BEIJING – Wealthy and powerful entrepreneurs in China were once idolized by the public, revered by the government and courted by foreign investors. They helped build the Chinese economy into a powerhouse, becoming the global face of Chinese business in a freer era, amassing billions of dollars in fortunes, buying villas abroad and holding court at elite international gatherings.

Now, billionaire tycoons are the underdogs in an increasingly state-run economy that prioritizes politics and national security over growth. As the government cracks down on businesses and the economy falters, they keep a low profile, stepping down from their businesses or leaving the country altogether.

In the latest exodus, two of China’s best-known entrepreneurs, Pan Shiyi and Zhang Xin, resigned as chairman and CEO, respectively, of their Soho China real estate empire this week. Both had relocated to the United States early in the pandemic and were trying to manage their business with late-night callbacks to China.

It’s been a tough year for your company. A deal to sell a majority stake to the Blackstone Group in New York fell through when regulators didn’t approve it. Soho China stock has lost more than half of its value over the past year.

“Highly successful entrepreneurs in the early 21st century generally have to ask themselves whether it’s in their best interest to keep running their businesses and stay in China,” said Michael Szonyi, former director of Harvard’s Fairbank Center for Chinese Studies University. “For these company founders, the writing is clearly on the wall.”

The husband-and-wife couple had embodied the broader rise of China’s economy from rags to riches. Mr. Pan was born into a poor family in Gansu Province, while Ms. Zhang worked in a garment factory in Hong Kong as a teenager.

They started their real estate business on the island of Hainan in China’s far south, a place that has a reputation, even by Chinese standards, for having experienced dizzying ups and downs in house prices. They then quickly focused on China’s largest cities, Beijing and Shanghai, building luxury apartment and retail complexes in some of the most expensive neighborhoods.

Many real estate developers built rectangular boxes with architectural palettes often limited to garish color choices for the glass and eccentric roofs in poor imitation of European mansions. Instead, Mr. Pan and Ms. Zhang enlisted star architects from the West like Zaha Hadid, a friend of Ms. Zhang’s, and created buildings with curved but minimalist façades.

Their resignations underscore growing concerns among private entrepreneurs that China is moving away from the free-wheeling capitalism pioneered by Deng Xiaoping and former Premier Zhu Rongji. Mr. Deng turned to entrepreneurs in the late 1970s to rebuild the economy after the devastation of Mao’s Cultural Revolution, and Mr. Zhu then ushered China into the World Trade Organization and to its role as the world’s largest exporter.

Xi Jinping, head of state since 2012, has instead led China towards a much more authoritarian, state-run society, where national security concerns increasingly take precedence over economic growth. Both business leaders and human rights activists who dared to publicly question Mr. Xi have been jailed as China tightened the reins on the private sector.

Very wealthy entrepreneurs used to be “able to operate as they wanted as long as they didn’t cross certain political boundaries, but those boundaries were fairly loose even during Xi Jinping’s first term in office,” which ended in 2017, said Victor Shih, a specialist in Chinese Economics and Politics from the University of California San Diego. “That has all changed. They’re not such stars anymore.”

Jack Ma, a co-founder of Alibaba who later led the company to dominance in China’s e-commerce sector, has resigned from top positions at the company. Colin Huang, founder of Pinduoduo, a rival of Alibaba, resigned as chairman early last year, less than a year after stepping down as chief executive.

A year ago, Zhang Yiming, founder of TikTok’s parent company ByteDance, said he would step down as CEO to focus on long-term strategy. And when Shanghai went into a two-month lockdown earlier this spring as part of China’s “zero Covid” strategy, Zhou Hang, another prominent tech entrepreneur and venture capitalist, left the city for Vancouver, British Columbia, where he had a strong case against she spelled out China’s current policy.

The problems in Soho China are piling up. The company announced on July 7 that police are investigating its chief financial officer over possible insider trading in Soho stock. Over the past year, Soho has been repeatedly accused of overcharging tenants for electricity and has been fined nearly $30 million.

The government’s efforts to stem a housing bubble, coupled with frequent lockdowns in Chinese cities as part of the country’s crackdown on the pandemic, have seen the entire property market stumble — and with it, the fortunes of Soho China. Soho China announced that the average occupancy rate of its investment properties in Beijing and Shanghai had fallen to 80 percent as of June 30.


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Soho China and Ms. Zhang, who frequently speaks for the company, did not respond to calls and texts asking for comment. Two executives at the company, each with Soho for about two decades, Xu Jin and Qian Ting, have been promoted to co-chief executives, according to a filing with the Hong Kong Stock Exchange on Wednesday. A private equity manager, Huang Jingsheng, has been appointed non-executive chairman of the company.

Mr. Pan and Ms. Zhang will remain as executive directors at Soho, Soho China said in its filing, without specifying senior positions for them.

Her resignation comes as the Chinese Communist Party prepares to hold its national congress for the first time in five years, beginning Oct. 16. Congress is expected to give Mr Xi a third five-year term and possibly amend the party’s charter to further tighten its grip on the country’s private sector.

But China’s economy is on the wane and tensions with the United States are high. This combination has made it difficult for Mr. Xi to present himself to Congress as a successful leader.

“Here he is, six weeks before a convention, and things are tense, so that’s exactly what he didn’t want,” said Barry Naughton, a professor at the University of California, San Diego.

The troubles also make China a less attractive place for wealthy investors like Mr. Pan and Ms. Zhang to hold their money, he noted. “What a good time for her to step down.”

Over the past quarter century, Mr. Pan and Ms. Zhang had benefited from China’s rapid urbanization. When they founded Soho China in 1995, the country had 352 million urban residents — a number that had more than doubled by the last year. For many Chinese, housing has become the most important investment, accounting for two-thirds of household wealth.

The pair catered to China’s wealthiest elite with projects such as Galaxy Soho and Wangjing Soho in Beijing and Sky Soho in Shanghai, all designed by Zaha Hadid Architects. These ambitious projects were a symbol of the central role real estate plays in China’s economy, a sector that soon accounted for nearly a third of China’s total economic activity.

As Mr. Pan and Ms. Zhang’s wealth increased, so did their notoriety as the faces of a new generation of sophisticated, cosmopolitan Chinese business leaders. On his social media account Weibo, Mr. Pan has attracted more than 18 million followers and has used his influence for years to call for changes like cleaner air in Chinese cities. Ms. Zhang, who earned a master’s degree in economics from Cambridge and worked at Goldman Sachs early in her career, became a featured speaker at the World Economic Forum in Davos, Switzerland.

The couple’s penthouse duplex in Beijing has become one of China’s hottest lounges for dinner parties, drawing intellectuals, artists and government leaders from across the country and the world.

But China’s entrepreneurs have come under pressure as Mr Xi has continued his “shared prosperity” campaign for corporations and tycoons to share more wealth with their compatriots in a bid to reduce inequality. Mr. Xi has asserted the Communist Party’s control over the private sector and demanded political allegiance from corporations and businesspeople.

Ren Zhiqiang, another wealthy real estate developer and friend of Mr. Pan, was sentenced to 18 years in prison after criticizing Mr. Xi. Some entrepreneurs have been silenced on social media. While Mr. Pan and Ms. Zhang’s Weibo accounts are still active, they have rarely posted, sticking to mundane, boring topics.

“This is part of the development of the Communist Party,” said Drew Thompson, visiting scholar at the Lee Kuan Yew School of Public Policy at the National University of Singapore. “Private entrepreneurs — high-profile, wealthy people — are increasingly inconsistent with ‘common prosperity’ and the direction that Xi Jinping has taken.”

Li You contributed to the research.