Corruption takes its toll on Communist China

By John Gittings

HONG KONG: At least eight people -- and perhaps many more, according to some local reports -- were on Saturday said to have died when an illegally built shopping mall collapsed in southern China. They are the latest victims of a plague of corruption which the authorities are struggling to stamp out.

A jagged field of bricks and concrete was all that remained of the mall in the Houjie suburb of Dongguan. Witnesses said that it collapsed like a pack of cards with a loud rumbling sound as a heavy truck passed in the street outside.

It was the latest accident in a construction industry that is riddled with shoddy work. Premier Zhu Rongji has denounced "bean- curd construction". In this case the probable cause was that three storeys had been built on foundations capable of bearing the weight of only one.

Three managers of the construction firm were held by police. Last year a Communist Party official was sentenced to death for taking bribes and dereliction of duty after a bridge collapsed with the loss of 40 lives. Less than a week ago another bridge collapsed, this time in Shenzhen, next door to Hong Kong, injuring 19 people, five seriously.

Corruption in the construction industry is the tip of an iceberg. A dozen corrupt provincial networks are being investigated under direct orders from President Jiang Zemin. One particularly lurid case involves Lai Changxing, a peasant turned big-time smuggler in the coastal city of Xiamen.

"Now we know what capitalism is like," Chinese officials would say after being lavishly entertained by him. Communist Party and army bosses from Beijing, as well as local officials, were always welcome at the "Red Mansion", where Lai kept an eye on them from his sixth-floor office.

They would be in a restaurant on the floor below, eating sharks' fin and birds' nest soup prepared by a top chef flown in from Hong Kong. And after dinner they would adjourn to the karaoke bar or the sauna for more personal entertainment. Lai told his guests that they should relax on equal terms with the girls he provided. "You're just the same," he joked. "The only difference is that they are plain prostitutes and you are political prostitutes!"

Lai is now seeking to avoid deportation with his wife from Canada, after being arrested outside a casino in Niagara Falls where he frequently gambled thousands of dollars at a time.

He fled China last year after a tip-off from a local party official and escaped last month's trial when his smuggling ring was finally cracked -- and 14 death sentences were handed down.

The Xiamen smuggling ring is alleged to have evaded customs duty totaling 30 billion yuan (US$3.3 billion) over a period of six years.

Many believe the corruption does not stop in the provinces. Beijing was shaken last week by the news that China's Minister of Justice, Gao Changli, who made strong speeches calling for the rule of law, has been detained because of unspecified "problems".

"What has shocked the top leadership," says a Western diplomat in Beijing, "is this endless series of revelations about subversion of the state and its institutions. They fear that if they don't do something the whole system will collapse. After Gao's arrest, there will be some high-ranking people not sleeping well in their beds."

Jiang has now put his political weight behind Zhu, who had been battling corruption in the party for several years with only patchy results.

But Beijing still shows its ambivalence by giving only limited publicity to the Xiamen affair and other recent scandals. The details of Lai's operation have not been reported in China, and only 80 officials out of the hundreds he suborned have been convicted so far.

Lai was so successful in bribing senior customs officers in Xiamen that he refused to smuggle in goods by night, saying that would mean "behaving like a thief". Instead the foreign cars, tobacco, steel, oil and other commodities on which he paid no duty were offloaded by day in the main harbor.

Though Beijing officials say they want Lai back, no formal request has been made to Interpol and his arrest has not yet been reported in the Chinese press.

The latest lurid stories of Lai's activities in the Red Mansion have been published in Hong Kong in a book called Si Xiao (The Valiant Smuggler) by Huang Jie, which appears to use information from official sources.

Lai has now filed a statement claiming refugee status to the court in Vancouver which attempts to show that he is the victim of high-level political intrigue in China.

Lai's statement ends by saying that, if he is returned to China, he will be tried and sentenced to death "for political reasons". No one doubts he will face execution, but the reason will be more straightforward: there can be no mercy for a shrewd ex-peasant who brilliantly exploited official China's soft spot.

-- Observer News Service