Page 2 of
2 Resentment builds
against China's wealthy By Kent
Ewing
Holdings chairman Zhang
Rongkun, whom Forbes magazine listed as China's
16th-richest man in 2005, as well as property
tycoon Zhou Zhengyi. Zhou - China's 11th-richest
man in 2002, according to Forbes - was released
from prison only last May after serving three
years for fraud and stock-market manipulation but
now faces fresh charges of bribery and forgery of
VAT (value-added tax) receipts.
Other
tycoons caught in the anti-corruption web include
Gu
Chujun, chairman of Guangdong
Kelon Electrical Holdings, currently facing
charges of fraud and embezzlement; Tang Wanxin,
president of now-bankrupt D'Long International
Strategic Development, jailed for eight years in
2006 for illegal banking and manipulation of the
stock market; and Yang Bin, chairman of Euro-Asia
Agriculture, jailed for 18 years in 2003 and fined
nearly $300,000 for forgery and fraud. Forbes
ranked Yang China's second-richest man in 2001,
with assets totaling $968 million.
China's
biggest symbol of venality, however, remains at
large, the subject of a seven-year extradition
battle with Canada. Lai Changxing's brand of graft
was so brazen that, in the 1990s, he allegedly
controlled the entire city of Xiamen in his native
Fujian province.
Born into a peasant
family, the semi-literate but business-savvy Lai
established an elaborate network of official
connections that extended into the central
government and allowed him to operate a $10
billion smuggling business that cost tax
collectors $3.9 billion in lost revenue and put
thousands of people out of work.
Lai's
biggest profits reportedly came from luxury cars
and oil, but he smuggled everything from mobile
phones to cigarettes. To assure that his massive
operation ran smoothly, Lai is said to have bribed
a host of officials, both local and national.
He even had a building constructed in
Xiamen where these officials were wined and dined
and entertained by handsomely remunerated call
girls recruited from Beijing and Shanghai. The
building, dubbed Red House, was the new capitalist
China's equivalent to a place of a similar name
that features in the classic novel Dream of the
Red Chamber, a tale of corruption and
decadence set during the Qing Dynasty.
Lai
kept an office on the top floor of Red House and
hired a Hong Kong chef for $7,700 per month to run
an exclusive restaurant on the second floor
serving such delicacies as abalone and shark's fin
soup. After dinner, there were karaoke rooms,
saunas, entertainment suites and lots of women.
Word of Lai's brazenness reached
then-premier Zhu Rongji, who during a 1998 Lunar
New Year visit to Xiamen, one of China's
wealthiest and most modern cities, allegedly
challenged the smuggler face-to-face at a
reception.
"You owe me 1 billion in
taxes," Zhu told Lai. "Pay what you owe, stop
smuggling, and that will be the end of the
matter."
But Lai's hubris was so great
that he brushed off the premier's offer and went
back to business as usual. Zhu responded by
sending 400 investigators to Xiamen to close down
Lai's operations.
In August 1999, acting
on a tip from the Fuzhou police chief that his
arrest was imminent, Lai fled the country and
wound up in Canada. Zhu later said the fugitive
should be executed three times over for his
crimes.
China, however, has no extradition
treaty with Canada, which refuses to extradite
prisoners who could face the death penalty. But
even after Chinese authorities assured Ottawa that
Lai would not be executed, the talks have become
bogged down over human-rights issues since the
election last year of Canadian Prime Minister
Stephen Harper.
Harper is particularly
upset about the case of Huseyin Celil, a
37-year-old imam with dual Canadian and Chinese
citizenship who was deported to China in February
2006 after being arrested in Uzbekistan. Celil
faces trial on terrorism charges in Urumqi,
capital of Xinjiang Uygur Autonomous Region, but
Canadian diplomats have not been granted access to
him because Beijing does not recognize his
Canadian citizenship.
Ultimately, Lai's
fate may be tied to the imam's; meanwhile, China's
biggest sinner remains on foreign soil and is in
no hurry to come home.
The smuggling
kingpin is in good company. State media report
that 4,000 officials - bankers, fund managers and
other members of China's new breed of plutocrats -
have fled the country to avoid prosecution for
their financial misdeeds. Unfortunately, they
carried billions of yuan in ill-gotten booty with
them.
Kent Ewing is a teacher
and writer at Hong Kong International School. He
can be reached at kewing@hkis.edu.hk.
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