This is actually one of his more visible appearances. In some images of him, at the resolution we use on this site, you'd never see him (you should definitely check them all out, though).

Galerie Paris-Beijing

It's no special effect, nor is it a new cloaking device inspired by Predator and the Red Dawn remake. It's old-fashioned hard work and dedication: Liu Bolin stays very still for hours while his assistants paint him to match the background.

Given Chinese safety standards, I hope they use a better class of paint than has shown up on some children's toys from there. Because I want this guy to keep doing stuff like this for a long time without being poisoned through his skin.

via Twisted Sifter