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Jinjiang, Fujian, China
Lai Changxing (born 1958) began as a Chinese businessman and entrepreneur from Jinjiang, Fujian, People's Republic of China. He was the founder and Chairman of the lucrative Yuanhua Group, based in the Special Economic Zone of Xiamen. At his height, he has been credited with converting China from communism to capitalism and bringing the country into the World Trade Organization. He imported foreign products like cars, cigarettes and was responsible for one-sixth of the national oil imports at one time. In the late 1990s he was implicated in corruption scandals involving a large smuggling ring. By 1999 he was described by several media organizations as "China's most wanted fugitive" and was arrested.
Lai evaded Chinese authorities and went to Canada, where he resided in Vancouver. After a lengthy extradition battle and diplomatic negotiations Canadian authorities deported him to China on July 22, 2011 upon promises that he would not be executed. He was sentenced to life imprisonment without parole.
Despite his massive empire of wealth, Lai often smuggled goods into China and broke numerous trade laws. He has also been referred as "the one who destroys lives" and "the corrupted smuggler".
Lai was born one of eight siblings in Jinjiang, Fujian province in 1958, year of the Great Leap Forward. He grew up in Shaocuo village (烧厝村). He nearly starved to death due to the Great Chinese Famine, but his family survived because his father converted a swamp into a personal vegetable field during the difficult years. Lai received almost no formal education as he spent one year in school before the Cultural Revolution shut his school down. According to some sources Lai received three years of education.
When Lai was age 18, Mao Zedong died and businesses were allowed to function again under Deng Xiaoping. He began working at a farming machinery factory before it shut down. At 20 he started a business making simple car parts. The business took off and turned into an empire. Within a decade he was the country's biggest private car importer.
In 1990 Lai tried to run a business to import duty-free TVs, where he made thousands. Two government officials from Shaocuo demanded fees be paid to them. When Lai refused, the two officials went to his house. At the time Lai was not home, but his sister was. The officials asked for business accounts, but she refused to give in. She was then beaten severely and sent to the hospital. The officials then started a tax fraud case. Lai would win in court, but his revenge campaign against Communist officials would tie up his businesses. Lai left Shaocuo and from this point on, played by the Communist party rule to bribe everyone.
In 1994 Lai founded Fairwell Group, also known as Yuanhua Group (远华集团有限公司), a prominent group of upstart companies that took advantage of the economic boom of Xiamen's status as a Special Economic Zone. The group was heavily involved in the importing/smuggling of cars, cigarettes and oil. The group invested heavily in the city's real estate, hotels, clubs, roads and other infrastructure. Lai also has his own brand of Fairwell cigarettes.
In the mid 1990s Xiamen no longer regulated maximum building heights. Many rich businessmen tried to build the tallest skyscrapers. Lai built the 88-floor Yuanhua tower and the Yuanhua International Centre with a groundbreaking ceremony attended by 2000 guests. Each guest received a 3000-yuan red envelope. Lai had prominent connections with the Fujian power elite; he was also a member of the Provincial Consultative Conference.
Lai was believed to be the mastermind of a US$10 billion scheme, during which he allegedly bribed high level officials in the administration of the Xiamen Special Economic Zone in order to smuggle luxury cars and entire tanker-loads of oil into the country. The smuggling ring fraudulently avoided US$3.6 billion in taxes and fees. Chinese authorities do not comment on allegations that Lai's Yuanhua group was also a conduit for clandestine military shipments, such as Silkworm missiles.
In 1996 Xiamen airport's terminal building 2, funded by Lai, was one of the biggest airport structure in the country. In 1997 Xiamen's party secretary even made him an honorary citizen (厦门荣誉市民). In 1998 he spent two million yuan to purchase a football team based in Foshan, Guangzhou and disbanded the team. He then moved all the players to Xiamen to create the Xiamen Lanshi F.C., and helped the team promote to the Chinese Super League. He even made his own film starring himself as a football star to improve his image.
He built a 7-story building called the Red Mansion (红楼), named after the classical story Dream of a Red Mansion. The mansion hired girls that were at least 5 ft 6 inches tall and have a highschool diploma at a salary of US$1000 a month. The girls were offered as sex mistresses and prostitutes to government officials.
Lai has his own Forbidden City replica (远华影视城) built with US$20 million that acts as a film production studio. He typically drove sedans. His armoured Mercedes was formerly owned by Party General Secretary Jiang Zemin.
Relationships with officials and celebrities
Lai is known to be financially linked with high-ranking Chinese officials and celebrities. Some of the people include Ji Shengde, major general of military intelligence for the People's Liberation Army. Ji Shengde is the son of former Secretary General of the State Council Ji Pengfei.
Singer Dong Wenhua was offered 10 million yuan if she took her clothes off for Lai, who was drunk at the time. She did take off her clothes for the money, and disappeared from public view. She returned to state-run television after 3 years. Others include Li Jizhou (李纪周), deputy minister for public security and Xu Ganlu (许甘露), Immigration secretary. Other corrupt officials include Liu Feng (刘丰), Zhuang Rushun (庄如顺), Lan Fu (蓝甫), Yang Qianxian (杨前线), Shi Zhaobin (石兆彬), Zhao Keming (赵克明). Some of them have already received sentences.
Chinese Premier Zhu Rongji, known for his anti-corruption stand and for repeatedly saying publicly that Lai needs to be executed, actually met Lai twice. In one meeting an offer was made for Lai to pay US$125 million in exchange for amnesty. This suggested the entire government knew of Lai's corruption for a long time. Lai also gave money to Zhu Niuniu, son of former deputy commander of China's 31st army from Xiamen. Zhu constantly threatened to expose Lai's smuggling if he did not help him with his financial problem from gambling at the Macau casinos.
Lai himself was an apprentice to then General secretary Jiang Zemin. At the height of Lai's corruption in the 1990s, the Fujian party chief was Jia Qinglin. Xi Jinping was the Fujian governor. Xi is currently the General Secretary of the Communist Party of China.
Lai resided in Fujian province before he moved to Hong Kong in April 1991. While he was in HK, the Chinese government pursued him. Lai explained to the HK Immigration Department that he was in HK because he was a friend of Leung Kam-kwong, an immigration officer who died in honor during the 2000 Immigration Tower fire. Because of this claimed relationship with the officer, he was hinted of an arrest warrants after him by the immigration department. The department then suggested he move to Canada. The HK government later responded that the claim was totally baseless as the officer was already dead and could not defend himself.
Lai fled to Canada with his wife Zeng Mingna (曾明娜) and children in August 1999. He paid US$1 million in cash for a house in South Granville Rise Vancouver. His kids went to private schools at a cost of US$4,000 a year and his wife opened a bank account with a deposit of US$1.5 million. They were chauffeur-driven around in a US$90,000 SUV. In 1999 he was detained apparently caught on a 28-day gambling spree at Niagara Falls casino. Lai was a regular customer at the casino where at one time bought as much as US$3 million worth of chips. Canadian police noticed him and suspected he was involved in money laundering or loan-sharking.
The family used a HKSAR passport to emigrate to Canada. Following heavy pressure from Beijing, Lai's Hong Kong permanent residency and HKSAR passport were revoked in 2002 by the Hong Kong Government, saying that he obtained the status dishonestly. Lai divorced his wife in June 2005. In 2009 Lai was granted a working permit and worked at a Vancouver real-estate company as a consultant.
The Chinese government has refused to drop the charges laid against him, and seeks his extradition. In the same corruption case, one of the largest in modern Chinese history, many high-level municipal and provincial officials were sacked and a few were sentenced to life in prison or death. The complex smuggling case shifted the entire political scene in Fujian by the late 1990s. A special task force operation was created by the government to track down Lai on April 20, 1999, called "4.20" (420专案组) with about 1200 investigators.
Lai has denied criminal wrongdoing, and stated that the allegations are politically motivated. Others like Pierre Lemieux defended Lai, saying he is only a criminal because of China's communist economic system and that with a free market, there would be no need for smugglers like Lai. Chinese websites could write about Lai as long as he was depicted as evil.
Lai's attorney, Winnipeg lawyer David Matas, says it is doubtful Lai could ever get a fair trial in China, given the extent of communist party influence in the opaque judicial system. Matas has filed for an assessment of whether Lai's family are at risk if they are returned to China. As long as immigration officials are considering this request, he says, they may not be removed from Canada.
Nevertheless, Lai has repeatedly been denied political refugee status in Canada, most recently in September 2005 by the Supreme Court in Ottawa. This seconded the Federal Court of Appeal, which in April had refused to hear Lai's appeal of the June 2002 Refugee Board decision, on the grounds that Lai and his wife failed to meet the standards to be designated as refugees.
Canada does not have the death penalty and is prohibited from deporting accused criminals to countries where they will face capital punishment. China claimed that he would not be executed if extradited from Canada. Canadian courts did not believe this guarantee, due to certain CPC bias in any trial and as 14 others involved in the complex Xiamen racket have already been executed. Svend Robinson, then New Democratic Party member of parliament for Burnaby-Douglas, also noted that Lai's brother died in a Fujian labour-camp after receiving a lesser sentence. The likelihood of a de facto death sentence remains an obstacle to his deportation.
On February 3, 2009, the Canadian Government granted Lai a work permit. Canadian officials have acknowledged that Lai does not have access to the vast fortune they thought he had upon arrival in Canada back in 1999. Lai has said his legal and living expenses are being funded by friends, whom he has declined to identify, saying they could be in danger if the Chinese government knew their names. Though the Canadian government allowed him to swap their detention cell for a luxury apartment in Burnaby Vancouver.
On July 8, 2011, John Baird, the Minister of Foreign Affairs of Canada, said that, the extradition of Lai must accord to the program of Canadian Laws independently. In early time, Lai's Refugee Application was refused, with the possibility of extradition to China.
Lai's corruption is known to have reached the top levels of the Chinese government. He has publicly declared in the past that if he returned to China: "many high government officials will not be able to sleep. Incidents will happen." In relation to the case, 14 people have already been executed, about 300 provincial officials have already been put on trial. Since 2002 Beijing sent MSS agents to follow him wherever he went.
On July 22, 2011, Lai Changxing was extradited to China. He was escorted to Vancouver International Airport and boarded Air Canada flight 29 (AC 29) bound for Beijing. He was later transferred to Chinese custody on July 23, 2011, and signed an arrest warrant issued for his arrest upon his arrival in Beijing. Spokesman of the Chinese ministry of foreign affairs has expressed satisfaction concerning this decision, referring to Lai as responsible for the "biggest economic crime in the history of the People's Republic of China."
On May 18, 2012, Lai Changxing was sentenced to life imprisonment on charges of smuggling and bribery by the Intermediate People’s Court in Xiamen. In addition, all of his property was confiscated.
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- A short film about the making of the book Inside the Red Mansion by Oliver August.