Xiao Jianhua, a Chinese-born former billionaire was kidnapped five years ago from a hotel in Hong Kong. Photo / AP
It's tough being a billionaire in Chairman Xi Jinping's China. All that money. All that success. All that influence. And, if you're the wrong person, using any of it is likely to get you kidnapped – and jailed.
The fate of former billionaire Xiao Jianhua is yet another canary in Beijing's dystopic coalmine.
He was an eccentric. He was also excessive.
He lived a life of luxury surrounded by a hand-picked all-female security delegation.
They weren't up to the job.
Xiao was kidnapped five years ago from a hotel in Hong Kong. Bundled into a wheelchair and whisked out of the building by a Communist Party security team, his offence remains unknown.
Back then, the "One Country, Two Systems" arrangement between the former colony and the mainland was supposed to keep their legal systems apart.
That fragile independence has since been all but destroyed.
Now Hong Kong's rapid decline as the independent, rules-based trading hub of Asia is mirrored by the fates of the Chinese entrepreneurs it nurtured.
Five years after disappearing, Xiao – a technology whiz turned investor from a Chinese family of no special status – will now face trial. The charges faced remain secret. All we know is his wealth and excess saw his popularity soar rapidly among Beijing's ruling elite. And he built extensive ties with global political and business leaders.
It was always going to be a volatile mix.
"China's rich are often compared to fattened geese: the party both feeds them — through connections — and eventually consumes them," argues Foreign Policy deputy editor James Palmer.
"But some, like Xiao, are a very different species. Parrots, perhaps: clever, piratical, and with the dangerous potential to reveal secrets."
He's not the only billionaire to be snatched up by the Communist Party.
Investment magnate Guo Guangchang vanished in 2015. Trading in his asset management firm was suspended. Days later, he reappeared with authorities declaring he was "assisting investigations".
Several other chief executives vanished about the same time, only to adopt much-reduced roles. Most prominent among these are former Ant Group founder Jack Ma.
Insurance firm head Wu Xiaohui divorced a granddaughter of Chinese leader Deng Xiaoping in 2015. Then, in 2017, he vanished – only to suddenly show up a year later on fraud charges.
Xiao held stakes in the personal businesses of many within China's Communist Party leadership. He acted as their financial adviser, investment broker and business partner.
"Xiao was half-fixer, half-potential scapegoat, appeasing high officials and working political connections on behalf of the wealthy," Palmer notes.
Tracking his net worth through China's convoluted accounting systems has proven difficult for analysts. But some believe it was upwards of US$6 billion.
Ultimately, Xiao may have had his fingers in too many pies.
Xi's favoured tactic to disempower his political opponents has been to subject them to his "anti-corruption" campaigns. Xi, himself estimated to be worth some US$10b, has relentlessly pursued such purges since his ascension to power in 2013.
"Xiao's clients included Xi's relatives," says Palmer. "But that didn't protect him — if anything, it put him in more danger."
Xi doesn't like his family's wealth being discussed. And Xiao dared spill the beans to the New York Times in 2014.
Now, just like the Chinese reporters who dared detail the privileged life of Chairman Xi's daughter, Xi Mingze, he finds himself behind bars.
"Xiao was certainly aware of the precariousness of his position, spending most of his time outside of mainland China once Xi came to power," Palmer notes.
The 50-year-old won Canadian citizenship in 2008. But he maintained Hong Kong as a centre of his business operations.
It was supposed to be independent. Secure.
So why make a public spectacle of him five years later?
"The trial may be a display of Xi's power as he prepares for the 20th Party Congress in the fall, where his power will be formally solidified for an unprecedented third term," Palmer explains.
Xi is breaking the rules.
Turning 69 is supposed to be a mandatory retirement age for Communist Party officials. Xi's 69th birthday was on June 15.
And tenures in the top job should be restricted to two five-year terms. But Xi tweaked the rules to grant himself perpetual power – if he chooses to accept it.
So diverting attention to other rule-breakers may suit his agenda.
"Just what he gets charged with, and which former officials are hung out to dry for being linked to him, will be revealing," Palmer concludes.
Xi regularly proclaims an agenda of sharing China's wealth equally.
He's dubbed it "Common Prosperity".
But is it real?
"When Xi claims to be interested in greater [wealth] redistribution, regardless of whether he actually does, media for both China's economic elite and the global investor class will talk it up," says University of British Columbia Professor Wei Cui.
Economic numbers, he says, reveal the true story.
"Xi's rule has so far yielded the most sustained and largest tax cuts in China since 1994 – and many of these tax cuts delivered extraordinary benefits to China's urban affluent."
That means China's top 1 per cent of income earners are only taxed 10 cents in the dollar.
It's a similar story for big, state-controlled businesses.
"The Chinese government has made large corporate income tax cuts since 2019," Wei adds.
"It repeatedly cut value-added tax [VAT] rates from 2016 to 2019. And it made a big payroll tax cut in 2020."
So the high-profile attacks on influential business people and political elites may serve a different purpose than that being broadcast.
"Xi's egalitarian credentials are much weaker than the West pretends," says Wei.
"But if China's have-nots nurture hopes for a better future, they have no one else to look to."
Xi's anti-corruption campaigns have ensnared some four million Communist Party officials, including about 400 above the rank of deputy minister.
Xi's been quick to explain why.
"After 10 years … certain unhealthy tendencies that hadn't been curbed for a long time have been reined in, many problems that had long plagued us have been remedied, and serious potential dangers in the party, the country and the military have been rooted out," Xi was quoted as saying last week.
"The Communist Party of China does not have its own interests, and party officials should not harbour any selfish interests," he declared. Instead, party officials "must put all their efforts into ensuring the people live a good life".
To back this up, he's once again unleashed his disciplinary watchdogs, ordering them to adopt a "zero tolerance" and "no mercy" attitude.
"There is still a long way to go to prevent all kinds of interest groups from converging and corrupting our officials. There is still a long way to go to effectively tackle the more invisible, deep-rooted corruption, and we still have a long way to go to eradicate it completely," he said.
The campaign has produced results. But Xi wants more.
Last week he called on his anti-corruption body to strengthen "political supervision" of local officials and ensure "complete, accurate and comprehensive" implementation of his policies.
"[You should] guide and supervise party members and cadres to truly understand the major policies of the party central, keep them in line with the party central at all times, and solidly implement its decisions," Xi said.
"There shall be no compromise, no window dressing, no playing tricks based on local or short-term interests. [We must] ensure the implementation has no deviation, no compromise and no distortion."
But Communist Party leaders and their families are among the wealthiest people in China. Though that's a matter of strict censorship.
Every major Chinese company must have Communist Party members on its board.
But success can be costly. If you don't have the proper family ties.
One study found that appearing on the Hurun Rich List of China's most successful entrepreneurs tripled the chances of being arrested or investigated in the next three years.
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