© 2023 Milwaukee Public Media is a service of UW-Milwaukee's College of Letters & Science
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Chinese Businessman Disappears


Police in Beijing detained one of China's best-known business tycoons. That's according to a Chinese media report. Wu Xiaohui runs a giant Chinese insurance company called Anbang. Its holdings include the Waldorf Astoria Hotel in New York City. Wu made headlines last fall when he came close to doing a big real estate deal with President Trump's son-in-law, Jared Kushner, or rather with his family. NPR's Rob Schmitz joins us from Shanghai. Hi, Rob.

ROB SCHMITZ, BYLINE: Good morning, Steve.

INSKEEP: So who is Wu Xiaohui?

SCHMITZ: Well, Wu Xiaohui is one of the best-connected businessmen in China. He's married to the granddaughter of Deng Xiaoping, one of China's most important leaders. And Wu has used these connections to earn the trust of both China's elite and the elite in the U.S. as well.

Anbang, his company, on paper is one of China's largest insurance companies. It's worth $300 billion. But here's the thing - it doesn't really function as an insurance company. What it actually does is use insurance policies as vehicles to raise money for investors. And it does this by moving much of its money to places like the U.S., where it invests in assets like luxury hotels. And as it does this, Wu Xiaohui, Anbang's chairman, is doing deals with people like Stephen Schwarzman, the CEO of the Blackstone Group and one of President Trump's closest advisers. And he's come close to making a deal with Jared Kushner, President Trump's son-in-law.

INSKEEP: Well, those kinds of connections would seem to protect a businessman. But was it something about his business model that drew him to the attention of Chinese authorities?

SCHMITZ: It's hard to say. You know, we learned today that Wu was arrested by a special government unit investigating economic crimes, but it's unclear why. One theory is that Anbang's investments and its business model have been deemed either illegal or too risky by Beijing, and much of the company's money comes from China's new middle class. And the company promises incredible rates of return that are simply too good to be true, and this is putting a lot of people's hard-earned money and pensions at great risk. And this kind of behavior is the last thing that Beijing needs right now.

China's government is in the midst of trying to create a more stable, more market-based economy that's more highly regulated. And it's possible that Anbang's investment products, which were sort of going gangbusters during a time when China's economy was more freewheeling, have now essentially become illegal. And maybe Beijing wants to make an example out of Anbang to warn other companies. That's the first theory about what's going on. And I ran this explanation past Christopher Balding, who teaches economics at Peking University. And here's what he said.

CHRISTOPHER BALDING: So many companies are doing the exact same thing that Anbang has done. And because so many companies have had their wrists slapped in the same way that Anbang has done, what is something, as a business practice, that Anbang has done that is so different from others that warrants essentially arresting this guy?

INSKEEP: OK. Let's pose that question - what makes Anbang bad in Chinese terms?

SCHMITZ: Well, this brings us back to Wu's political connections. Anbang moves a lot of money out of China. It's possible that Anbang was moving corrupt money out of China, perhaps money from families of high-level politicians. And that sort of activity is in the crosshairs of President Xi Jinping's anti-corruption campaign. You know, this is an important year for China's president. At the end of this year, there will be a party congress where Xi is going to consolidate his power. And in the run-up to that event, he's not going to want any surprises.

So what's interesting here is that Wu's reported detention is the latest in a series of detentions of other well-connected tycoons in China. Some were let go after a period of questioning. Others are still missing. So what's becoming clear is that if you're a well-connected tycoon in China, you might want to watch yourself.

INSKEEP: Message being sent, maybe, to other tycoons. Rob, thanks very much.

SCHMITZ: Thanks, Steve.

INSKEEP: That's NPR's Rob Schmitz in Shanghai on news that a Chinese business tycoon has apparently been arrested.

(SOUNDBITE OF E.S. POSTHUMUS' "NARA") Transcript provided by NPR, Copyright NPR.

Rob Schmitz is NPR's international correspondent based in Berlin, where he covers the human stories of a vast region reckoning with its past while it tries to guide the world toward a brighter future. From his base in the heart of Europe, Schmitz has covered Germany's levelheaded management of the COVID-19 pandemic, the rise of right-wing nationalist politics in Poland and creeping Chinese government influence inside the Czech Republic.