In American 10-K’s, US companies have to disclose risks, include many that are somewhat farfetched. I have never read an American 10-K risk section that said “Our CEO may do something to irritate the government and be whisked away and not seen for a while.”
This is a problem for China. If you are a very successful business, you are a potential threat to the government, which wants to hold all the power. Companies that grow wealth and hire increasing number of employees become powerful. It is at the peak of their success that the political risks are highest, and if the CEO says anything critical of government policies, this can result in big problems, up to and including arrest and sudden disappearance. A Chinese Elon Musk would have gone to prison long ago.
The leadership of China is insecure, and with good reason. There are 1.4 billion people in China. The Communist Party is trying to control around 1 in every 6 people on the planet. It is trying to do that at the same time that it is becoming very aggressive militarily. The Communist Party has a math problem. It is trying to control a nation of 1.4 billion with an active-duty military of 2 million. If it tries to invade Taiwan and gets involved in a war with the U.S., a lot of its military will be very busy fighting the world’s largest military, made up of the U.S. Army, Navy, Marines and Air Force. Not to mention what Taiwan will throw at an invasion force. So China’s planning has to take into consideration that at the moment it gets involved in a shooting war in the South China Sea and beyond the First Island Chain, it may have sudden outbreaks of domestic unrest. There are 1.5 million police, and they would have to deal with this unrest, because the military would be otherwise engaged.
But that assumes that the police are going to shoot at their neighbors, which is uncertain.
So when Iook at CEOs disappearing, I think about the challenges of running a police state while trying to throw your weight around internationally. It is a difficult proposition, and people shouldn’t underestimate how difficult.