribery or some degree of corruption of one sort or the another.”
Especially in China, economics, politics and the judiciary “are all linked,” said Willy Lam. “If you are arrested by the police, there is no guarantee that you will receive a fair judgement.”
As a result, many tycoons domiciled themselves in Hong Kong, reassured by the judicial independence enjoyed by the former British colony.
But it is not clear how much longer they can shelter there.
“Until what happened to Xiao Jianhua… many of these top business people thought that Hong Kong was safe, but no longer so,” said Lam.