In Xi Jinping’s China, people go missing all the time as the ruling Communist party routinely rounds up the powerful and the meek alike on often vague and politically motivated charges.
But the mysterious disappearance — and subsequent reappearance this week — of billionaire Guo Guangchang at the behest of still unidentified authorities was anything but routine, suggesting that private sector tycoons were being targeted by the Chinese president’s anti-corruption campaign.
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Unlike counterparts in state-owned enterprises, China’s richest private business people have so far avoided the brunt of Mr Xi’s three-year anti-graft drive and a more recent investigation into the summer meltdown on the Shanghai and Shenzhen stock exchanges. Though Mr Guo has not been accused of any wrongdoing, the suggestion that party and government investigators might be turning their attention to the private sector has shocked the country’s business and investment community. As a result, many are now bracing themselves for a potential clash of power and money in China. Any such tussle would pit one of the world’s most enduring authoritarian political parties against hundreds of recently minted billionaires, shattering the previously cosy relationship between the two.
“Successful Chinese business tycoons are not loved per se by the party but are used by it to achieve its objectives,” says Steve Tsang, a China scholar at the University of Nottingham. “The most important of [these] is continuation of party power, for which maintaining economic, financial, social and political stability is essential.”
In a recent blog post that has since disappeared, the chairman of one of China’s largest real estate companies quoted a peer who warned that the party looked upon them as “cockroaches”. Vantone Holdings’ Feng Lun wrote: “A private tycoon once said, ‘In the eyes of a government official, we are nothing but cockroaches. If he wants to kill you, he kills you. If he wants to let you live, he lets you live.”
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December 18, 2015 7:31 pm China Inc: The party vs the elite Tom Mitchell and Patti Waldmeir
Share Author alerts Print Clip Comments Guo Guangchang’s brief disappearance raises questions over Beijing’s anti-corruption crackdown Billionaire Guo Guangchang, chairman and chief executive officer of Fosun Group, pauses during an interview in New York, U.S., on Thursday, April 23, 2015. Guo is the largest shareholder of Shanghai-based Fosun Group, China's biggest closely-held investment firm, with interests in real estate, retailing and gold mining. Photographer: Michael Nagle/Bloomberg *** Local Caption *** Guo Guangchang©Bloomberg Guo Guangchang has declined to comment on his lost weekend I n Xi Jinping’s China, people go missing all the time as the ruling Communist party routinely rounds up the powerful and the meek alike on often vague and politically motivated charges. But the mysterious disappearance — and subsequent reappearance this week — of billionaire Guo Guangchang at the behest of still unidentified authorities was anything but routine, suggesting that private sector tycoons were being targeted by the Chinese president’s anti-corruption campaign. More ON THIS TOPIC John Gapper Being a press baron Watson China plan is a thing of beauty China hard to resist for foreign insurers China’s insurers outshine bank valuations IN THE BIG READ Ukraine – Still hoping for change US-Mexico border – Arizona’s open door Dealmakers – The irrepressible Mr Windhorst Climate deal – Carbon dated? Sign up now
firstFT FirstFT is our new essential daily email briefing of the best stories from across the web Unlike counterparts in state-owned enterprises, China’s richest private business people have so far avoided the brunt of Mr Xi’s three-year anti-graft drive and a more recent investigation into the summer meltdown on the Shanghai and Shenzhen stock exchanges. Though Mr Guo has not been accused of any wrongdoing, the suggestion that party and government investigators might be turning their attention to the private sector has shocked the country’s business and investment community. As a result, many are now bracing themselves for a potential clash of power and money in China. Any such tussle would pit one of the world’s most enduring authoritarian political parties against hundreds of recently minted billionaires, shattering the previously cosy relationship between the two. “Successful Chinese business tycoons are not loved per se by the party but are used by it to achieve its objectives,” says Steve Tsang, a China scholar at the University of Nottingham. “The most important of [these] is continuation of party power, for which maintaining economic, financial, social and political stability is essential.” In a recent blog post that has since disappeared, the chairman of one of China’s largest real estate companies quoted a peer who warned that the party looked upon them as “cockroaches”. Vantone Holdings’ Feng Lun wrote: “A private tycoon once said, ‘In the eyes of a government official, we are nothing but cockroaches. If he wants to kill you, he kills you. If he wants to let you live, he lets you live.”
One Chinese executive, who asked not to be named, describes Mr Guo’s disappearance as an “earthquake in financial circles”, adding that “it is a warning that people must be more cautious than ever in their dealings with the government”.