Lai Changxing (born September 15, 1958) is a Chinese businessman known as the kingpin of one of China's largest economic crime cases. In 1994, he founded the Yuanhua Group, based in the Xiamen Special Economic Zone, which imported goods including cars and cigarettes and, at one point, accounted for one-sixth of China's oil imports. Through an extensive network of corrupt ties with government officials, Lai's operations allegedly evaded RMB 23 billion (US$3.6 billion) in customs duties. Facing an investigation, Lai fled to Canada in 1999, while many his associates were tried and executed.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 17–19. Following a 12-year legal battle over his extradition and diplomatic negotiations, Lai was deported to China on July 22, 2011. He was sentenced to life imprisonment in 2012.
Early years Lai was the eldest child born to Lai Yongdeng and Wang Zhuzhi in Jinjiang, Fujian province in 1958, the year the Great Leap Forward began.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 99. He was the first of eight children. He grew up in Shaocuo village (). He would have starved to death during the Great China famine but luckily in Jinjiang and the rest of south-eastern Fujian the situation was greatly milder due to massive overseas Chinese donations and better leadership (unlike Tingzhou where about 100,000 Hakkas starved to death due to the Great Famine), his family also survived because his father converted a swamp into a personal vegetable field during the most 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.South China Morning Post. Epic career of Lai Changxing. July 23, 2011
Career
Factory worker When Lai was age 18, Mao Zedong died and private businesses began re-appearing across China under Deng Xiaoping. Lai began working at a farming machinery factory before it shut down. At age 20 Lai 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.
TV business 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.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 103–104. 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.
Yuanhua group In 1994 Lai founded Fairwell Group, also known as Yuanhua Group (), 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.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 60. 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 structures in the country.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 69. In 1997 Xiamen's party secretary even made him an honorary citizen (). 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 (), 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 had his own Forbidden City replica () built with US$20 million that acts as a film production studio.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 152. He typically drove sedans.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 189. His armoured Mercedes was formerly owned by Party General Secretary Jiang Zemin.
Relationships with officials and celebrities According to Oliver August's book Inside the Red Mansion, 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.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 171 – 178. Ji Shengde is the son of former Secretary General of the State Council Ji Pengfei.
August alleged that singer Dong Wenhua was offered 10 million yuan if she took her clothes off for Lai, who was drunk at the time. She purportedly 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 (), deputy minister for public security and Xu Ganlu (), Immigration secretary. Other corrupt officials include Liu Feng (), Zhuang Rushun (), Lan Fu (), Yang Qianxian (), Shi Zhaobin (), and Zhao Keming (). Some of them have already received sentences.
Lai's corruption of what was said to be literally hundreds of Chinese officials was effected through paying millions of dollars in bribes, by hosting lavish banquets and by giving jobs to relatives of local bureaucrats. He also blackmailed officials, through filming them with prostitutes arranged by him. Such arrangements enabled his companies to receive illicit import licenses and to avoid billions of dollars in import taxes. Lai's level of corruption of officials was to such a degree that corrupted naval officers allegedly ordered naval ships to escort freighters carrying Lai's contraband.Diane Francis, "Lawyers, lobbies corrupt meaning of refugee policy". Financial Post, March 17, 2001: D3.
According to August, then Chinese Premier Zhu Rongji, known for his anti-corruption stand and for repeatedly saying publicly that Lai needs to be executed, met Lai twice. In one meeting an offer was allegedly made for Lai to pay US$125 million in exchange for amnesty. This, according to August, suggested the entire government knew of Lai's corruption for a long time. Lai also purportedly 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.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 186.
Lai himself was said to be 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, now CCP General Secretary, was the Fujian governor (though this is likely irrelevant since by the time Xi Jinping became the governor of Fujian from 1999 to 2002 Lai had already fled to Hong Kong and then Canada in 1999).
Emigration
Hong Kong 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, a senior immigration officer who later died in honor during the Immigration Tower fire in 2000.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 156–158. Leung apparently secretly warned Lai about the immigration department's pending warrant for his arrest. Leung also suggested Lai move to Canada to escape arrest. However, the HK government later responded that the claim was totally baseless as the officer was already dead and could not defend himself against these accusations.
Canada Lai fled to Canada with his wife Zeng Mingna () 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 Casino Niagara in Niagara Falls. 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. Lai and his family then made a claim to stay in Canada as refugees.
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.http://news.sina.com.hk/cgi-bin/news/show_news.cgi?date=May 20, 2006&type=china&ct=china&id=1975157
Following his detention in Canada, Lai was able to obtain his release, pending the hearing into his refugee claim, by placing himself under house arrest. He returned to the family's luxury condo in Burnaby, a suburb of Vancouver, and agreed to pay $80,000 per month to live under the guard of a private security firm.August, Oliver. (2007) Inside the Red Mansion: On the trail of China's most wanted man. Houghton Mifflin company. . kindle ebook pg 203. Notwithstanding such arrangements, Lai was observed by RCMP officers associating with known members of Asian smuggling gangs in Canada.
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.
Charges