The wrath of Zhu

THE BIGGEST ENEMY of Lai Changxing is Zhu Rongji, China's premier, who refers to Lai as 'turtle's egg', an extremely foul Chinese term of abuse.

For Mr Zhu, one of the most honest men in the Government, Lai is not only an evil man who has corrupted hundreds of officials with women, cars, homes and bribes, but an economic virus that has cost the budget 30 billion yuan (about HK$28 billion) in lost taxes and driven hundreds of legal companies into the red.

Mr Zhu has been the driving force behind catching Lai and closing his Yuan Hua company, which is alleged to have conducted smuggling operations from 1994 to 1999 that brought into China 53 billion yuan worth of cars, crude oil, petrochemical products, electronics, plastics, steel materials, cigarettes and munitions.

Mr Zhu knew about Lai as early as 1995, according to a new book that has just appeared in Hong Kong, Si Xiao (The Fierce Smuggler), written by Huang Jie and released by Cosmos books, a publishing house with close ties to Beijing.

As Vice-Premier, Mr Zhu received reports from officials in Xiamen, including some within the customs department, and from state companies that were losing sales because of the smuggled goods. Because the military were involved, Mr Zhu took the case to Liu Huaqing, then China's top general and vice-chairman of the Communist Party's central military commission. Mr Liu, who has been implicated in the scandal but not arrested, effectively told him to mind his own business. Mr Zhu had no choice but to bury his anger and wait for another day.

The biggest damage Lai did to the economy was in cars and petrochemicals. With import duty on cars of 80 to 100 per cent and every company chief and senior official yearning for a prestigious foreign model, the profit margin on smuggled cars is enormous.