To get an audience with China's most wanted man, you drive past Mr. Kim's Kimchee Emporium, Chan's No. 1 Chinese Language Tax Accountancy and the One-Stop XXX Adult Shop. Eventually, you pull up at the Crystal Palace—a deceptively named apartment complex in Burnaby, a dismal strip-mall suburb of Vancouver full of Asian immigrants. The elevator takes you to the 17th floor. You disembark and a cheap plywood door opens. There stands a man with slumped shoulders, his once merry cheeks deflated. Behind him, dishes are stacked high in a crowded kitchenette, the greasy smells of a Chinese breakfast congealing in the stale air. "Hello," he says softly, searching for more English words before shrugging apologetically and repeating his one English word again. "Hello, hello, hello."
It wasn't supposed to turn out like this, not for this self-made businessman who once paraded through the freewheeling southern Chinese city of Xiamen in a bulletproof Mercedes-Benz formerly used by President Jiang Zemin. If the Chinese dream is to get gloriously rich, then few Chinese rode that dream harder or further than the chubby, former well digger who became synonymous first with spectacular success and then with criminal excess. Indeed, Lai Changxing's business empire was so powerful that locals used to joke that Xiamen should change its name to Yuanhua, the name of Lai's company. Ever ready to toss a 100-yuan note to a passing vagrant, Lai earned a reputation as a modern-day Robin Hood, a big-hearted billionaire who helped out folks far more than most stingy government cadres ever did. But today, Lai has been charged by Beijing as the mastermind behind China's largest-ever smuggling ring. Now, at 44, the once mighty entrepreneur sits under house arrest in Vancouver, meekly awaiting word on whether Canada will extradite him home to face charges of smuggling, bribery and tax evasion—all of which he sees as a sure ticket to execution.
China has promised that Lai will not face the death penalty if he is returned. But 14 others convicted of lesser transgressions have been sentenced to death for their roles in Lai's financial dealings, and at least seven of them have already been executed. In all, more than 300 have been jailed for their involvement with Lai. Among those nabbed were top-level bureaucrats allegedly paid off by Lai, including Li Jizhou, the Deputy Minister of Public Security in Beijing, and Lan Pu, the vice mayor of Xiamen. In the teahouses of the capital, pundits whisper that the Lai case could reverberate even higher up into the echelons of power—and that's why China wants him home, to keep him quiet. Lai and his wife Zeng Mingna, now a haggard slip of a woman, refuse to believe China will honor its diplomatic promise to spare them from execution. "You cannot believe the Chinese government," says Lai, snapping a toothpick in half to emphasize his point. "They want to get me back so they can shut me up forever."
Whatever Lai's fate, his case provides an unprecedented glimpse into the often seamy and illicit web of economics and politics that defines business in China today. Foreign firms may be salivating at the thought that China's entry into the World Trade Organization could open up a market of 1.3 billion citizens. But business in the country is far too complex and incestuous for an international economic treaty to provide a neat solution. China's Cabinet has labeled corruption as the nation's No. 1 problem, and over the past year Beijing has launched a massive antigraft campaign in an effort to renew business confidence. More than 80% of Chinese university students believe China's biggest companies are corrupt, according to a recent online poll. Even Lai, who professes not to have committed any crimes during his stratospheric rise to power, admits, "The whole system in China is corrupt. To get ahead, you have to become part of that system."
No one, it seems, took advantage of that labyrinthine system more deftly than Lai. Beijing accuses him of having run a smuggling operation that racked up $6.4 billion in revenues from 1996 to 1999 alone—an amount almost equivalent to Xiamen's annual GDP. In that time, Beijing claims it lost $3.6 billion in unpaid tax revenues from Lai's activities, and China's state oil companies say they lost $360 million a year because of his smuggled oil. Lai is accused of sneaking everything from cigarettes to cooking oil, TVs to cars into Fujian province, with the direct complicity of hundreds of government officials.
All the while, Lai lived spectacularly large. He flitted about China building deluxe villas for his family, blowing money at chic nightclubs, and playing the beneficent philanthropist. A film buff, Lai constructed a $17 million replica of the Forbidden City in the outskirts of Xiamen as a giant set for future movies. He bought the city's soccer team, occasionally moonlighting as goalie. And he broke ground on an 88-story skyscraper that was to be Xiamen's tallest building—a worthy flagship for his empire.
Eventually, Lai's excesses became so outrageous that even the rulers in faraway Beijing began to take notice. "If Lai Changxing were executed three times over, it would not be too much," fumed Premier Zhu Rongji in October 2000. Indeed, it was Zhu himself, China's most vocal graft buster, who the year before had ordered an investigation into Lai's alleged smuggling, later precipitating the disgraced businessman's escape to Canada. For more than a year, state newspapers were filled nearly every day with the sordid details of Lai's alleged crimes, making him the greatest symbol of the country's mounting but, ultimately, all-too-narrow corruption crackdown. It soon grew to be the largest and most expensive criminal case in the history of the People's Republic.
From the outside, the infamous Red Chamber looks like any other office building in Xiamen—a drab and dusty complex covered in red tiles. Across the street, a row of beauty parlors sell haircuts, massages and more. Farther down, a sex shop hawks oversize dildos and the top-selling Plump Landlady blow-up doll. "This shop is nothing," laughs Liu Yan, the manager of the sex store. "Just think about what went on inside the Red Chamber."