As a result of the disappearance of Chinese banker Bao Fan, investors have begun to lose confidence in Beijing’s crackdown on entrepreneurs. China’s crackdown on prominent entrepreneurs has been thrust into the spotlight once again following the sudden disappearance of a Chinese billionaire.
It has been more than two weeks since Bao Fan one of the most prominent bankers in the country went missing.
China Renaissance Holdings stated in a stock market filing on Sunday that Bao is currently “cooperating with certain authorities” in China.
The company did not provide further details about the whereabouts or condition of its chairman and chief executive, whose disappearance raised concerns about possible crackdowns.
Is anyone at risk?
The shares of the company listed in Hong Kong fell by up to 29% following Bao’s disappearance before rallying by 2.3% on Monday.
Bao is not the only victim of the disappearances. Experts describe them as “terrifying.”
China Renaissance President Cong Lin was taken into custody last September after an investigation into his work at state-owned bank ICBC’s financial leasing division.
According to William Nee, the research and advocacy coordinator for Chinese Human Rights Defenders (CHRD), “We don’t know what type of conditions they are in, whether they are in a hotel or in a prison.”
All of these practices violate the rule of law and the trend of prominent entrepreneurs being targeted shows persecution is not just a problem for dissidents.
Some of the most powerful people in China are being affected by enforced disappearances and being denied access to lawyers in this case, he told Storyline.
China targets prominent entrepreneurs for what reason?
Analysts say that although the international community views enforced disappearance as a human rights violation, the Chinese Communist Party (CCP) views it as a “standard practice.”
According to Yaqiu Wang, the senior China researcher at Human Rights Watch (HRW) the Chinese government has used the same method on many people.
It is not the first time a Chinese billionaire has been arrested or forced into the disappearance. The founder of Fusan Group, Guo Guangchang, who was nicknamed China’s Crackdown Warren Buffet disappeared in 2015 for a few days after being incarcerated for a period of time.
Xiao Jianhua, a Chinese-Canadian businessman who disappeared in Hong Kong in 2017, reportedly had his trial begin last July. As Alibaba founder Jack Ma prepared to publicly list Ant Financial in 2020 he disappeared from the public eye for several months.
Is the CCP too powerful?
The CCP’s priorities are the reason Beijing is cracking down on entrepreneurs according to some experts.
As a senior fellow at the Atlantic Council’s Indo-Pacific Security Initiative, Dexter Roberts said “Xi Jinping believes this is how the system should work, and while entrepreneurs make profits pay taxes and hire people they must also make sure their business aligns with CCP’s goals.”
This crackdown is partly driven by concerns about control over sensitive data and partly by their influence. According to Xi Jinping private companies are becoming too powerful and they are challenging state-owned companies. Roberts believes they are not showing respect for the Communist Party of China.
It is likely that, in the case of Jack Ma and Bao Fan, the Chinese government targeted them because Beijing was concerned about their businesses threatening its political monopoly on power or gaining too much control over the financing of the Chinese technology sector.
In addition to wanting these companies to succeed, the government also wants them to be under the firm guidance of the party he said.
What impact will the trend have on China’s Crackdown private sector?
Experts say investors will lose confidence in the Chinese market as Beijing cracks down on prominent entrepreneurs.
Teng Biao, a Chinese legal scholar said the CCP has suppressed private enterprises for many years and sometimes their policies lead to sudden crackdowns on entire industries.
The arbitrary arrests and convictions of Chinese entrepreneurs can leave private entrepreneurs at a loss or investors lose confidence in China’s Crackdown market China’s political future, and China’s investment environment. The money meant to be invested in China has been diverted to other places because many international and domestic entrepreneurs have lost confidence in the country,” he explained.
According to Roberts, the trend is chilling Chinese entrepreneurs.
Get the entrepreneurs to line up by scaring them
A senior member of the CCP Xi Jinping may think they can scare entrepreneurs into line while allowing them to continue doing business, creating jobs, and paying taxes, he told Storyline. The Chinese economy is in such bad shape that it needs the private sector more than it realizes.
In light of Chinese Canadian businessman Xiao Jianhua’s case according to Nee from CHRD, Chinese entrepreneurs holding different nationalities are not guaranteed to be spared in Beijing’s ongoing crackdown.
According to Nee, foreign businesspeople should think carefully about their security and what they would do if they were detained in China.
It is evident from Bao Fan’s case that international laws and standards concerning detention do not apply in China.
There will be more brutality in Xi’s rule of suppression
During Xi Jinping’s unprecedented third term in office HRW’s Yaqiu Wang believes Beijing’s crackdown on civil society will intensify.
According to her Xi Jinping’s methods will become more brutal and secretive and people’s basic rights will become less secure under his rule.
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