The still unresolved disappearance of billionaire Xiao Jianhua from Hong Kong has sent shivers among the financial elite. Right-fully so, says political analyst Victor Shih to Today. China´s central government wants to show who is in charge.
On the economic front, the implications are less clear. While confidence in the city could be shaken, talk of capital flight from Hong Kong might be premature, experts say.
The timing of Mr Xiao’s case ahead of a major party congress later this year suggests an attempt by China to pre-empt any surprises during the meeting.
“Observers like myself had thought Mr Xiao would be safe because he conducted transactions for multiple political elites in China, which is a good hedging strategy,” Associate Professor Victor Shih of the University of California, San Diego told the Financial Times.
“If he does not resurface soon, then this hedging strategy will be shown to no longer be a foolproof way of protecting oneself,” noted the expert in Chinese political economy.
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