Pay close attention to these clips. China Renaissance plunging
overnight in Hong Kong after that company said that its chairman and
CEO is missing. But since giving this speech that
was critical of China's government, Jack Ma hasn't been seen in
public. And now many are questioning where
is Jack Ma? He is being punished for speaking
his mind. Ren disappeared last month. Now China says he's under
investigation. He's accused of, quote unquote,
serious violations of discipline and law. Notice a pattern. Billionaires in
China keep disappearing. The latest addition to the list is
balafon. A renowned investment banker who
went missing in February. However, a few days later, his
company said he was cooperating in an investigation being carried out
by certain authorities in the People's Republic of China. When someone like Bao Fan
disappears, someone that high profile who suddenly vanishes
without explanation, that inevitably sends a chilling feel
through the rest of the market. How can you feel like you can do
business in a place where an important leader of industry can
suddenly disappear? We've seen a string of
disappearances of high-profile business figures going back
literally years. It seems like we can't go too long
without another high-profile figure being disappeared. China has 969 billionaires. That makes it home to the highest
number of billionaires by country. China, a communist country,
dethroned the US, a capitalist country from the list in 2016. Xi Jinping's nation remains poised
to overtake the US as the world's largest economy. The main reason why China has so
many billionaires is that in the era of opening and reform and the
economic miracle that ensued over the past decades, China's market
has brought great opportunities to smart entrepreneurs that really
made best use of all the new fields of technology and economic
engagement opening up. But not just with China's domestic
market, but also, of course, internationally. For most of the 20th century, China
was one of the world's poorest countries. After World War II
ended, a civil war broke out between the Chinese Communist
Party and the Nationalist Party, or Kuomintang. The Communist Party's
victory marked the rise of Mao Zedong, who declared the creation
of the People's Republic of China on October 1st, 1949. During the 1950s, Mao implemented
a five year plan dubbed the Great Leap Forward to improve the
country's economy. The key features of this plan
included forced agricultural collectivization and rural
industrialization. The plan backfired, triggering one
of the largest famines in human history. China's fate changed
after Deng Xiaoping became the de facto leader of China in 1978. ...fresh flow. So if you look at the policies
under Deng Xiaoping, that was an era of kind of policy
experimentation, particularly with this idea of the free market. Deng came into power after a long
period of time in China when the economy was very much state
driven. Resources were centrally
allocated. But under Deng Xiaoping, there was
a movement towards letting the market play a greater role in
resource allocation, and this allowed entrepreneurship to
flourish. It allowed China to cultivate
commercial opportunities with the rest of the world, which really
brought a lot of development and wealth and prosperity to the
country. He famously said, You know, let
some people become rich first, and then those who become rich first
will trickle down and get the rest of the Chinese people becoming
rich. When President Xi came to power in
2012, he was still friendly to the entrepreneurial class in China
because he understood the private sector was the engine of the
Chinese economy. She slowly started showing his true
feeling toward billionaire entrepreneurs in 2015. Guo Guangchang, who was known as
China's Warren Buffett, went missing. The company later said he
was assisting authorities with an investigation. According to a source, he was
spirited out of that hotel in 2017. Xiao Jianhua was a Chinese Canadian
billionaire, abducted by Chinese security agents from Hong Kong in
2022. He was sentenced to 13 years in
prison for fraud and corruption in 2020. Billionaire real estate
tycoon Ren Zhiqiang disappeared after he called President Xi a
clown in an essay over his handling of the pandemic. The same year he
was sentenced to 18 years in prison on corruption charges. Well, these are just a few
well-known names on the list. One name that grabbed the world's
attention was the disappearance of Jack Ma, founder of Alibaba, in
2020. Well, I. Think it's probably several pieces. The rapid demise of Jack Ma. Clearly, one part of it was the
growing strength of Alibaba, his company, and particularly Ant
Financial, his financial services company. I think it was felt that
it was becoming too powerful in terms of controlling the data of
the Chinese people, information and the lives of Chinese people. It was also clearly becoming a
rival to big state enterprises and specifically the
state owned banking system. Jack did not help things by his
sometimes brash, outspoken personality. He directly
criticized the state owned banking sector. He described them as
having what he called a, quote, pawnshop mentality. And that really ruffled a lot of
feathers. So I think it was really a
combination of things, real concern about the growth of Alibaba, it
becoming a rival to the state owned banking system. And also the brash
character of Jack Ma rubbed a lot of regulators and very powerful
people in China the wrong way. Don't forget that the rise of Jack
Ma actually has a lot to do with the Chinese
Communist Party and the role of government, because before Alibaba
went IPO, I believe it's 2014 at the New York Stock Exchange, the
key money that he received was from China Investment Corporation,
which is China's sovereign wealth fund, actually. So from that
perspective, the common sense is that you don't bite the hand that
feed you. Ma, who's known for his grandiose
public presence, kept a low profile ever since the episode unfolded. Co-founder Jack Ma has returned to
mainland China. He was recently spotted at the
Jingwu School in Hangzhou, the city where Alibaba is headquartered
most. Of the last year in Japan. Dramatic downfall of Jack Ma tells
you is that in China, no matter how rich you are, no matter how famous
you are, if you run against the Communist Party or even if you are
perceived to be critical of the Communist Party, they can punish
you because the country has no human rights, even for the very
rich and famous. Jack Ma's episode was also the
start of the so-called tech crackdown in China, where
regulators targeted tech giants like Tencent, Baidu, JD.com,
Bytedance, Didi and others. China experts like Dexter Roberts,
author of The Myth of Chinese Capitalism, believe the Chinese
Communist Party viewed these tech giants as too powerful and
influential. I have referred to the Xi Jinping
era as party and command era or the politics in command
economic era. So Xi Jinping has made it very
clear and he's pursued this goal of strengthening the role of
the party throughout China. I think he used the phrase east,
west, north, south, the party rules at all. And all of this really
signals a new era where the party has far more
control over the economy writ large, but also particularly over
private business. So the question of should private
investors be fearful of Xi Jinping? I think everyone right now is
holding their breath. It's really hard to overstate the
degree to which market confidence was affected by the policy
developments over the past couple of years. China sometimes
disappears its billionaires to send a message to industry. It might be a signal that
something is coming, whether that's another industry rectification
campaign or a tightening in a certain regulatory space. On March 10th, Xi Jinping started
his historic third term as China's president. Since the president's
term limits were lifted in 2018, she is basically president for
life. His primary focus right now is to
strengthen the slowing Chinese economy, the second largest in the
world. Beijing's strict zero-covid policy
choked the country's financial health, slumping its economic
growth to 3% in 2022 from 8.1% back in 2021. It was the second slowest year for
growth since 1976. In 2020, the growth fell to 2.4%. Well, I. Think China's had a very rough
three years during the pandemic. The economy has been doing very
badly. I think there's an awareness at
the top of the Chinese Communist Party. They need private
investors. They need foreign investors to try
to rebuild the tattered Chinese economy. But I do think that this
is unlikely to be a long term trend. This market friendly
attitude, I think, is happening because China needs to be market
friendly right now. I do think longer term, it's much
more likely we will see a reimposition of stronger political
control by the Chinese Communist Party, and that's bound to be bad
for business, both foreign and entrepreneurs. This idea that private and foreign
investors aren't exactly sure what's coming down the line, and
that's really going to cast a shadow over China's economic
prospects, not just in 2023, but perhaps the rest of the 2020s as
well. As Xi Jinping clearly intends to
stay around for a very long time. He sees himself as the uncontested
ruler of China. Anyone who challenges his power or
the party's power is going to be in his crosshairs. And unfortunately,
that's what a number of private entrepreneurs have experienced
recently, as we've seen with the disappearance of balafon and
others. I think this trend is going to
continue. The Chinese. Comes to party
overall is going to be more and more repressive over the Chinese
society. And Xi Jinping is going to have
more and more power within the Chinese Communist Party. The series of disappearances of
high-profile billionaires in China is really a stark reminder that
this is a fundamentally different political system. And that rule of law, despite the
fact that the Chinese government regularly says it has established
in China, just really means something different there.
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When pigs are fattened, the CCP butchers will slaughter them for enjoyment
Apr 13, 2023 #CNBC
Jack Ma, the founder of Alibaba, made headlines when he was recently spotted at Yungu School in Hangzhou, where the company is headquartered. He had rarely made a public presence since he irked the Chinese Communist Party for criticizing the country's financial regulatory system in 2020. "He described them as having a 'pawnshop mentality,' and that really ruffled a lot of feathers," said Dexter Roberts, a senior fellow at the Atlantic Council Indo-Pacific Security Initiative and author of The Myth of Chinese Capitalism. "Also, just the brash character of Jack Ma rubbed a lot of regulators and very powerful people in China the wrong way."
Jack Ma wasn't the first billionaire who mysteriously disappeared from public view. In 2015, Guo Guangchang, who is known as China's Warren Buffet, went missing. The company later said he was assisting authorities with an investigation.
In 2017, Xiao Jianhua, a Chinese-Canadian billionaire, was abducted by Chinese security agents from Hong Kong. In 2022, he was sentenced to 13 years in prison for fraud and corruption.
The mysterious disappearance of China's billionaires hasn't stopped yet. In February, Bao Fan, a renowned investor banker, became the latest name on the list of 'vanishing billionaires.' However, a few days later, his company said he was "cooperating in an investigation being carried out by certain authorities in the People's Republic of China."
"When someone like Bao Fan disappears, someone that high profile who suddenly vanishes without explanation, that inevitably sends a chilling kind of feel through the rest of the market," said Nick Marro, lead analyst for global trade at the Economist Intelligence Unit. "I mean, how can you feel like you can do business in a place where, you know, an important leader of the industry can suddenly disappear?"
Watch the video above to find out the reasons behind China's 'missing' billionaires and their ripple effects on China's private sectors.