China continues hunt for fugitives and their assets overseas

January 12, 2016 10:26
According to the Washington-based research group Global Financial Integrity, between 2002 and 2011, China saw an outflow of US$1.08 trillion in illicit funds. Photo: Bloomberg

At a time when Chinese capital and Chinese tourists are flooding into every corner of the world, the Chinese government is seeking the return of hundreds, possibly thousands, of former officials who have fled overseas, taking with them vast sums of illicit money to their newly adopted homes.

A list of 100 wanted criminals issued by Interpol in April showed that the majority were believed to be in North America, with 40 in the United States and 26 in Canada. Some of them have been on the run since the 1990s.

Even Hong Kong, which while a part of China has a separate legal system, was suspected to shelter five. But since mainland influence is so pervasive in the former British colony, it is likely that those who initially sought haven in Hong Kong would move further afield given the chance.

China is now pressing western governments to sign extradition treaties. But even in the absence of such treaties, the Chinese government is calling for cooperation.

The lack of extradition treaties doesn’t mean that fugitives and their ill-gotten gains are necessarily safe. In fact, the official English-language China Daily newspaper recently quoted the Canadian ambassador to China, Guy Saint-Jacques, as saying in an interview that Canada and China would sign an agreement in the next few months to share the assets that Chinese fugitives have moved illegally into Canada.

“Canada has had very close collaboration with the Chinese government to address such issues,” the ambassador was quoted as saying. “We have no desire to harbor fugitives, and we don’t want to be known as welcoming fugitives.”

One of China’s most-wanted is a man known in Canada as Michael Ching Mo Yeung, a prominent Vancouver property developer, a permanent resident though not a Canadian citizen. He is known in China as Cheng Muyang.

Ching is also a Hong Kong permanent resident. He was chairman of the Hong Kong-incorporated company Gard D’Aire International Ltd., which was set up in 2003 and was dissolved five years later.

Western governments, armed with information provided by Beijing, are moving to deport Chinese who had entered their country illegally.

This appears to be what the United States plans for Yang Xiuzhu, former deputy mayor of Wenzhou, in Zhejiang province, who tops the 100 most-wanted list.

She is accused of having taken US$41 million in bribes and the Americans apparently planned to deport her for having allegedly entered the country by using a fake Dutch passport.

However, last week the Chinese news agency Xinhua reported that she has applied for asylum. Even if the application is ultimately rejected, it is likely to delay deportation proceedings.

Other wanted suspects, too, may adopt similar strategies. Moreover, China is known for torturing suspects to obtain confessions so foreign governments, before returning fugitives to China, may seek undertakings from Beijing to guarantee fair trials and to forsake the death penalty.

Michael Ching is understood to have submitted an application for refugee status in Canada. He has accused the Chinese authorities of having obtained evidence against him by torturing two of his alleged business associates.

The Vancouver Courier, in an April 29 report by Bob Mackin, disclosed that Ching had filed a statement of claim against the Canadian government in 2012 for C$1.75 million (US$1.23 million) in damages in which he alleged that the Chinese authorities had been in touch with the Canadian Embassy between 2001 and 2004 and that China’s Ministry of Public Security had asked the Canadian government not to grant him citizenship.

Ching’s applications for Canadian citizenship in 2001 and 2004 were denied.

While the list of 100 underlines China’s desire to see the repatriation of corrupt officials for trial, it is only the tip of the iceberg as hundreds of other Chinese fugitives are already being sought by Interpol. Last year, China claims to have successfully obtained the repatriation of 680 fugitives.

The amount of money leaving China illicitly is staggering. According to the Washington-based nonprofit research organization Global Financial Integrity, between 2002 and 2011, China saw an outflow of US$1.08 trillion in illicit funds. Russia, with an outflow of US$88 billion, was in second place.

China’s failure to deal with systemic corruption has become a problem for the rest of the world, just like its problems with food safety, censorship, disease and the environment.

China now seeks the help of other countries to clean up the huge mess that it has created through the export of corrupt officials who had abused their power in a system without checks and balances or the rule of law.

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Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.