Vanished by China: One Couple’s Story
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Desmond, in 2017, your ex-wife and the mother of your child, she disappeared in China without a trace. And then four years later, on the eve of the publication of your book, Red Roulette, she suddenly, out of nowhere, called your phone. What did she say? So, you know, she spent the first 10 minutes on the phone with my, with our son. I'm Barry Weiss. This is Honestly. And today, we start with a phone call.

You know, it's a touching moment. I mean, she asked him, how tall are you now? What's your weight? You know, how are you doing in school? And then she asked me to speak with me separately afterward. And then essentially she's asking me to stop publishing the book. And what did she tell you about where she was? She told me first off, she said she signed a paper of temporary release. So she said they can take her back any time.

they can bring her back into disappearance if we don't comply with what they demand. What did you say back to her? I said, you know, I can't stop it now. In my mind, it's like this is some stupid, crazy bureaucrats, you know, thinking the rest of the world operates the same as China. You know, in China, at the snap of a finger, the government can take down any book across bookstores, across country, across entire China overnight.

But she called me. We talked on Sunday morning. The book comes out on Tuesday. I'm sure the book's already in the bookstore or on the way to bookstore. The bookstore had purchased the books. You know, even I want to record it. I couldn't have done it. You know, not that I wish to. So on the eve of publishing this book that is exposing the sort of beating heart of the Chinese Communist Party, suddenly you hear from your ex-wife and she basically says to you,

They've let me out for the first time in four years. But if you publish this book, they could re-disappear me. Is that what you're saying? Essentially, that's what she's saying. Did she sound like herself, or did it sound like she was reading from a script? It sounds like herself, you know, but I challenged her in the court. I was like, you know, your phone line went dead for four years. I mean, her mom passed away back in June.

She wasn't aware of it. She told me herself on the call, she said she had no news from the outside world over the last four years. So I said, well, okay, your phone line went dead for four years. And then on the eve of my publication, your phone all of a sudden went live. You can now call anybody anywhere in the world. That's just not real, right? Unless that's the government, the CCP behind you is acting and directing you.

Did she say anything about the safety of you or your son? Yeah, she said, if you go forward with this project, think of what may happen to our son if something happened to you. And then she followed up the question, think of how will you feel if something happened to our son. I take that as blatant threats. How did the conversation end, and what did you do after you hung up the phone? I...

I told her that's nothing I can do. The book is going to go publish. And then she basically said, you know, think again, you know, and put some serious thought into it. And then that was the end of the conversation. And then she go back again and give me all this party slogans of the CCP, right? You know, it's like, you should love your motherland. You should slander your country. You should slander, you know, the hand that feeds you, you know, all those slogans.

typical and then CCP propaganda slogan. What did your son say after the call? What kind of questions did he have for you? I think he's kind of bewildered, you know. I think the biggest thing for him is really a load off his shoulder, like knowing his mom is alive. Because the most difficult part of the last four years for him was

is, you know, at that age, you know, every storybook you read is telling you your mom is the most important person in your life. And all of a sudden, she got disappeared. You know, when she first went missing, her question was, you know, did I do something wrong? You know, why should she stop calling me? Why should she disappear on me? Right. And then we explained it to her and all that. And over time, it's the question of, you know, whether she's alive.

you know, if we are sure she has passed away, you know, you're trying to remember the good thing about her and you move on with life. But sort of in this no man's land, you know, not knowing she's alive, not even knowing whether she's alive or dead, that makes it very difficult because your mind playing game with you, you always wonder, right, is she alive, is she dead? How is she doing? Are they torturing her? Or what is happening to her? That's the difficult part, I think, for all of us to deal with, and particularly, I think, for my son.

If the story of Desmond's ex-wife, Whitney Duan, sounds familiar to you, it's because unexplained disappearances happen regularly in China. They have abducted booksellers, professors, scientists, students, doctors.

Most recently, where is tennis icon Peng Shuai? Is she OK? You may have seen the story of tennis star Peng Shuai. A household name in China, Peng has not been seen in public since November 2nd. Back in early November, the three-time Olympian accused a high-ranking public official of sexual assault on Chinese social media. Then Peng was gone.

She disappeared from public life for weeks, only to reemerge in what looked like highly staged appearances. And so today, I'm talking to Desmond Shum about how all of this happens.

How did he and his then-wife go from being close allies of the elite of the Chinese Communist Party, leveraging these important relationships and business to make roughly $3 billion, to being casualties of the party's everlasting crackdowns and purges? Where is Whitney Duan? And why has she been held by the party without any official charges for nearly four years? We'll be right back.

Hey guys, Josh Hammer here, the host of America on Trial with Josh Hammer, a podcast for the First Podcast Network. Look, there are a lot of shows out there that are explaining the political news cycle, what's happening on the Hill, the this, the that.

There are no other shows that are cutting straight to the point when it comes to the unprecedented lawfare debilitating and affecting the 2024 presidential election. We do all of that every single day right here on America on Trial with Josh Hammer. Subscribe and download your episodes wherever you get your podcasts. It's America on Trial with Josh Hammer. Desmond, I want to go back to the beginning and hear about what it was like to grow up in China under the Communist Party.

Let's start with your family background. Tell me a little bit about your parents and your grandparents. My grandfather was a lawyer before the Communist Party took over China, you know, back in 1949. After they have taken over time, you know, they categorize, you know, the Communist Party categorize people in different categories. And then because his background being a lawyer, being an intellectual, he is categorized into what they call a black five categories category.

And then once you get categorized into that category, your entire family have different treatments. My father, he cannot go to better schools despite whatever grade you get. He cannot go to university whatever grade you get. So he ended up going to a teacher's training school and become a teacher in a middle school. So it's like a caste system.

Yes. But the cast is your entire family. It's not one person. Anybody who has direct bloodline related to you, you are into that category and into that cast.

You spent, and you write about this in your book, the earliest years of your life in a small section of your grandfather's old house in Shanghai that the state allotted to your family. Explain to me why that happened and maybe tell us a little bit about your memories of that early period of your life.

What happened was that they used to own a townhouse right in the center of the city of Shanghai. And once the Cultural Revolution happened, you get cast into that Black Five category. They were driven, my grandfather and the family were driven away out of Shanghai. And their house essentially got confiscated. So it's like a three-story building. And then you have

they just moved two other families into their house. And then so we have three families living in that building, sharing one bathroom and sharing one kitchen. And you know, it's looking back, you say, well, it's an uncomfortable situation. But as a kid, you know, I don't realize that's uncomfortable. It's just the way of life, right?

Right, but it's me imagining that the government comes to my house today, says, no, no, no, you're not going to be a lawyer anymore. In fact, we are going to recast you. You're only going to be allowed in these professions. And this house, which has been in your family, you're only allowed to live in the attic now. And we're going to have two other families in your house with you. Got it? I mean, that's really, that's what happened, right? Yeah. So this was all you knew growing up.

What was the attitude in your family toward China and toward the CCP growing up? I think at that period of time, you don't talk politics. I mean, the parents would never talk politics with the children because they are afraid that the children may accidentally spill something over in school.

And that will come back to haunt them. The teacher, you know, is teacher or somebody, you know, get word of it, get wing of it. And then they actually come back and prosecute it because you have bad mouth the party or bad mouth the state. So the parents never taught politics with the kids. In order to protect their children. And protect themselves. And protect themselves, yeah. Because the school actually actively asked you to report and react on your parents. That was asked directly of you in school?

Yeah. I think in every class there is your textbook. Every textbook, there are sections about, you know, Chairman Mao, you know, indoctrinations of various sorts. And then you very often, in different classes, this kind of topic, when you just open a textbook, this kind of this right in front of you, and then you will have those topics come up from time to time. So in school, you're learning about how Mao is the greatest.

But you write in your book, you find out that your father always believed that the Communist Party was evil to its core. How did you discover his true feelings, given the fact that parents can't talk politics around their children for fear of getting found out? You know, you look at how they behave, right? I mean, my father trying to...

listen to, what's the radio VOA, Voice American, I think. Yes. You know, he would turn the dial of the radio, trying to listen in to the outside news. But at the same time, he would tune the volume really down, like, you know, essentially sticking your ear to the radio and trying to listen to it. And, you know, things like that.

So ultimately, your family moves to Hong Kong. Then you leave for the U.S. for your education. Yeah. And then you don't stay. You decide to go back to Hong Kong to join the growing business sector there. Why did you decide to go back? So my parents, many of their friends are entrepreneurs running small business doing China trades there.

So since I was a teenager in Hong Kong, you know, we were parents and they go out on the weekends, like they all group together and then they talk about, you know, whatever they're doing in the business world in China. And then my father...

He was the first employee for Tyson Foods in the Greater China region. He opened up their business in China. And then I actually, when I was in college, in the summer, I was helping out in his office. So very early on, I got a taste of what it's like doing China business.

As a teenager, in the summer vacation, I always go back to visit my grandma in Shanghai, visit my relatives in Shanghai. So I'm so familiar with what China is like. So when I was in college, I thought, you know, yeah, it seems like, you know, things are changing, seems like things are happening in China. And I thought that's probably the land that would give me the most opportunity.

So at 29, you go back to the mainland and you're working in Beijing. And where are you working at that time? When I first started work, I was, you know, traveling into China from Hong Kong. In 1997, yeah, about 28, 29, the company posted me up to Beijing. They have offices at the time in Shanghai and Beijing. And then I got this title called Chief Representative Beijing.

of the company chief rep. And yeah, so I moved from to Beijing and at that time, there's not many office building in China, you know, so we were setting up office in hotel rooms. Wow.

You mentioned it's 1997, and I think certainly my understanding when I think about what's going on in the mid-90s in China at that time, I'm thinking about a booming economy, incredible expansion. People are suddenly able to make money. Consumption is skyrocketing. And there's a lot of optimism about the opening of markets and how hopefully the democratization of markets is going to democratize politics and social life and culture.

Tell me a little bit about living in Beijing in your late 20s in this period. Is it the kind of thing where you're seeing skyscrapers start to go up? Like, what did life feel like in Beijing at the time?

I do feel like there's energy and optimism in the air being there. And, you know, things are happening incredibly fast, but it is a very, very early stage of economic development of China. You know, I remember at the time, you know, we were looking for investment opportunity and the private company that we can find, it's like if they have 2 million US in revenue in the 90s,

they're considered doing rather well. I mean, $2 million. I mean, today, you know, you're talking billions and billions. But at that time, if you're a private company, you have $2 million in revenue, you're considered doing rather well. I mean, so things really have changed. And what about in the years right before you met Whitney Duan, who'd soon become your wife? How successful had you become by then?

Jack Ma, the CEO of Alibaba.

Yeah, Jack Ma, the billion billionaire, the richest person of China today. You knew him when he was essentially, I mean this figuratively, but like building his business out of garage. Yeah, yeah, that was, I think, I believe, I met him first time in Hong Kong, 1998, I believe. He was first time coming out to raise money. And I have coffee with him in Hong Kong.

It's kind of interesting. He was rather cocky even back then. We were having coffee in Ritz Carlton Hotel and the window of the coffee shop actually can see the office building Goldman Sachs occupies. And then he said, "Oh, you know, Goldman Sachs promised to invest five million in my business and I didn't give them a business plan."

And then I want $3 million from you. And obviously, you're not going to get a business plan, right? And I was like, what the heck? What are you talking about? I'm going to explain to my back in the office, we are going to invest in this business.

Random guy in a company with no business plan. A random guy who even refused to give you a business plan, but he wants three million check from you. It's like, what is this? So, yeah, it was the early days and crazy days. And then

And then eventually we invested, we also invested actually at the time, I was involved, invested first company, tech company, quote unquote tech company. There was system integration building the internet network of China. And that was the first sort of quote unquote tech company listed in the NASDAQ. Wow. Back in the late 90s. Yeah. And then so things are really happening. And then, you know, I remember the company was listed IPO at $24 and, you know,

Like, at opening, it's trading over 100. Wow. You know, it's the middle of the night in Hong Kong, and then the partners of the firm are popping champagnes because they're, I think, I remember the counts, like every partner make like 8 million or 6 million just on that night. Wow. So even before you meet Whitney...

Things are happening for you. You're meeting with a jack ma before he's become a jack ma. You're popping bottles. You're part of this incredible meteoric rise that's happening in China. And then how do you meet Whitney? About year 2000, I quit the PE firm because I feel like I went on an entrepreneurial route by myself. I mean, I joined a company, a tech company, because I feel like

We in the investment world, we say we fly the wall 3,000 miles from the trenches. The entrepreneurs are the ones in the trenches. We are like 3,000 miles away, telescoping the wall 3,000 miles away. So I feel like I'm standing by the riverbank and the water flow just started running right past me and running so fast.

And as I, you know, the least I should do is jump in. So I decided to quit the firm in 2000 and then join the entrepreneurial rank. And it was in that context that we met. How did you meet her? And what did you think of her? Yeah, she, well, I was with a software company, a telecom software company. And at the time she was doing IBM mainframe machine and selling IBM mainframe machines to the China Telecom of the US.

of the time. And then, so we were talking about, you know, the two firms were talking about a possible merge because we have the software, you know, and then they have the, they sell the hardware and then we have the same group of clientele. And so we're talking about possible merge and then so a lot of discussion going back and forth with that. So that's how we met. And the first time I met was like, it's kind of weird. You know, it was,

I mean, these women, you know, first of all, there's not many CEOs or heads of companies who are women in China at that time. And then she always dressed in very expensive suits, like Chanel suits and all that.

You know, when they come in and then she start talking and she's always a talkative person, like the most talkative person of the room. And they always start to like, I think it's her habit or her, she wants to dominate that room. She always wants to do that. And then she, so that's how we met. And then, yeah, I mean, I just feel like she's coming from a very, very different world because, you know, it's not something someone or some sort of people I have dealt with in the past.

So from your book, it sounds like she was sort of an expert in dealing with party officials and military officers. And she sort of is the one who pulls back the curtain and reveals to you how business and politics in China really work. What kind of things did she reveal to you sort of early on in the first few years of your relationship that were surprising to you about how the system really operated that you didn't know before?

I think when we first made connection, the first thing that really surprised me and then really left me a strong, lasting impression was she's very sort of philosophical. You know, she reads a lot. And then when you talk to her, she's always essentially quoting like paragraph by paragraph of philosophers. What kind of philosophers? Chinese philosophers or Chinese?

Oh, Montesquieu and then Chinese philosopher, historical ones and the French ones. At that time, I was like, what the heck is going on? It seems like I'm so ignorant. Of course, over the years, I know that's the way you should dominate the room and that's the way you should leave an impression on people and dominate over people. And then obviously, you should drop hints of connections.

I mean, I was just fascinated. I was just like, you know, wow, you know, she's really a person from another world. You write in your book about how these connections that she was dropping hints about, these party connections, are a prerequisite to accomplishing anything in China. And you call this elite in-group, and I really like this phrase, the red aristocracy.

I want to understand who this red aristocracy is and what their lives look like. First of all, I think two things. The first thing is China, you know, whether you're running a corner store, convenience store on the street, or you're running a multi-billion dollar business, you always need political power association. Without political power support association, you cannot run any business. Even a bodega on the corner.

Yeah, even newspapers then. You need power, political power. You know, just this different rank of political power. And the red aristocrats are at the top of the food chain. They go to a different type of school. They have a completely different ecosystem of supplies. I mean, you know, in a communist time, food was in shortage. They have, even today, their farms, they just grow vegetables.

vegetables and support them, not to the market, not to anybody else, just for that. They have their own food supply chain. Wow. If you have a liquor, the top liquor, like Maotai, their liquor is produced just for them.

So they have like an entire ecosystem created just for them. They have their own medical care. The top hospitals will have a five-star wing. You only can go into it. And that's not by money. You only go in there by your ranking within the system.

So the red-arrow square is born into their world. Their privilege comes with their birthright. But how do they explain to themselves the total disconnection, the total hypocrisy between their public proclamations of communism and the way they actually live, which is this upper crust, immense wealth, totally disconnected from the average Chinese? How do they explain it?

That's the fascinating part of China. In China, everybody is living in different personality in different situation. Just look at my father. My father will be

Like, you know, in his school, being a second teacher in his secondary school, he was subservient, very well behaved, blah, blah, blah. But he come back, he would, you know, he would listen to Voice Radio, Voice America, you know, stick to the ear, trying to learn language, trying to say, well, how do I get out of China? Right. So you always play a different persona in different circumstances. Right.

And that's like everybody in China. And obviously the same with the Red Aristocrat, you know, they sing, you know, we are socialist state, we are common prosperity and all that. And then at the same time, they go to a different school, even the vegetables come from a different farm, you know. It's just the way the system is built. And who became your and Whitney's main connection in the Red Aristocracy?

So what did success look like for you guys? I mean, it seems like you guys were enormously successful. I think the first really...

big score was the Ping An Insurance. I mean, we invested in Ping An Insurance today. It's, I think, the first or second largest insurance company of China. We invest very early on. And when that was the time, you know, of China, like anything you buy, it will multiply with the economy. I remember back in 2000 and 2004,

I went to the auction, bought a couple of pieces of artwork, classic Chinese art for maybe like 300,000 US. And then at that time, it's already about the most expensive piece in the auction.

And then probably six, seven years later, the option house came back to us and said, well, can we buy those two pieces back from you for five million? I mean, you know, that's something we bought for three hundred thousand. The option house come back, not even an option, just say, well, can we buy it back from a family? And we did nothing on it. We just sit on it. So a lot of it is, you know, being at the right time and obviously make the right association. You get the right opportunities.

And this is happening, obviously, in a country that had experienced generations of just staggering poverty. Would anyone have been able to, you know, you point out just this tiny example of the two art pieces at auction, but I'm sure there are dozens of stories you could tell me like that. Could anyone achieve that level of success without pandering to the CCP? No. The party dominates the society, and then you do any kind of business, you have to be associated with the political power.

You write in your book about the lavish life that you lived with Whitney. You bought flashy cars, watches, art. You had a crazy wedding. But you also spent a lot of your money, it sounds like, on sort of feeding and nurturing your relationships. What did that look like? I think in our case, it's kind of unique. Well, it is very unique because we are associated with the number two politician of the country, right?

So every other politician is subservient to the situation in general, like to be in our favor. And then what they want from us is this, you know, they want association to the premier's family. And then we become one of the sort of the gatekeeper in that situation. And our relationship with the Wen family essentially is

different people bring different business opportunity to them. And then they ask us to, well, sit in, give me your opinion, what do you think? And then in a couple of cases, then we become the executioner. We know like the airport situation,

We actually do the execution and we're now to build a business and then they basically say what is. I used to usually call it the Air Force, the army on the ground. We had army on the ground taking, occupying the ground. They are sort of the army dropping bombs from time to time. People say, well, this is a powerful force because they have this air force hovering over them.

So despite the corruption that you yourself were witnessing on a daily basis, at the time it sounds like you remained optimistic about China. You write this in the book, "We had the impression that China was evolving in a positive direction. We saw how capitalists like us were becoming essential to its modernization. Entrepreneurs were creating most of the new jobs and much of the wealth. Sure, we read the criticism of the party in the Western press.

But we felt like we were living in a different country than the one depicted in the Washington Post or the New York Times. Whitney and I were convinced things were improving. And then everything sort of started to change when the CCP pivots. And it basically decides that people in your class, the business people, are too liberal and they're too westernized. And the party decides to sort of reassert its control and tighten its grip.

What does that change, that pivot look like in your life? In my life was, I think really, you know, the change really happened around the financial crisis in the 2000s. Before that, you know, everybody, we all believe China will be more like the West. The question is only the pace of the change we're going to, you know, we're going to embark on to be like the West.

I think financial crisis has really changed the viewpoint of the CCP. They all suddenly believe, they say, well, look at the West, they're all crumbling. So after that, they say, well, maybe our system is not that bad. We need to go our own way. In my own case, then we have a joint venture with a state-owned enterprise. We have a joint venture with the airport of Beijing.

And all of a sudden they start setting up party cells, communist party cells in my company. They send people to be the party secretary and that person sits on the senior management and meetings. He will make voices, opinion on everything. And I need to pacify him and reach a consensus in some way with him on all decisions.

And that immediately changes, obviously, the nature of the company. Yeah. You completely change the dynamics of the company. After the break, the Chinese Communist Party turns on Desmond and Whitney. Desmond flees the country and Whitney disappears. So in October 2012, there's this expose in The New York Times that details the immense wealth that belongs to the family of Wen Jiabao and

Obviously, you guys are implicated in this. Tell me about the fallout from that article in your business life and in your marriage. I think the article, first of all, you know,

That's two things I want to say first of all about their story. The first of all is the angle they printed and then they wrote the story. It's not right because what happened was we bought the stick in that company back in 2004, I think.

And as I said, we bought it at the same market price as three other buyers. It's not like we buy this thing at a depressed price compared to other people. And then what happened is that when we bought it, it wasn't a sure win. And then subsequently, Goldman Sachs was also investing in the company. They sold that stick because they think it's not worthy going on forward. But subsequently, obviously, the stock market and all that, we made money.

like 20 times on their investment. But it wasn't obvious when we first invested, it was just part of this entire China rise. So to print that as a corruption, I'm not sure that's, you know, that's, I mean, we put money into it and this thing become 20 times, you know, obviously the issue is this is the premier's family making hundreds of millions.

So that's the first thing. And second thing is their holding was over different layers of company, like three, I think at least three layers of different companies because they were trying to shield their identity from their holding. A foreign journalist has no way to dig through the Chinese bureaucracy to get through three layers of company to trace out who is actually the owner.

So what they find out, at least that's what I heard from them, the premier's family, the Wen family, is they have a political infighting. And then essentially, eventually took out Bo Xilai, which is one of the princelings, now today is still behind bar. And then his supporter in the intelligence apparatus handled a file to the New York Times journalist to print it. I know the New York Times journalist, and they handled a file in Hong Kong.

And then obviously the New York Times journalist gets subsequently put as a price and then he's denying that's how it happened. But there's no way foreign journalists were able to dig through three layers of ownership to get to the premier's family in China. That just doesn't happen. So that's how the story, that's about a story.

In our situation, it was a bombshell. It was a bombshell. I mean, because a story like that has never happened on the top political leader of China before. I mean, you always have hearsays, you have rumors. But in that story, essentially, the case was proven.

And a story like that just never happened. It was a bombshell. It was a bombshell. It essentially shattered our relationship with the Wen family and then put our marriage in, you know, because it's such a stressful situation on us. It was an exposed day like that just never happened before. And then we are in the, you know, we are in the bullseye of it.

So when this story comes out, your business relationship to the Red aristocracy through the Wen family is shattered. And as you say, it goes off like a bomb in your own family. It deteriorated your marriage, and it ultimately started you on a path of questioning your future in China. Yeah, with that story broke, I mean, you put our entire relationship in distress. Obviously, she was named, I wasn't really named in the article.

And then she thinks, you know, I'm not really being supportive of her. She's going through tremendous stress. And then she was also pregnant and all that. So our relationship sort of goes sideways. We subsequently divorced. And then when Xi Jinping comes in in 2012,

At first I thought, you know, what he's doing, you know, this quote-unquote anti-corruption drive, I thought he was doing the right thing. But very soon, I think two years into it, I mean, I was also sitting in there, they have this thing called Politic Consultative Conference, where supposedly you are like the upper house, you're like the upper house of the UK parliament system. I'm seeing...

the wind of the politics start changing everything's finally being written back the private enterprise are being pushed back the state enterprise the state economy is advancing at the expense of uh private companies and i feel the wind is changing and then i also have you know when i just had a divorce and all that outside maybe this is you know time to decamp

Earlier, you were talking about how everyone in China has different personas. They have different masks that they wear depending on the situation, including your own father, where he's meek at work as a school teacher and home, he's listening to VOA. Did you ever have the level of trust with your wife, the most intimate person in your life, where you could let the mask slip and be your truest self? Or did you not even have that in your own marriage?

I think in our marriage, we don't have a mask on per se. You know, we have a mask on when we deal with the outside world. Because, you know, when we deal with the wands, you know, despite that they are our closest partners in many things. But we, you know, just a different persona. We put on a different persona and they expect us to. But we, I think somehow we have a very intense competitive nature in our relationship. I think she always want to

prove herself is better than me in business. She always have worried that, you know, I'm going to go independent because I am, I'm going to build a business empire of my own without her. So we always this competitive nature in our relationship, which make the relationship always uneasy and unstable. When you decided to leave and you told Whitney that you were going to leave,

Did you try and convince her to leave also? Were you concerned about her safety at that point or not yet? I did tell her. I mean, I really think the nature of the situation in China is changing. And after I've done, you know, China for almost 20 years by that time business, I'm of the view that you never put all your chips on the table with China.

Because the ground is continuously shifting under your feet. What you do is you put a dollar on the table and you play the game and it becomes 10 in this situation in China, or 20. And then you basically sell it out. You take all the 20 off the table. You put another three or four or five onto it. And then you just roll the dice like that. Anybody continuously put all the chips on the table in China, my experience, and I've seen it happen like

time again and again, eventually they lost everything. And then so I am at the time I was telling her, sell it, sell everything in China and then take your money out of China. If you like China so much, you still believe that's a game to be played. Put some of their money back.

I remember I had a coffee with her in Hong Kong. This is exactly what I told her. And she gave me, she used this phrase in Chinese, which is saying that a person without foresight will have immediate worries. So she essentially saying, telling me that I don't have foresight. You know, I think she believes her political connection in China still works.

She has laid groundwork in preparation of the wins, going to retire. And then she laid groundwork to connect with other politicians of China's system, which she believes will carry her through over time and then reach another height. Of course, that isn't what happens. And you go to the U.K.,

And, you know, we've mentioned the term in this conversation. And you read it, you know, the idea of being disappeared. It's such a mysterious phrase. And I guess I want to know how you found out about her being disappeared because you're no longer in China. You're in the U.K. So what does it really mean? Is it just that one day she stops picking up the phone and then she never picks up again? How do you learn that she's disappeared? Yeah.

What happened is our son usually have a conversation like a video call usually with her, maybe a couple of times a week. And then all of a sudden her phone wasn't being picked up. And then we thought, you know, okay, maybe she's busy, you know, she has something else, but she never called back. And this go on for like, I think like a week plus. And then we thought that's kind of strange, you know. So we call her parents and then that's how we find out she has been disappeared.

And what do the parents say? Do they say she was taken off in a truck? Like, what is known about the circumstances of her disappearance? I think one day she walked out of the office and just vanished. Do you have any idea of what happened to her or where she's been kept? No. Nobody knows. I mean, her parents are even too afraid to go to the police. What do they do to disappeared people in China? What do you think has been happening to her for the past four years?

Yeah. What they usually do is you take into like a usually as like a three star hotel and they you are confined to a room. I mean, there's camera all around the room and then they will, you know, basically your 24 hour hours monitor. And then they will ask you write down, you know, things, write things down, you know, confess to your crime, you know, and then there were indoctrination works and, you know, all that.

You think about people that get disappeared in closed societies, and usually they're dissidents. Usually they're people who are outspoken critics of the regime. But she wasn't editing a secret newspaper. She wasn't trying to reform the government. She was just a successful businesswoman who used her connections to the party. So why do you think she was targeted? And what do you think they accused her of?

We were guessing, I mean, so we're like a few possibilities. One is we call it hostage taking against the Wen family. So the premier Wen was, you know,

He has his own brand in the Chinese political community, which is rather unusual because he's rather outspoken for universal value, which is actually a forbidden term. If you go on the Chinese internet, you type in universal value, it will come up blank. So he does advocate democracy. He says China should go the route of democracy, which no senior politician in China has spoken openly about it.

So it could be a hostage-taking against the Wen family. Say, well, I got a warning shot, essentially, to the Wen. Say, well, I got somebody who are very close to you, and I can get them to wreck on you. Yes. Then you beware. So that's one possibility. The second possibility is we were very close to, she was very close to this person called Shunzhen Cai, who was slaughtered to be the successor of

or possibly successor of, well, if he put him not in jail, he will be either the president of China or the premier of China next year. And he was taken down. And I think Xi Jinping is systematically imprisoning all his possible political rivals.

So because of close association with him, maybe she got disappeared by her association with that politician. And then the possibility, they just think you know too much. You know too much about what's happening at the top level. And then you become such a nuisance. We just want to. But it's not a crime to be associated with somebody. And it's not a crime to know something. So we're just going to disappear you.

Do you think that you'll ever see her again or that your son will ever see his mother again? Not in person. And what would happen to the two of you if you went back into China? I think my son, if he ever go back, there's a possibility they won't let him out, out of the country as a whole on me. Or as a demand, say, well, we got your son, you know, and he's not coming. He's not getting out of the country unless you come back. And if I go back, I think I will be disappeared.

I want to connect this really harrowing personal story to the broader political implications of China and the way that we in the U.S. and in the West think about China and really the West's participation in collusion in some of these activities. So the government under Xi has been cracking down on the private sector, creating a ton of uncertainty and disruption in China.

And yet, still, despite this very obvious turbulence, you don't need to read any papers in Mandarin to know what's going on, the New York Times just reported that BlackRock recommended that investors boost their allocations in China by two or three times. And not just that. The firm's application to offer mutual funds in China was conveniently approved just before it made this recommendation.

And then you have companies like JP Morgan, Goldman Sachs, and others who are continuing to encourage investment in China. I want to get your reaction to that, especially to the BlackRock news. Is it too strident for me to say that firms like these are essentially functioning as a propaganda arm of the Chinese Communist Party in exchange to access of billions of dollars from the Chinese market? And if not, tell me why that's wrong.

I think that's two things happening here. The first part of it is China, you know, we have a lot of talk about the United Front program, which they have this part of things called elite capturing, right? If you are, they deem you as a elite of the Western society, they want to, when they say capture, they basically want you to turn you.

become their advocate, turn you into a believer of China's story and an advocate of China's story. And obviously, they have been doing that successfully to the senior management of BlackRock. And the second thing is profiteering, right? They promise you certain profits and then suck you into their system and use that because they say, well, BlackRock is obviously the biggest investment firm, management company on the world today.

I will give you some profit today. In return, I will suck you into my system and then you will actually bring me more money into my system for my use. That's what's happening. How aware are the people that are running companies like BlackRock of the dynamic you just explained? Are they aware of it and complicit or are they deluding themselves or somehow incredibly naive about what's really going on? I think both are in play here. I think first of all,

A person like that, like the senior management of BlackRock, when they go into China and then supposedly on the quote-unquote due diligence trips and then having dinners with supposedly their good friends in China who are well-connected, the entire thing is actually a choreographed and staged place.

I mean, who gets to talk to them and what message they are sending to them is definitely choreographed. And then they, in the play, they're like, they feel like they thought they are getting inside the news of China. They feel like they're getting inside the knowledge of China. But actually, what it is, is just the idea just actually being played. I think that's one part of it. And the second part of it is the promise of a profit.

They're getting now, the Black Rogers most recently getting a license to operate their own wholly owned subsidiary in China. In the past, the Chinese said, well, if you want to come to manage Chinese money in China, it must be a joint venture with a Chinese company. And then the Chinese company must be in a controlling shareholder.

And then they changed that, you know, now, you know, to say, well, maybe the Chinese company can be a minority. But in this BlackRock case, they said, well, you are one of the first, early first company, we're going to give you a fully owned license to operate your own company in China.

And that, as almost in any other country, that's like, yeah, of course, this is my company. Why can't I make my own decision? But in China's case, it's really to play as a favor to them. And then with the Chinese economy at the size it is, people are in the senior management background probably believe they can make some money. And then they say, well, despite all the risks, we probably can still make some money out of this situation. And then obviously, if you want to make money in China, you know

You need to be a China advocate. Are the people running BlackRock morally compromised? It's definitely morally compromised because you are, in a way, you are selling out your own democracy for dictatorship, for totalitarian regime in pursuit of profit. We'll be right back.

It is a fact of life that in order to succeed in the Chinese market, you need to kiss up to the CCP. Is it right to assume that American companies and Western companies who are thriving in China and want to continue to grow in the Chinese market are doing that in their own ways as well?

Definitely. That's why JP Morgan had been caught employing the princelings of the aristocrats to be their advocate and then to deal with the Chinese system. One thing I want to say is the investment manager of the world, I mean, today, especially today, China wasn't as much in the past, but especially today.

Politics decides everything in China. The Western fund managers, they're good at corporate company analysis, industry analysis and all of that. But in today's China, that's very, very secondary. You just look at the tech industry. Xi Jinping, by his policy, within two months wiped out something like 200 billion of market cap from the six, seven tech companies.

That has nothing to do with your industry analysis. It has nothing to do with your company analysis. Your analysis work will never prepare you for that. It's all about reading the tea leaves of the politics of China. He's doing that because for the key thing that's necessary for his control of power in China, are any of these fund managers capable of reading these tea leaves of politics in China?

There is obvious moral rot and hypocrisy on the part of companies like Nike and Apple and the NBA who talk about social justice here at home and in the meantime are running, you know, factories full of Uyghur slave labor. It's despicable. Like, the moral argument against that is clear.

What is the financial and economic argument against that? Because those companies will say, well, it's kind of working out for everybody right now. But what I hear you saying is maybe it's working out for you in this moment. But given the fundamental nature of the CCP, it's a very bad long-term economic strategy. Yeah. I mean, if you look at the Japanese companies, so the Japanese company, one of the longest investors in China,

And now because of the military tension and the politics of China, a lot of Japanese companies are pulling out of China. But the moment they start pulling out, all of a sudden they realize all their money they invest in China cannot get out of China. And this is not me, you know, hypothesizing. This is actually happening. If you just, you know, just go on the Internet, you will see that.

Your money invests into China. The moment actually you say, well, okay, on book, I'm making like X million, you know? And then the moment you say, well, I want to sell this and I want to put this money out. Well, the CCP said, well, you cannot get out. The CCP regards every piece of asset and property in China belongs to them. If it's in your bank just because we let you temporarily hold it. If I decided I need it, I will take it from you. This is the way they look at it.

For a long time, the consensus in the West was that, and this was on the right and the left, that opening up markets in China would inevitably lead to an opening up of politics, social life, culture, right? That free markets would lead to free people. And also that Chinese that are educated overseas would also sort of be agents of change in the country. Didn't pan out that way. How did we get it so wrong?

I think one of the things we got it so wrong is to not fully recognize the nature of the beast. The nature of the beast is CCP as a party want a permanent hold on power. But see, you know, talk about CCP is very abstract. It's a political party. What does that mean? But you talk about the Red Aristocrats, that group of people, you know, if you're born into that system in the situation you're in,

Why do you want to give up power? You have unlimited power, unlimited access to opportunity. As I said, you have farms, the state has a farming system just to support your food supply. And then you have a permanent rule over 1.4 billion people. Why do we want to give up that power? There's no incentive to give up their power. And then this is not just him, his offspring. I mean, Xi Jinping is a second generation.

And then there are some third generation now, it's fast-tracking throughout the system. This group of people has a hold on the Communist Party. Why do they want to give up power? They would never want to give up power. If I'm in this situation, it's human nature. I want to hold on to it forever. Desmond, at one point, and you write about this in your book, you were...

not just part of the system that you're now on the outside of and criticizing sharply, but you were a cheerleader for it. You write about how during the Umbrella Movement, the pro-democracy protests in Hong Kong in 2014, you were part of the counter protests, really sort of in a way being the amplifying system of the party. I'm so curious to ask you now what you would say to that earlier version of yourself.

I think there's two sides of it, you know, looking back at the situation. I mean, I think one side of it, I mean, you know, that's not realizing, you know, the desire of the permanent whole and power, they're never going to change. We feel like, I feel like,

I was part of the change. China's opening up, China's reforming. Maybe there's imperfections now, but we will just kind of overlook it because generally things are going well. It's opening up further and further. And we are part of that change. I think that's one part of it. The other part of it is I think obviously I'm profiting from the situation.

And that blinds myself too. I mean, it's like, well, you know, it's like, well, you know, I'm doing well, you know, this system is, you know, it's changed my life in a good way. And then maybe, you know, I should help the system. Both of that was in play for me at that time. And then looking back. And the second thing, I think, really, I mean, the last decade under Xi Jinping, China really has changed. I mean, not changed, revealed its true colour.

The CCP really have come out and revealed its true color. And then, you know, now I think we all see that. I mean, the whole world, you know, sees that China is in a very different light now over the last 10 years, right? It's interesting just thinking back to what you were saying about American companies sort of just wanting to put short-termism and profits over other things. It's like you yourself experienced that same incentive. Now looking back, though, at that democracy movement, which...

was full of so much promise that of course now, you know, democratic Hong Kong is being erased. The movement has been put down. Many of those young activists also like you live in the UK. How did you think about that movement then versus how do you think about that movement, especially the young people who were at the forefront of it now? I think Hong Kong, I mean, what happened in Hong Kong in 2019 really broke my heart.

I mean, I grew up there. I mean, my friends, you know, my friends and relatives are still there. And to see that, you know, for me, it was like the 89 Tiananmen Square, you know, watching it, you know, I mean, obviously this is time I actually went there with the protest and actually smelled the tea, I guess. It's like that. It's like, you know, 9-11 moment, you know, you remember what's happening on the ground and what you're actually doing at that particular moment. And

I think Hong Kong really revealed the true colour of the CCP and the brutal nature of CCP to the world. I mean, for a lot of people in the world, you know, you talk about something happening in Xinjiang, in China, you can't really envision it. But you talk about cities like Hong Kong, so many of us have been, it's just like any other Western city, right? All of a sudden you see, well, wow, thousands of people get arrested, 100 sentenced to jail, the police brutally beating everybody on a peaceful demonstration. It's just like...

And all of a sudden, this once vibrant city, now it's like Berlin being overrun by the Soviets, right? I really felt that way. And I remain just stuck on that story and the tragedy of it and the heartbreak of it.

And one of the secondary heartbreaks for me is, you know, as a journalist who's incredibly interested in what that signifies about the nature of China, but also about the closing of free societies and the transformation of free societies into fear societies. It's very sad for me that stories that we work hard on that are about that subject, you know, get a tenth of the amount of readership as, you know, a celebrity making a bad joke on Twitter.

And it's like the world doesn't seem to care that much about what happened in Hong Kong. Or if they did, it lasted for about a minute until everyone moved on. I think COVID really took a lot of away, the spotlights away from the situation in Hong Kong. And it's very hard. I think Hong Kong is, you know, now it's beyond rescue. You know, people just putting on a...

comic book. I mean, three social workers put on a comic book were put in jail because they said, well, you are a violation of the national security law because you put on a comic book, which the state doesn't like. And of course, you know, you bring up COVID and COVID is a whole nother story about the nature of the CCP and its willingness to disappear scientists and doctors. But we'll leave that for another conversation for now. Just one last question.

Do you think that if you and Whitney hadn't sort of fallen out of favor, if the riches of the Wen family hadn't been exposed a decade ago in the New York Times, and your family status sort of remained unchanged, would you still be in China working alongside the members of the Red aristocracy and sort of hand in glove with the CCP? Would you still have that life? I mean, looking back, I think our marriages at that point

We already have achieved tremendous wealth building business essentially together, but I'm already at that pace I want to strike on my own. And then she wants to remit me because she feels like you're going independent of her. So our marriage already, we're going separate ways because we envision different things in life. I talk about in the book, I want to diversify out of China.

And then I think this country has too much risk. So I think that's already there. You know, I think the marriage probably is hard to maintain with their story or without their story in the longer run. Maybe without their story, it probably lasts a little bit longer. But we're going separate ways. No matter, I think. And then, you know, I also talked about earlier, later in our business anyway, she still believes, you know, the future is...

more connection with politicians in the power. And I believe I already built a management team that's fully capable of going on in the market. We don't need all these politicians because I see

The risks of going with the politician and the unpredictability of building business around politics in China. So we're going different ways anyway. I think it's, you know, I give a plenty of example in the book. We are splitting because our philosophy of life are different. Well, you obviously felt strong enough to write this book, strongly enough about this subject. Now that you've published it, do you fear...

retribution of the kind that Whitney was warning you about on the call from China? You know, as somebody told me, you know, you're an enemy of state for the rest of your life. What they're going to do, it's hard to predict. And then essentially, I mean, reality is there's nothing I can do about it. You know, it's, you know, people say David versus Goliath. In my case, it's like one person against a party of 90 million people.

What can I do? You know, and I am a sworn enemy of the state for sure. And come what may, and then this is it. Desmond, thank you so much for writing this book. And thank you for talking with me today. Oh, thank you. Thank you for all the great questions you have had with me. Thanks for listening. And thank you so much to Desmond for sharing his story. I highly recommend his book, Red Roulette. We're continuing to follow the disturbing story of Peng Shuai.

A huge bravo to the Women's Tennis Association, whose head said that he was willing to pull his business out of China and lose millions if Peng's allegations are not fully investigated and she's not spoken with directly. Steve Simon said, we're willing to deal with all of the complications that come with it because, certainly, this is bigger than the business. The NBA would do well to follow the WTA's lead. See you soon.