Making Waves, Carefully, on the Air in China

By the late 1980s, Liu was a rising star in the army and held a rank equivalent to colonel. But friends say he was passed over for a senior post and grew frustrated with the party's limits on news coverage. Looking for another career, he turned to the officials he had interviewed over the years.

One of them, a senior executive at a state-owned oil firm, wanted him to do a story about "the company's glorious history," Liu recalled. He agreed, and asked for a job in return. Soon afterward, the company named him its newest oil trader -- in Houston.

Favors and Wealth

Liu declined to discuss the Tiananmen Square massacre, but his actions at the time are revealing.

In the wake of the violent suppression of the pro-democracy demonstrations in 1989, many officials and state employees quit their jobs in disillusionment. After just a year in Houston, Liu resigned from the state oil firm, too.

Then he tried to help two friends caught in the crackdown: Wu, who was imprisoned for daring to report the massacre on state radio, and Su Xiaokang, a college classmate and dissident writer who fled into exile after police issued a warrant for his arrest.

According to both friends, Liu returned to Beijing and persuaded Yang Shangkun, then China's president, to call the minister of public security and request Wu's release. Later, Liu also helped Su get a visa to return to China for his father's funeral. Through a spokesman, Liu confirmed he tried to assist his friends, but denied any special relationship with Yang.

If Liu helped friends caught in the crackdown, he never turned against the government that ordered it. Instead, he maintained good relations with officials -- and profited spectacularly, emerging in the 1990s as one of China's richest men.

The story behind Liu's quick accumulation of wealth remains a mystery. For years, he has been dogged by rumors that the government, even the Ministry of State Security, played a role in his success. Liu laughed off such stories, but was vague about his early business deals and whether he received loans from the state, saying only that he moved to Hong Kong and made his first fortune by exporting refined oil.

China's transitional economy was full of opportunities for those with connections, and the oil industry was no exception. At the time, there were two prices for Chinese petroleum products, an official price from the planned economy and a market price, as in many transitional economies.

"If you could purchase crude oil at the official price, refine it, then export it at the market price, you're going to make millions easy," said Wu, Liu's radio colleague, who now runs Phoenix's U.S. operations. "The key was to get the deal, to get the permit. And to get the deal, you had to know the right people." For someone like Liu, he added, that was never a problem.

Liu quickly branched out from oil into highway construction, real estate, port facilities, hotels and hospitals, becoming a multimillionaire in a country where most people still make less than $1,000 a year. He keeps homes in Beijing, Hong Kong and California, and sent his twin daughters to college in the United States.

In 1993, Liu invested in a 12-hour documentary on the life of Deng Xiaoping produced by China Central Television, or CCTV, the main state broadcaster. It was unheard of for a private businessman to participate in such a sensitive project, but in a sign of both his loyalty to the party and the trust he had developed with its leaders, Liu was listed in the credits as a producer.