FINANCE: Fosun’s Guo Shows Up at Annual Beijing Political Bash

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Bottom line: Guo Guangchang’s appearance at this year’s meeting of China’s legislature is a positive signal for Fosun investors, designed to ease their concerns that he might be in danger of arrest as part of an anti-corruption probe. 

Fosun chief Guo attends annual Beijing political pow-wow

Local media are buzzing today with the latest thoughts from some of China’s biggest corporate leaders, many of whom are attending a big meeting in Beijing connected to the annual meeting of China’s legislature. But among all the chatter taking place on the pow-wow’s sidelines, the most interesting tidbit among companies I follow is the mere presence of Guo Guangchang, head of the massive Fosun conglomerate.

Guo’s appearance at the Chinese People’s Political Consultative Conference (CPPCC) would normally be a non-event, since he’s an official member of this group that provides advice to Chinese lawmakers. But Guo was in far more sinister headlines back in December, when he disappeared for a few days under murky circumstances and later said he was assisting in an unspecified government investigation. (previous post)

Thus there seems to be some added significance to Guo’s appearance at this year’s CPPCC, which will be followed shortly by the annual meeting  of the National People’s Congress, China’s legislature. Both meetings are hugely important to the ruling Communist Party, since it typically lays out its agenda for the year to come and the occasion is a chance for business and political leaders to show their faces and look authoritative.

In that light, it would appear that Guo’s appearance at this year’s event is probably a signal that perhaps he isn’t in danger of imminent arrest for corruption, which is what many had feared at the time of his disappearance in December. Before we go any further, let’s take a look at what Guo did and actually said, and also look briefly at some of the other business leaders I follow who were chatting at this year’s CPPCC meeting.

We’ll begin with Guo, who was talking up his ideas on building up China’s “smart economy”. (Chinese article) Guo and other CPPCC delegates are tasked with providing suggestions to the Chinese legislature each year on new steps it can take to improve the country. In this instance Guo’s suggestions involved his ideas on ways to improve information infrastructure to let companies make better-informed decisions.

Two other corporate giants I follow who were also at the meeting were Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) chiefs Pony Ma and Robin Li. Ma was talking up his own plans on how to improve Internet access (English article; Chinese article), while Baidu’s Li was eager to talk about his own vision of a China with driverless cars. (English article; Chinese article)

Empty Words

Personally speaking I don’t find most of the things that business leaders say at this meeting that interesting, since many of the ideas are quite abstract and broad and simply repeat things they’ve said in the past. The main reason most leaders attend is simply for the prestige factor, and it’s probably fair to say that the Communist Party carefully considers who will be allowed to attend the meetings each year.

All of that brings us back to the point I raised at the outset of this post, namely the level of significance we should attach to Guo’s attendance at this year’s meeting. It’s probably fair to say that Guo fought hard to receive an invitation to this year’s conference due to the recent controversy, even though in the past he would have received such an invitation automatically.

He and everyone else in attendance knows that only people in good standing with the Communist Party leadership are usually invited to attend. Thus many would interpret his attendance as a sign that he isn’t in danger of getting caught up in one of the many corruption investigations that have been sweeping China over the last 2 years. If I were a shareholder in one of Fosun’s many listed companies, I would indeed be reassured by Guo’s attendance at the meeting, though I wouldn’t completely dismiss the possibility that he could still get in trouble later.

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