Why Worried Wealthy Chinese Should Consider Getting Out While The Going’s Good

China is the world’s second biggest economy, with more millionaires and billionaires than anywhere else. Wealthy Chinese nationals are the no.1 purchasers of citizenship by investment and investor visa programs globally, but as the case of Xiao Jianhua has showed, having such a document and not using it properly won’t save you from the authorities.

Chinese financier Xiao Jianhua appeared to have it all; a personal fortune valued at $6 billion, a thriving business known as the “Tomorrow Group”, with investment interests in banking, insurance, real estate development and rare earth minerals, property in North America and the Caribbean, his own private jet, a happy family, and crucially, he had the right connections within the Chinese ruling communist party, and was a family friend of Chinese president Xi Jinping himself.

However all of that wealth, influence and connections couldn’t help him when the Chinese secret police came-a-calling. Jianhua was proud of additionally owning both Canadian and Antiguan citizenship, but ironically, if Xiao had only had the foresight to use one of his two additional foreign passports and leave China for the safety of the West, he would surely be a free man today.

Chinese Success Story

45-year old Xiao is a self-made man, who began his career in business by selling laptop computers to fellow students in the 1990s. He worked with Microsoft for several years during the company’s largest growth period, and eventually accumulated stock shares in excess of $100 million. He used these funds to start his own company Tomorrow Holdings (which trades as the Tomorrow Group) and with a combination of business skills and guile, made key investments in companies like Ping An Insurance and the Harbin, Huaxia and Industrial banks, just as China became a member of the WTO (World Trade Organization) in December 2001, a move which sent the valuation of those companies and Xiao’s own through the proverbial roof, and turned him into a multi-billionaire virtually overnight.

Soon after, Jianhua appeared to blatantly contravene Chinese law by becoming a Canadian citizen and passport holder after making substantial investments in that country. China does not allow dual citizenship, but nevertheless soon after, Xiao gained another such document when he was awarded a diplomatic passport from Antigua and Barbuda.

Xiao’s foreign profile grew, and he soon became one of China’s most well-known billionaires, and in 2014 was the subject of an in-depth article in the New York Times that painted a picture of a man who had chosen not to join fellow students during the historic and tragic Tiananmen Square protests (and subsequent massacre) some 25 years earlier, and that pro-government stance may have greased the wheels of his rapid rise through the economic ranks.

Abduction and Disappearance

Jianhua had been staying in his apartment at the Four Seasons hotel in Hong Kong when on January 28, 2017, he was reported missing, seemingly abducted. As concern for his welfare spread, he apparently posted these two statements on one of his company’s social media accounts:

Regarding the reports on me in recent days, I have to say that I, Xiao Jianhua, have not been abducted and have in fact been recovering from an illness outside the country.”

I deny doing anything to harm China’s ruling Communist party or working with any opposing forces or organizations.”

Both posts were removed soon after, and were followed by the Hong Kong police issuing a statement that Jianhua had in fact accompanied the authorities into China through one of the city’s land-border crossings the previous day, totally contradicting Jianhua’s claim that he was abroad receiving medical treatment.

It soon became apparent that what had actually happened was that Jianhua had been accosted by two plain-clothed Chinese secret police at his Four Seasons apartment, and taken to the Chinese mainland. CCTV footage emerged, showing Jianhua cooperating fully with his accosters, and the three men walking casually together (pictured above).

He hasn’t been seen since.

Reasons For Abduction

It now appears that Xiao is in police custody on the Chinese mainland, although as of yet no official statement has been made aside from this rather vague and cryptic effort that appeared soon after on the police website:

The police investigation continues and we have asked relevant mainland departments to assist with following up on the situation of the victim in the mainland.”

There is speculation that Jianhua may be assisting the police with the ongoing “Anti-Graft” investigation, the in-depth and far-reaching campaign against corruption that president Xi Jinping (pictured) initiated in 2012, and is the largest of its kind in the history of communist China.

The fact that the Chinese police who abducted Xiao were in fact operating illegally in Hong Kong would seem neither here nor there. The former British colony’s own mini-constitution only permits the Hong Kong police to operate within the territory, and mainland Chinese police have no jurisdiction there. The fact that these two plain-clothed Chinese police officers appear to have taken one of the country’s wealthiest, most influential, well connected individuals, a person apparently loyal to the “party,” from his own luxury apartment at the Four Seasons in Hong Kong in broad daylight will no-doubt have sent shockwaves through China’s wealthy elite.

The “Chinese Booksellers” Case

Between October and December of 2015, five Chinese-born booksellers, all employed by Causeway Bay Books but living and working in different locations, disappeared. Three of them had been in mainland China, one was in Hong Kong, one in Thailand, when they were abducted by Chinese secret police. The Chinese government released a statement two months later that the men were in custody, but were vague as to why. Speculation arose that the reason for their internment was based on the men selling books that were classed as anti-communist.

The case soon drew international condemnation, and some eight months later, the men were released one by one, each claiming deep remorse for their actions. However the fact that the men had been snatched from seemingly “safe” areas like Hong Kong and Thailand, and then held in such secrecy drew derision from many quarters, and did little to improve upon China’s already deeply tarnished human rights record.

Big Brother Is Watching!

While China has undoubtedly made considerable steps toward improving on its horrendous history of human rights, and current president Xi Jinping professes to be the humane and liberal leader in its history, it is clear that the country still has one foot very much in the past. China continues to be a police state, and one in which even the most wealthy, most powerful and best connected can still be taken without formal charge, even on land outside of Chinese jurisdiction, imprisoned and held at the complete mercy of the authorities.

There is no sign of this threat going away anytime soon. It’s no secret that the Chinese government is developing an e-database that will be called the Social Credit System, and will be able to provide instant, in-depth reports and personal ratings on every one of the country’s 1.3 billion citizens by 2020. Every available detail on an individual will be included on the database, including whether they pay their bills on time, are late with their library books, have cheated on school exams, break traffic laws or adhere to the Chinese birth control regulations.

With this attitude toward its citizens it’s not surprising that China continues to leak both money and manpower annually at an increasingly epidemic rate. It is estimated that as much as $500 billion in funds that could be reinvested into China instead finds its way to the West each year, where it is used to purchase everything from businesses, mansions, football teams, private jets, children’s high-end education, with the remnants stashed in offshore bank accounts.

Each year tens of thousands of wealthy Chinese choose to leave their country for a safer life in Europe, North America or Australasia, to name just three destinations. More than 100,000 Chinese millionaires have descended upon the Canadian city of Vancouver in a little more than a decade. The USA hands out 10,000 EB-5 investor visas annually, many of which lead to green cards for successful applicants. Already the bulk of these are acquired by Chinese investors. Almost every citizenship by investment or foreign investor visa program operated by any nation on the globe will receive the bulk of its applicants from China.

If You Have It, Use It!

In retrospect, Xiao Jianhua is quite possibly sitting in his cell right now, wishing that he had capitalized on his Canadian or Caribbean citizenship and set up home in one of those locations. Surely, it would have been virtually impossible for the Chinese secret police to nab Xiao in Vancouver or Antigua and Barbuda than it was to simply cross the border and grab him at the Four Seasons in Hong Kong.

The moral of this story is that if you are a wealthy Chinese individual who is considering acquiring second citizenship, or is fortunate enough to already be the owner of a second passport, you need to ask yourself this question: “Is remaining in China and increasing my wealth really worth the risk of imprisonment and potentially losing my fortune and even my liberty?”

Surely for any individual that believes this could indeed be a factor in their lives at some point, it’s a no-brainer to quit while they are ahead and enjoy a new life in a safe, democratic country, a country where they are not always subconsciously waiting for that knock at the door…