Thursday , 8 December 2022

Guest Post: Chinese Banker’s Execution Leaves Us With More Questions than Answers

Iranwire – Jianli Yang, a mathematician and human rights activist, survived China’s Tiananmen massacre in 1989, after which he left China for the United States. He returned in 2002 and was jailed between 2002 and 2007 for supporting the country’s labor movement. He was intermittently held in solitary confinement for a total of 15 months – as detailed in a previous IranWire interview – and returned to the US after his release.

As part of IranWire’s ongoing coverage of disinformation, Jianli Yang analyses Chinese media narratives around the recent execution of businessman Lai Xiaomin.

The Chinese financial magnate Lai Xiaomin was executed in China on January 29, convicted of bribery, corruption and bigamy. In a move widely criticized by activists all over the world, the businessman was sentenced to death for ostensibly taking huge bribes and having a large number of mistresses.

Just 24 days passed between the sentencing and the execution. The extraordinary speed at which it was carried out is rare in China. Why was Xi Jinping’s regime in such a hurry to kill this man? And what danger did he really pose?

Some of those on the outside are beginning to wonder if there might in fact be a major hole in China’s finances. Could it be that China’s financial sector is now so riven with problems that Xi Jinping has no choice but to use Lai Xiaomin’s life to make an example of him? 

In fact, no need to look any further than China’s official media. The official charges notwithstanding, commentaries have already been published confirming that  the execution of Lai Xiaomin was based on the prevention of “financial risks”.

The state news service China Central Television (CCTV) announced Lai Xiaomin’s execution as “demonstrating Xi Jinping’s determination to govern the Party strictly”. Xinhua News Agency, meanwhile, said the execution of the “Giant Corrupter” highlighted “heavy-handed anti-corruption determination”, and elevated Lai Xiaomin’s sentencing to the lofty political heights of “preventing and resolving major financial risks”.

Xinhua’s coverage went on: “The case involved the largest amount of bribery since the founding of New China. Finance is the core of the modern economy and the bloodline of the real economy. Corruption in the financial sector is hidden and complex, but also extremely harmful. Once the problem breaks out, it is possible to cause a huge impact on the real economy, and even endanger social stability. The capital punishment of Lai Xiaomin is a typical case of promoting anti-corruption in the financial sector in accordance with the law, preventing and resolving major risks, and also a powerful response to the requirements of the times in the fight against corruption…”

By its own admission, then, the state went above the law in executing Lai Xiaomin to make a point, rather than based on the charges against him. But how exactly was Lai Xiaomin himself posing a “financial risk” to the Communist regime?

Again, Xinhua News Agency provides. “As the head of a state-owned financial enterprise, Lai Xiaomin regarded the exchange of state power with personal interests as routine. A large number of properties, gold, calligraphy and paintings, dozens of watches, Bentleys, Mercedes and other luxury cars… Lai Xiaomin showed his greed for material things and abuse of power to the fullest. And behind the dazzling corruption plot is the serious harm caused by financial crime to national financial stability.”

The state news agency goes on to state the company Xiaomin chaired, China Huarong Asset Management, was officially responsible for the disposal of state-owned banks’ non-performing assets. Lai, under the banner of supporting the national strategy, allegedly “set up institutions, blindly issued bonds, and invested the funds raised in real estate and other industries that were clearly restricted by the national policy”. Eventually, Xinhua writes, Huarong had been covertly turned “from a non-performing asset disposer to a non-performing asset maker”.

These are startling revelations. If true, who was it that gave Lai Xiaomin the huge bribes and why have they not also been put on trial? Who is being warned, and who is being protected, by the hasty execution of Lai Xiaomin?

Before Lai Xiaomin was sentenced to death, he apparently hoped to gain the mercy of Xi Jinping’s regime. In particular, he was very cooperative with the production team of the CCP’s Central Discipline Committee’s new anti-corruption feature film State Supervision. In the making of the film, he said whatever he was asked to say and how he was asked to say it.

One of the notable revelations of the film was that the anti-corruption “task force” had found a house in a Beijing neighborhood where Lai Xiaomin had allegedly hidden his stolen money. Inside, the film stated, there were multiple safes and strong-boxes holding vast sums of cash. In order to avoid investigation, Lai Xiaomin had apparently asked his bribe-givers to deliver in cash and would then drive to the house personally to store it, circling around the neighborhood several times to prevent anyone from following him. The building in question was nicknamed “the supermarket”.

In the film, Lai Xiaomin himself stated: “The financial industry deals with money every day: hundreds of millions, billions, tens of billions are just routine, so to get hold of some money is a piece of cake. With so many houses built, to give you one is nothing.” But he said nothing about who had bribed him, or who had gifted him the building.

The relevant Chinese media reports only mention that Lai Xiaomine “provided significant criminal evidence that was proven to be true”. But they did not detail how he and his subordinates at Huarong “gave away” the state-owned assets of Huarong’s subsidiaries to “Fancy Year”, a family business run by the niece of senior Chinese ex-politician Zeng Qinghong,  on the cheap. Zeng Qinghong, the right-hand man of former Chinese leader Jiang Zemin, is considered the spiritual leader of the Chinese Communist Party princelings. His position with regard to Xi Jinping is a key measure of Xi’s overall stability. The fact that he was a patron of Lai Xiaomin is no secret, and yet little is currently being made of this.

According to the current laws of the Chinese Communist Party, a person who commits the crime of bribery can be sentenced to fixed-term imprisonment of between five and 20 years, depending on the severity, together with a fine and property confiscation. The Supreme Court has stipulated that the maximum sentence – of between 10 and 20 years – is reserved for those who offer a bribe to a state employee for the purposes of obtaining improper benefits, causing economic losses in the amount of 5 million yuan or more.

The official media organs of the Chinese Communist Party state that of the 22 bribe-taking offences ascribed to Lai Xiaomin, three of them alone amounted to 1.2 billion yuan worth of losses to state coffers. Even then, the law does not provide for a death sentence for Lai Xiaomin. And for the time being at least, not a single person who allegedly bribed him has faced justice and their names have not been disclosed.

It is safe to assume that among the paymasters of Lai Xiaomin were senior decision-makers in China, who were anxious – and moreover, had the power – to kill the story as quickly as possible.