Vantage | Are China's two missing tycoons part of Xi's latest purge?

There’s nothing like China when speaking of business owners facing a crackdown. In that country, it’s par for the course. So the latest cases don’t really feel like news. It’s more of the same: Two more Chinese business tycoons are in trouble; one is a tech founder, and the other is an investment guru. Their names are Chen Shao-Jie and Zhao Bing-Shian, respectively.

Chen is the chief executive of Dou-Yu, a streaming platform. Zhao is a business executive. Reports say he works for a pharma company. Now both are facing a crackdown.

As always, it’s not clear why. Why were they detained? And what are they being probed for? Beijing won’t say.

As per local reports, it appears that Chen’s platform, Dou-Yu, is under the lens. It’s a leading tech company in China. From gamers to cooks, everyone uses it to live stream to their audience.

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But recently, regulators scrutinised the platform. They found pornography and gambling content. Both are illegal in China. So Chen could be in hot water over this.

His company is already in trouble; in 2019, it was worth four billion dollars. But after China’s crackdown on the tech sector, its value shrank. Dou-Yu’s current value is less than 300 million dollars. And more scrutiny will only make it worse.

But is there more to this story? Because when business tycoons vanish in China, it usually signals the beginning of another purge. There’s a long list of victims from the recent past: Jack Ma, the founder of Alibaba; Bao Fan, from China Renaissance; Ren Zhi Giang, a real estate mogul; and Guo Guang Chang, from Fosun International. They’re all billionaires. All disappeared without an explanation. And all of them resurfaced, with their reputations severely damaged.

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The reasons for their downfall were different, though; Jack Ma and Ren Zhi Giang criticised the state, so they were punished. Others were victims of the “common prosperity” policy. “Common prosperity” is a brainwave of Xi Jinping. He came up with it a few years ago. The Chinese president started a campaign. The idea was to reduce the wealth gap by redistributing wealth.

Xi implemented this plan through harsh policy changes. It led to major losses for the rich. They were spooked. And soon, they started leaving. Last year, China lost over 200 billionaires.

They left the country; this was the biggest such exodus since 2013. It was triggered by Xi Jinping’s actions, and this year could be worse. China is set to witness the biggest exodus of millionaires. Chinese entrepreneurs are looking for safer shores. Singapore has emerged as one of the favoured destinations. And Beijing has tried to undo the damage.

In July this year, China unveiled a new plan, it had 31 action points. The goal was to make business owners feel safe. Improve the business environment and win back the trust of investors. Prominent business owners backed this plan, like Tecent’s Pony Ma. He wrote an entire op-ed about this. “Extremely excited and encouraged,” he said about Beijing’s plans. Lei Jun spoke about it too, he is the chief executive of Xiaomi. He called the plan “a clear policy signal” from Beijing. He said Chinese companies should push for high-quality development. Jun called it a “clear policy signal” for companies to push forward with “high-quality development and contribute to the modernisation of science and technology”, and help modernise science and technology sectors.

But as they say, the proof of the pudding is in the eating, and the clearest policy signal from Beijing is: If you don’t suit their scheme of things, they’ll make you disappear. And Beijing does it with impunity. Two more high-profile businessmen have gone missing, and they don’t even bother to say why. This is the reality of doing business in China. Billionaires disappear. Ministers disappear. Celebrities disappear. Tennis stars disappear. Even the Interpol chief disappears. Only Xi Jinping and his erratic policies stay.