- The Washington Times - Friday, October 11, 2002

From combined dispatches

SHENYANG, China Tycoon Yang Bin's brief tenure as head of Pyongyang's experimental capitalist enclave looked increasingly precarious yesterday as China and North Korea held talks that seemed likely to shunt him aside.

China has sent an envoy of vice-ministerial rank to North Korea to explain why it detained Mr. Yang last week, a Beijing government source told Agence France-Presse. The detention prompted reports of a rift between the neighbors and usual allies.

"I know they sent someone to North Korea after the arrest of Yang Bin," said the source, an academic at a think tank under China's Cabinet, the State Council.

Reuters news agency had reported Wednesday, citing a Western diplomat in Beijing who did not want to be named, that a vice-ministerial level delegation was in Beijing to discuss the arrest of Mr. Yang, born Chinese, a naturalized Dutch citizen and holder of a North Korean passport as of last week. He reportedly does not speak Korean.

The Foreign Ministry in Beijing refused to confirm or deny the reports yesterday, saying only that it had "frequent" contacts with Pyongyang.

China put the multimillionaire under house arrest last Friday reportedly for tax offenses amid reports Beijing was angry it had not been consulted before Mr. Yang was named Sinuiju governor late last month.

Since then, the two countries reportedly have engaged in a frenzy of activity, apparently trying to repair any damage.

Mr. Yang's chief spokesman in Beijing told the Associated Press yesterday that police have ordered him not to talk about his boss.

"The police told me yesterday morning that I cannot talk to reporters about Mr. Yang unless they have official permission from the police," said Duan Xiaohong. "I have to follow the rules."

Although there has been no official comment from either side on what will happen to Mr. Yang, it seems increasingly implausible that China will let him take up his duties as governor of the Sinuiju Special Autonomous Region, on North Korea's border with northeast China.

"It will be impossible for North Korea to talk China into letting Yang go and continue serving as governor of Sinuiju," the Beijing government academic told AFP, asking not to be named.

"He has conducted illegal activities in China, so China must take action against him," he said, adding that Mr. Yang will likely face trial rather than deportation because his reputed crimes may implicate corrupt officials.

Pyongyang would not make much of a fuss either, the academic said.

"There's nothing North Korea can do. Right now it can't afford to jeopardize relations with China," he said.

Mr. Yang's detention came less than two weeks after he announced that he had been given sweeping powers to develop a Hong Kong-style capitalist zone in Sinuiju.

His location remains a mystery, with the Dutch Embassy in Beijing saying yesterday it had received no information since being told last Friday that Mr. Yang was "under surveillance" in Shenyang, northeast China.

There were few signs of life yesterday at Mr. Yang's company headquarters in Shenyang.

"We don't know anything about where he is," said a receptionist at Euro-Asia Agricultural Holdings.

Mr. Yang, now 39, obtained political asylum in the Netherlands after the 1989 pro-democracy protests in Beijing's Tiananmen Square and ran a textile business for seven years before returning to China with $20 million to start a cut-flowers business.

In a few years, he amassed a fortune as his Hong Kong-listed Euro-Asia Agricultural Holdings Co. invested in high-tech research to enhance production of orchids and other flowers. The chain smoker is known for his flamboyant lifestyle, including expensive cars and a private jet.

The opulent entrance lobby of his headquarters in Shenyang is a testament to better times, featuring photographs of Mr. Yang meeting financier George Soros and Chinese Vice Prime Minister Li Lanqing among others, and a vast reproduction of an edition of Forbes magazine last year identifying him as China's second-richest man.

But with Euro-Asia's plummeting shares now suspended on the Hong Kong stock exchange, Mr. Yang is now likely to be worth far less than the $900 million cited by Forbes.

CNN reported soon after the Yang arrest that sources in Shenyang had pointed to internal factional infighting before the China's Communist Party congress next month. Mr. Yang has not disguised his personal ties to senior cadres including Mr. Li, whose term ends at the congress, and Liaoning Gov. Bo Xilai, a rising star in the party.

The network said it was believed that Mr. Yang had sought the patronage of the North Korean leader in view of the diminution of his domestic "power network."

An official with Shenyang police who answered the telephone yesterday told AP he "was not clear about the case" and refused to provide any details.

The reasons behind the investigation aren't clear, but official media say authorities have ordered Mr. Yang to pay back taxes. Last week, the millionaire said he had reached a deal with tax authorities to pay $1.2 million.

There has been speculation that China wanted to register its displeasure with North Korea over its hiring of a man whose dispute with Chinese tax authorities has become well-known.

However, Foreign Ministry spokeswoman Zhang Qiyue repeated yesterday that the case against Mr. Yang was "completely unrelated" to his North Korean project.

She said that Mr. Yang was suspected of "involvement in various illegal activities," but refused to elaborate on details of the case or the terms of his detention.

Miss Zhang said she had no information about reports that Mr. Yang could be deported to North Korea or that a North Korean representative was in Beijing to discuss the case.

A North Korean delegation led by Vice President Yang Hyong-sop is to visit China next week, providing a possible venue for talks on Mr. Yang's case.

Miss Zhang said China had reported to Dutch diplomats on the status of Mr. Yang's case as required by a consular treaty.

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