Latest news with #BaoFan
Epoch Times
3 hours ago
- Business
- Epoch Times
Prominent Chinese Investment Banker Reappears After Disappearing for 2 Years
China's 'M&A King' Bao Fan has resurfaced nearly 30 months after his sudden disappearance in February 2023. Multiple independent sources confirmed to Chinese financial outlet Caixin that Bao was recently released from official custody. At the time he vanished, Bao was one of China's most influential and well-connected dealmakers, having played a central role in many of the country's most prominent mergers and acquisitions. His disappearance sent shockwaves through China's finance and tech sectors.
Epoch Times
6 hours ago
- Business
- Epoch Times
China's Disappearing CEOs and the Flaw of ‘State Capitalism'
Bao Fan, founder, chairman, and CEO of China Renaissance Group, an investment bank led by one of the country's most famed rainmakers, holds a news conference on its IPO in Hong Kong on Sept. 13, 2018. Bao Fan, founder, chairman, and CEO of China Renaissance Group, an investment bank led by one of the country's most famed rainmakers, holds a news conference on its IPO in Hong Kong on Sept. 13, 2018. Bobby Yip/Reuters Commentary Imagine you are working as an investment banker in one of China's most famous companies. Everything is going well—a high-paying job, good social status, and finally, you're making money from the math you learned in university. Then, suddenly, your CEO disappears! This is what happened in China. Bao Fan, a Chinese billionaire and chief executive of China Renaissance Holdings, went missing in February 2023. A year later, news came out that he had resigned from all roles at his firm. Still, no one knows where he is. This is not a unique event—it is part of a larger phenomenon: the disappearing Chinese CEOs. Story continues below advertisement 'The Machine Refused to Obey' The mixture of capitalism and socialism is not new. The Economist published an article titled ' The Case of China's Vanishing Chairmen .' Losing contact with chief executives has become a common theme in China. Two listed Chinese companies announced in November 2023 that 'their chairmen had vanished without a trace.' They tried to reach them via WeChat and contacted family members, but with no success. There's an interesting pattern: executives most often disappear from firms with high levels of debt. This phenomenon of disappearing CEOs reveals something deeper. It's not just a tactic of the Communist Party; it exposes an inherent flaw in the Chinese mixture of capitalism and socialism is not new. Though with different characteristics, Lenin tried state capitalism as well. After the enormous failures of his War Communism policies (7,196 percent inflation in 1922, just to name one), he launched the New Economic Policy (NEP). And from the beginning, he noticed the problems of state capitalism. 'The machine refused to obey the hand that guided it .... It was like a car that was going not in the direction the driver desired, but in the direction someone else desired—as if it were being driven by some mysterious, lawless hand, God knows whose, perhaps of a profiteer, or of a private capitalist, or of both.' It wasn't a lawless hand; it was the invisible hand. Lenin's subtle but profound amazement reveals the flaw in the Chinese model: the machine refuses to obey the party that guided it. The Internal Contradictions of State Capitalism The term internal contradiction is mostly used in Marxist literature, but it's well-suited to explain what's happening in China and other state capitalist countries. There's an inherent paradox in the Chinese model—after a while, the vague distinction between market and state stops working. One of Xi's favorite sectors is the public-private partnerships: firms that aren't fully state-owned or privately owned, but a mixture. In theory, they aim to capture the productivity and efficiency of the free market, but at the same time, they resist the mission-indirection that is inherent to market processes. Story continues below advertisement This is the core contradiction. The productivity and efficiency of the private sector are possible only through risk-taking—betting on an unknowable future. That's why Frank Knight argued that entrepreneurial action is tragic at heart—it is uncertainty. And the sad truth is: most entrepreneurs fail. According to the US Bureau of Labor Statistics, 49 percent of new businesses fail in their first five years. But this failure is as important as success. It's what makes economic growth possible. As Ludwig von Mises wrote , 'It is profit and loss that force the capitalists to employ their capital for the best possible service to the consumers.' Without loss, there is no discovery. Without discovery, there is no innovation. The Future of State Capitalism Although the Chinese model is showing its weaknesses—from vanishing CEOs to The 'loss' part is what guides us. But the Chinese model—and all state capitalist models—seek to eliminate loss, through regulation or planners' 'wisdom.' They want an economic system that doesn't fail. But what we get is the vanishing of CEOs and chairmen. The internal uncertainty embodied in the market cannot be solved with government regulation and planning. Uncertainty should be embraced rather than tamed, because it deals with known unknowns and unknown unknowns. Only epistemological humility can help us navigate it, not attempts to play the Chinese model is showing its weaknesses—from vanishing CEOs to shrinking growth —it seems the world is moving toward state capitalism. As Ilias Alami and Adam Dixon argue in their book ' The Spectre of State Capitalism ,' this is a global phenomenon, not confined to China and Asia. Since 2000, the scales of the mixed economy have tilted toward the state. The number of state-owned enterprises (SOEs) among the world's 2,000 largest firms has doubled over that period. These state-linked giants now control $45 trillion in assets—half of global GDP. And it's not only SOEs. The number of sovereign wealth funds (SWFs) has increased sixfold in the past two decades. As of 2024, 176 sovereign wealth funds operate worldwide. By 2023 figures, they control $11.8 trillion in assets—more than any hedge fund in the world. The world is drifting toward greater statism—a trend that is far from new. As Milton Friedman put it in one of his final speeches 'After the fall of communism, everybody in the world agreed that socialism was a failure. Everybody in the world, more or less, agreed that capitalism was a success. And every capitalist country in the world apparently deduced from that what the West needed was more socialism.' Story continues below advertisement His remark captures the irony of our time: even in victory, capitalism is retreating. The double-digit inflation of the COVID era, the productivity puzzle in the West, shrinking growth, and vanishing CEOs in the East are all signs of the failure of the state capitalist model. But we can't overcome this new statism until we change the climate of opinion. The challenge is that this model is portrayed as 'neoliberalism' or 'capitalism.' At least with postwar statism, everyone agreed it was statism. But not this time. If you read the so-called critiques of neoliberalism, it sounds like we are living in Nozick's Utopia—but we're not. The evidence is quite clear, and we must understand this new statism in order to overcome it.
ABC News
2 days ago
- Business
- ABC News
Chinese tech financier Bao Fan released after probe, says former colleague
Chinese tech financier and banker Bao Fan has been released by Chinese authorities after vanishing from public view more than two years ago while "cooperating" with an investigation, a former colleague told AFP. Mr Bao was a key player in the emergence of some of China's biggest tech giants and was involved in high-profile deals, including the mergers of ride-hailing firms Didi and its top rival Kuaidi Dache, food delivery giants Meituan and Dianping, and travel platforms Ctrip and Qunar. He went missing in February 2023 with little explanation and was one of several high-profile disappearances in China amid a sweeping anti-corruption campaign spearheaded by President Xi Jinping. His disappearance rattled professionals in the financial industry as Beijing pressed its campaign to rein in the "lavish lifestyle" of the "financial elite". In February 2024, Mr Bao's investment bank, China Renaissance, said he had stepped down as head. His former colleague, speaking to AFP on condition of anonymity, said he remained in contact with the boutique bank and could confirm Mr Bao had been released, as first reported by financial media outlet Caixin. Mr Bao, who previously worked at Credit Suisse and Morgan Stanley, was known for his close ties with the country's top tech bosses and was seen as a celebrity in venture capital circles. His release comes as China seeks to boost confidence in the private sector, which has been reeling from weak domestic consumption and a prolonged debt crisis in the property sector, against a broader backdrop of heightened trade tensions with the United States. "This is certainly a positive signal, as Bao was the most high-profile financier detained in recent years," said Christopher Beddor, deputy China research director of Gavekal Dragonomics. "Still, it won't change the fact that the anti-corruption campaign continues to churn through the financial sector, and the common prosperity campaign has led to sweeping pay caps and even clawbacks," said Mr Beddor. Mr Bao's disappearance — and China Renaissance's subsequent announcement that he was "cooperating in an investigation being carried out by certain authorities" — sent shock waves throughout the financial services industry. Trade in China Renaissance shares was suspended in April 2023 after the bank delayed publication of its audited annual results, after Mr Bao was detained. Sources have previously told Reuters that he was taken away to assist in an investigation into a former colleague. Chinese authorities never formally announced the scope of the investigation. Mr Bao is one of many influential figures in business, entertainment, and sporting sectors who have disappeared with minimal explanation. In 2020, Alibaba's founder Jack Ma disappeared for three months after giving a controversial speech before reappearing at a charity event, and his company was fined $US2.8 billion Business tycoon Ren Zhiqiang, who criticised Chinese President Xi Jinping's response to COVID-19, was also jailed for 18 years. In recent months, top military officials and high-ranking ministers have also been purged from President Xi's cabinet, amid factional politics. ABC/AFP/Reuters
Economic Times
2 days ago
- Business
- Economic Times
Chinese tech financier released after probe: former colleague
Synopsis Chinese tech financier Bao Fan has been released by Chinese authorities after vanishing from public view over two years ago while "cooperating"Saturday. His disappearance -- and China Renaissance's subsequent announcement that he was "cooperating in an investigation being carried out by certain authorities" -- sent shockwaves throughout the financial services industry.
Time of India
2 days ago
- Business
- Time of India
Chinese tech financier released after probe: former colleague
Synopsis Chinese tech financier Bao Fan has been released by Chinese authorities after vanishing from public view over two years ago while "cooperating"Saturday. His disappearance -- and China Renaissance's subsequent announcement that he was "cooperating in an investigation being carried out by certain authorities" -- sent shockwaves throughout the financial services industry.
