The mysterious disappearance and reappearance of a Chinese billionaire

In this December 2013, photo, Xiao Jianhua, a Chinese-born Canadian billionaire, reads a book outside the International Finance Centre in Hong Kong. Photo / AP file

Xiao Jianhua was a Chinese billionaire based in Hong Kong who disappeared in late January.

Until this past weekend, when he became the Chinese billionaire based in Hong Kong who crossed into mainland China legally to help mainland investigators.

As a student, Xiao led pro-democracy protests in 1989. As an adult, he ran the investment company Tomorrow Group.

In 2014, he admitted to the New York Times he had helped Chinese President Xi Jinping's family "dispose of their assets when they were coming under scrutiny".

Since then, he has lived out of Hong Kong's Four Seasons Hotel, which was where he was last seen before reports emerged of his disappearance.

Various media outlets reported that he entered China on January 27, but didn't clarify how, why, or whether he did so on his own volition.

The reports fanned fears in Hong Kong, which is part of China but has a separate legal system, that China was demonstrating its increasing influence in and over Hong Kong.

If Chinese authorities abducted Xiao, they'd have done so in defiance of Hong Kong's laws. "This looks to be an extreme abuse of the one country, two systems pledge," Doug Paal of the Carnegie Endowment for International Peace told Foreign Policy.

But on Saturday and Sunday, the Beijing-friendly South China Morning Post reported that Xiao was in China assisting in investigations - and in touch with his family and businesses.

Their sources - and Hong Kong's chief of police - said Xiao had not been kidnapped, but rather had crossed the border normally and legally. He was in the mainland to work with authorities on investigations into bribery and stock market manipulation. (This, Paal noted, is always the official line.)

The South China Morning Post said yesterday that this was a win for China, which was demonstrating that it would not kowtow to tycoons or their potential to influence markets or tolerate any shady business deals.

Which perhaps it would be, if anyone could say for certain that that is in fact what happened.

But "nobody knows what's really happened," Zheng Wang, a Carnegie Fellow at New America, told FP. What he does know is that this is a particularly Chinese case.

The reason it's so fascinating and so little understood, Wang said, is that people like Xiao are the people who connect Chinese leadership and society. They serve as "white gloves" to the politicians.

But the question is which faction Xiao's white gloves serve - or "who is behind him," as Wang put it - particularly ahead of China's 19th party congress, scheduled for later this year, and the political jostling and transition that could come with it.

The Chinese Government likes to say that its system is socialism with Chinese characteristics, Wang explained. But it isn't, he argues. It's capitalism with Chinese characteristics.

One of these characteristics is to remind businessmen that they serve the state, not the other way around. And that they don't need to explain to the press or public exactly what happened in the case of Xiao Jianhua.

- Foreign Policy