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.