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By Olivia Chung

HONG KONG - The return of Lai Changxing to Beijing at the weekend after 12 years holed up in Canada as a luxury-living fugitive will test China's ability in the coming weeks and months to keep its international promises. Attention will now turn to how its courts handle the biggest smuggling and corruption case in China's modern history.

Canadian federal Judge Michel Shore, ordering his return to China, said Canada had received "extraordinary assurances" that Lai would not be tortured or executed. Canada does not have a death penalty and prohibits deportation of prisoners to nations that might execute them. Shore's decision to extradite Lai came barely 24 hours after Canadian Foreign Affairs Minister John Baird ended a visit to Beijing and Shanghai.

State-run China Central Television on Saturday night showed Lai, 53, the chief suspect in a smuggling operation in Xiamen in east China's Fujian province, handcuffed and walking off an Air Canada plane with a Chinese police officer on either side of him. After being escorted to a building, Lai was told his rights, including the right to a lawyer. He was not told what charges he is facing or when he is going to face trial.

The peasant-turned-businessman is expected to face charges for bribery, smuggling and tax evasion. In 1999, Lai and his family fled to Canada after Beijing launched an investigation into his alleged smuggling business. Its operations in Xiamen were valued at US$10 billion, and hundreds of government officials reportedly served as protection. The case has been described as the largest involving smuggling since the founding of communist China in 1949.

Before fleeing to Canada, Lai lived a life of luxury in Xiamen's Huli district, with a six-story mansion, known as "the Red Mansion", given its dark red wall. The home was lavishly equipped with guest rooms, saunas and karaoke rooms, where Lai reportedly feted officials with liquor and prostitutes as he lured them into the smuggling operation.

From 1996 to 1999, Lai and his Yuan Hua group allegedly dodged tax worth 30 billion yuan (US$4.6 billion at present rates) by smuggling petroleum products, cars, electronics and cigarettes worth 53 billion yuan.

In November 2000, 14 of about 100 people accused in the smuggling case were sentenced to death. Three were executed, including Ye Jichen, president of the Xiamen branch of the Industrial and Commercial Bank of China, who was convicted of accepting 2.9 million yuan in bribes and having 4.9 million yuan in unaccounted funds; and Wu Yubo, former section chief of Xiamen customs bureau, after being convicted of receiving 8.7 million yuan in bribes. Eleven others, including former Xiamen deputy mayor Lan Fu and former public security vice minister Li Jizhou, were sentenced to life or given suspended death sentences.

More than 600 people were investigated in the case, including customs, police and government officials, and 300 people were punished for their involvement in Lai's smuggling deals, according to the official Xinhua News Agency.

Lai fled to Canada via Hong Kong in August 1999 and tried to obtain refugee status there. To avoid deportation, Lai claimed he could face the death penalty or be tortured if he was sent back. Lai has ever since then been trying by every means possible to stay in Canada. That legal battle ended last Thursday when a federal court in Vancouver ruled Lai should not be considered a refugee and upheld his deportation.

Lai's lawyer David Matas said the assurances by China that his client would not be executed were inadequate, noting that Lai's brother and accountant had died in prison without explanation, the Los Angeles Times reported. Legal experts and academics in China, however, believe Lai's trial will be used by Beijing to demonstrate the country's improving legal proceedings.

"With global attention on this case, the judiciary will carefully deal with Lai's case to demonstrate China's capability to uphold the rule of law," said Huang Feng, director of the institute of international criminal law at Beijing Normal University, who used to work in the Ministry of Justice. "China will abide by its promise, including holding an open trial and following all judicial steps as well as it can."

While staying in Canada, Lai gave numerous interviews hinting that if he was repatriated to the mainland, many senior officials would be in trouble as he still had evidence against them. Jia Qinglin, now the Communist Party's fourth-most senior leader, was the Fujian party chief at the time of Lai's alleged smuggling operations in the province.

Those implicated included Jia's wife, Lin Youfang, who denied any wrongdoing. Jia's political fortune was salvaged only through the intervention of Jiang Zemin, the president and party chief at the time, the Wall St Journal reported, citing Chinese and Western experts on Chinese politics.

Huang, however, believed it unlikely that Lai's return would have any impact on the existing domestic political situation in China as his reported involvement with senior officials has been diminished by the passage of time.

Ong Yew-kim, visiting lecturer of political science and law at Chinese University in Hong Kong, believes China will not execute Lai, though Canada and China haven't signed an extradition treaty.
"By keeping its promise not to execute Lai, China can raise its international image and improve its chance to get back to face justice about 600 suspects who are on the run from the law overseas," he said.

China has signed bilateral extradition treaties with a number of countries, including Spain and France, to waive capital punishment for people facing extradition.

However, Beijing has to be cautious in dealing with Lai's trial. If Lai receives a particularly heavy sentence, "China will be pinpointed by international leaders. If Lai receives a light sentence, it will negatively affect the mainland's pledge to curb corruption," said Ong.

As early as 2006, mainland authorities assured the Canadian government, including a personal pledge from then premier Zhu Rongji, that Lai would not be executed if returned to his native country, and formal diplomatic notes gave assurances that his trial would be public and access would be given to Canadian officials. Canadian courts turned down one early request, with the judge saying he didn't believe China's pledge not to execute Lai.

Zhu was quoted by the state media at the time as saying Lai "should be executed three times, and even so that would not be enough. Now that we have agreed that he will not be executed, that is the biggest concession we can make."

Despite those assurances, the fact Lai could stay for as long as he did in Canada reflected how the credibility of China's judicial system was viewed in the West. According to Rights group Amnesty International, China executes more people each year than the rest of the world combined. China does not release an official count.

The number was "believed to be in the thousands", Amnesty International said in a report this year, compared with 2009's second-ranked executioner, Iran, which the rights group said carried out at least 388 last year. Amnesty estimated that China put at least 1,718 people to death in 2008. As recently as last week, former vice-mayors of Hangzhou and Suzhou, Xu Maiyong and Jiang Renjie, were executed for taking bribes and abusing their official powers.

Ong, however, believed China would bring other fugitives to justice after putting people's doubts to rest by showing the world Lai could have a fair trial that meets international standards and that it has reformed its relevant laws.

About 580 fugitives allegedly involved with economic crimes in China are staying in foreign countries, Meng Qingfeng, director of the economic crime investigation bureau under the Ministry of Public Security, was quoted as saying by the China Daily.

"China has taken measures to rein in the use of capital punishment, including requiring the country's supreme court to review all such sentences before they are carried out," Ong said.

Beijing this year also removed 13 offenses from the list of 68 crimes punishable by death. The offences were economic crimes, including tax fraud, the smuggling of cultural relics or precious metals, tomb robbing and stealing fossils.

While staying in Canada, Lai led a lavish lifestyle in Vancouver where he rented an apartment in the "super upscale Coal Harbor area, drives a $150,000 BMW and dines out every night at very expensive restaurants", the "Chinese in Vancouver" website reported in 2007, citing court documents.

Restrictions on Lai's stay in Vancouver included that he not communicate or associate with members of the Big Circle Boys or the Kung Lok triad, the onus being on him to confirm non-connection of his contacts to those groups; and that he not attend a casino, the report said.

Allegations have been extensively detailed in the Chinese media that Lai supported himself in Canada with an illegal gambling operation and that he has extensive associations with loan sharking and a Chinese triad called the Big Circle Boys, the Globe and Mail reported.

Olivia Chung is a senior Asia Times Online reporter.