China derails North Korea's experiment with capitalism
By Ted Anthony
Associated Press
BEIJING — Maybe he was arrogant. Maybe he thought, like many of China's new elite, that the company he built and the riches he amassed would protect him. Maybe he underestimated the hazards that come from mixing economics and politics in a nation struggling to balance both.
Associated Press library photo
Whatever the case, 39-year-old Yang Bin, an obsequious, cherub-cheeked tycoon who became point man for North Korea's foray into capitalism, is in big trouble with China, the country where he was born but whose citizenship he surrendered years ago.
Yang Bin, a Dutch citizen who parlayed orchid cuttings and vegetables into a fortune upon returning, is imprisoned somewhere in China.
Yang, a Dutch citizen who parlayed orchid cuttings and vegetables into a fortune upon returning, is imprisoned somewhere in China, charged Wednesday with investment scams, offering bribes, using fraudulent contracts and the vague "illegally occupying farmland."
At first blush, Yang's fall resembles that of many Chinese entrepreneurs who got rich riding the breakneck wave of the country's new market-style economy, then fell victim to their government's crackdown on corruption and its attempts to make the investment picture appear stable.
But look closer: Though suspicions about Yang and his company, Euro-Asia Agricultural Holdings Ltd., began months earlier, they crested days after his appointment to lead North Korea's new Sinuiju special economic zone just across China's border.
In short, everything suggests Yang Bin annoyed the wrong people in Beijing.
These days, no one connected with Yang wants to discuss him.
The North Korean embassy in Beijing produces a laughing press officer who insists he's heard nothing for weeks. The Dutch embassy acknowledges it has visited Yang but will go no further.
On Thursday, police in the corruption-plagued northeastern city where Yang is based made an extraordinary statement, ending weeks of being "unclear" about the situation: They said they were no longer handling Yang's case and suggested the central government had intervened.
"It's a big case," said Zhang Jiuli, head of publicity for the Shenyang Public Security Bureau. "We don't know who is handling this, but presumably it's the Ministry of Public Security."
That implies what many surmised — that Yang attracted attention because of his volubility and his agreement, apparently without consulting Beijing, to head North Korea's experimental Sinuiju economic zone.
It could also signal China's wariness about longtime ally North Korea and its skittishness about having competition in the admittedly narrow category of Asian communist nations experimenting with capitalism.
Yang moved to the Netherlands in 1987 and won asylum after the 1989 Tiananmen Square democracy protests. He ran a textile business for seven years before returning to China with $20 million to start a cut-flower business that grew into Euro-Asia's high-tech orchid operation.
Though dogged by tax allegations, he was expansive and confident early last month after North Korea tapped him to run Sinuiju, designed to be a capitalist pocket of a communist nation — much like such cities as Shenzhen have been to China.
But the tapestry quickly frayed.
Yang invited reporters to North Korea without visas, but had to backtrack when Pyongyang balked. While China was cordial but cool about the project, Yang chain-smoked, hosted journalists in Shenyang and pledged imminent access to Sinuiju.
"In China, businessmen who seek publicity, it's usually not a good sign. If somebody has a strong cash flow, they'll keep a low profile," said Andy Xie, managing director of Morgan Stanley Asia Ltd. "He got the senior leaders' attention with Sinuiju."
When Yang's tax situation started making news again, he shrugged it off with a "no problem." Days later, he was "summoned" by Shenyang police. House arrest followed.
It's unclear what penalties Yang might face. The Foreign Ministry says he is being treated "in accordance with the laws."
Shenyang-based Euro-Asia, meanwhile, is in tatters. It has been suspended from trading on Hong Kong's exchange and closed its office there. "In China, if you want to be involved in politics, there's only one sphere. And it's not the communist party of North Korea. It's the Communist Party of China," said Wu Guoguang, a political scientist at the Chinese University of Hong Kong and a one-time aide to deposed Communist Party General Secretary Zhao Ziyang.
