Self-made billionaire's rags-to-riches story began in impoverished China
CHINESE-CANADIAN VANISHED IN 2017
The disappearance in 2017 of Chinese-canadian billionaire Xiao (James) Jianhua was nothing if not dramatic.
Evading a phalanx of female body guards, five Chinese security officers managed to penetrate his inner sanctum at a Hong Kong luxury hotel and spirit Xiao away in a wheelchair, media accounts at the time suggested.
He has not been seen in public since, his name emerging only this week with news that he was being tried in mainland China on undisclosed charges. Canadian diplomats were barred from attending their citizen's hearing.
But the businessman's extraordinary “abduction” by Chinese authorities is just the latest chapter in a ragsto-riches saga full of twists and turns.
Emerging from impoverished rural China, a teenage Xiao won a place at the prestigious Peking University, becoming the student union leader as many of his colleagues took part in 1989's Tiananmen Square protests. Yet he declined to participate himself and grew disenchanted with the movement, before it was brutally crushed by the Chinese military.
After graduation, Xiao embraced the market-oriented reforms that would transform China's economy and built a business powerhouse. By the time of his arrest, his net worth was estimated at US$6 billion.
His fortune was built in the financial sector, with some reports suggesting he often did deals with members of the country's political elite, including the sister and brother-in-law of current President Xi Jinping.
Xiao, though, credits investment-guru Warren Buffett's philosophy for his success.
He became a Canadian citizen in 2008 — his family now lives in Toronto — and somewhere along the way ran afoul of that same Chinese power structure.
Secrecy surrounds the trial Monday in China's opaque court system. But Guy Saint-jacques, who was ambassador to China when Xiao was snatched, suggested he's a victim of Xi's campaign against some of the country's wealthiest business people.
“As you know, China started to crack down on wealthy private entrepreneurs,” he said, “because they were concerned they were getting too influential.”
Xiao's wife Hellen and two children, and a brotherin-law and sister-in-law all live in Toronto, said Saintjacques. A representative for the family said they would not comment at this point.
The business tycoon has been media-shy throughout his career, leaving relatively few footprints.
But it's known he grew up in a farming village in the mountainous province of Shandong, the son of a teacher and his wife, and won entry to Peking University at the precocious age of 14.
He later became head of the school's official student union, but as many of the university's student body joined the historic protests in Tiananmen Square, he chose not to participate. A 2014 New York Times profile suggested that his stance on the doomed demonstrations was later rewarded by the university and the party as he started his business career.
But a spokeswoman for his Tomorrow Group strongly refuted that narrative.
“Mr. Xiao was only 18 years old in 1989. At that time, facing the complicated event, (he) and the University used their best efforts trying to procure the students' activities to be in compliance with the law and to avoid tragedy,” said a 2014 statement. “However, when some students' actions became more and more aggressive, Mr. Xiao felt powerless and he switched to the library and concentrated on study.”
He earned a law degree from Peking University, but his first business venture was as a reseller in Beijing for Dell, HP and other computers.
“After studying Mr. Warren Buffett's business philosophy, Mr. Xiao thought that engaging in business might be more suitable for his character,” said the 2014 statement. “From then on, Mr. Xiao completely kept himself away from politics and focused on business and investment.”
From selling computers, his business turned to finance, with the Tomorrow Group eventually owning brokerages, trust companies and insurers.
The Times suggested the investment deals often involved members of China's Communist elite and cited the sale of assets by Qi Qiaoqiao — Xi's sister — and her husband to a company co-founded by Xiao. But the Tomorrow Group said it no longer had any links to the firm that bought the sister's shares in the Qinchuan Dadi Investment Company and had no dealings with her.
Nevertheless, Xiao eventually put some distance between him and China.
The family moved to Canada in 2005 and three years later Xiao became a Canadian citizen, said Saintjacques. Meanwhile, he ran the Tomorrow Group from a suite of rooms at the Four Seasons Hotel in Hong Kong.
They came for Xiao anyway in January 2017.
“It was clearly an abduction that took place in the middle of the night,” says Saint-jacques.
The embassy immediately asked for access to Xiao but China refused, indicating “they don't recognize his Canadian citizenship,” says the former ambassador.
In the years since, Xiao has been held under house arrest, mostly in Shanghai, as his wife “got a few irregular phone calls from him,” said Saint-jacques.
Hints as to why he had been targeted came later, amid concerns about excessively debt-fuelled economic growth.
The government seized Baoshang Bank and several other companies controlled by Tomorrow in 2019 and 2020, claiming legal violations. Tomorrow called the moves unnecessary. Saintjacques says Boashang had the resources to address concerns but never had a chance to prove itself.
Meanwhile, Xiao's legal ordeal continues to unfold with a level of secrecy that is arguably unusual even for China's shuttered system. Could that be due to what the Canadian knows about the country's bosses and their financial dealings?
“It is possible,” said the former ambassador. “Almost all Chinese leaders have been associated with dubious business deals.”