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Chinese Millionaire on Trial for Corruption - 2003-06-11

China's second richest man went on trial Wednesday, facing corruption charges that could send him to prison for many years.

The trial is set in China's gritty northeast city of Shenyang, where Chinese-born Dutch citizen Yang Bin made some $900 million dealing in property, tourism and flowers.

He is accused of bribery, lying to officials about the financial health of his company, and misusing farmland.

A member of his six-member defense team says the trial is likely to last two days.

Mr. Yang was detained last October, only days after he was named to head a free-trade zone for North Korea just across the border from China. North Korea hoped the capitalist-style enclave would rev up the communist country's stagnant economy, in the same way special economic zones have helped invigorate China's fortunes over the past two decades.

However, North Korea appointed Mr. Yang governor of the Sinuiju region, where the free-trade zone was to be built, without consulting China. Some press speculation says the arrest was Beijing's way of expressing its displeasure at being ignored.

But other news reports say Mr. Yang's business practices had attracted official concern and scrutiny before he was named to head the North Korean venture.

China's Foreign Ministry insists that Mr. Yang's trial is about breaking the law, not politics or personal sensibilities.

Foreign Ministry spokesman Kong Quan says the court's judgment of guilt or innocence will "base everything on facts, and everything according to law."

Mr. Yang's trial coincides with the high profile investigation of Shanghai property tycoon Zhou Zhengyi. He faces questions about allegedly lying to obtain millions of dollars in bank loans for his business operations.

These legal actions against some of China's wealthiest men appear to be an effort by the government to rein in the growing power of the country's entrepreneur class.

At the same time, the leadership is seeking to harness the entrepreneurs' energy. Late last year, fundamental rule changes were made that will allow some capitalists to become members of the Communist Party.