Bandit or . . . Entrepreneur?

People such as Lai Changxing are building the new China -- for better or worse.

INSIDE THE RED MANSION

On the Trail of China's Most Wanted Man

By Oliver August

Houghton Mifflin. 268 pp. $26

In a nation of unjust laws and arbitrary state authority, corruption can take on the patina of civil disobedience or rebellion. Yet the entrepreneurs who engage in bribery and kickbacks in the People's Republic of China are rarely idealistic. They're drawn instead to the glitter of money, gaudy nightclubs and kitschy houses, big cars and big meals.

That dichotomy lies at the heart of Oliver August's Inside the Red Mansion, a book that celebrates the underside of Xiamen ("shyah-MEN"), a coastal boomtown, while taking readers on a search for Lai Changxing, one of its most infamous businessmen. An illiterate farmer who turned himself into an import and real estate tycoon, Lai ran afoul of the authorities and fled from corruption charges before the author, a former Beijing bureau chief for the Times of London, ever set foot in the city.

August infuses the missing Lai with social and political significance, comparing him to a 17th-century smuggler who ruled the area and to characters in the classic Chinese novel Dream of a Red Mansion, the chronicle of an 18th-century noble family's dissolution and decay. August also divines motives and personality from shards of Lai's life excavated from interviews with acquaintances and family.

For August, Lai comes to embody hope and people's ability to reinvent themselves. When we finally meet Lai, however, he seems an unlikely vessel for all that significance; he is more concerned with the size of his television set and with visiting casinos than with man's fate in China. This could have been a fatal flaw in the book, but in the process of searching for Lai, August gives us a colorful sense of Xiamen and a microcosm of the upheaval in Chinese society.

The big question implicit in the story of Xiamen and Lai is whether China can build an orderly society out of its haphazard economic reforms. Corruption may be the No. 1 obstacle because it is more than just a way to circumvent or subvert the ruling Communist Party. It is also a habit that could undermine the country's long-term development. The recent scandal over tainted exports is just one, unsurprising example. Disregard for a certain set of laws can easily become disrespect for all laws.

Xiamen is an island off the coast of Fujian province. Formerly known as Amoy, it was occupied by the British during the Opium War of 1841 and remained a major port. After the Chinese civil war ended in 1949, Xiamen found itself on the front line between the communist regime on the mainland and the nationalist regime that had fled to nearby Taiwan. Its beaches were strewn with land mines and landing barriers to fend off a feared invasion.

When the threat from Taiwan receded and China's first communist leader, Mao Zedong, died, Deng Xiaoping helped make Xiamen a laboratory for free-market experimentation. The city boomed. Output doubled every three years as millions of rural migrants arrived to work in factories.

August's adventure begins in 1999 when he rents an apartment in Xiamen and starts spending up to four months a year there. He also hires a pair of young friends to help search for Lai. Along the way, he introduces the reader to his landlord, fishermen on junks, construction workers, a mid-level bureaucrat, nightclub dancers and a wealthy businessman who has made himself into the world's foie gras king (while himself preferring to eat goose livers deep fried). It's a leisurely and engaging tour.

Hustlers such as Lai have provided much of the entrepreneurial energy for places like Xiamen. Born during the disastrous Great Leap Forward, when millions of Chinese starved in a failed experiment with development, he tended fields and dug ditches during the Cultural Revolution. But with the country's economic liberalization, Lai moved to Xiamen and made car parts. Soon he was importing private cars, cutting costs by buying import licenses from state companies. He then became a distributor of foreign cigarettes and oil. Finally, he started building high-rise apartment buildings and -- as a private bordello for entertaining officials -- his own "Red Mansion."

None of that would have been possible without the cooperation of countless Communist Party and People's Liberation Army officials, most of them bought and paid for. Later, when August (and Canadian immigration officials) eventually catch up with Lai in Canada, he blames Chinese authorities for making him corrupt; he claims that when he first arrived in Xiamen as a blacksmith, he refused to pay "gratuities" and that local officials assaulted his sister in retaliation. Whatever his initial motive, Lai became a master at cultivating powerful allies and did so with panache, until a disgruntled and deeply indebted associate blabbed to the party's disciplinary wing. Then Lai's walls came tumbling down, and the reverberations rippled all the way up to the Politburo.

With Lai on the run, August slowly follows the trail. He spends an inordinate amount of time in a nightclub where young women from the countryside perform dances. He also goes on a rollicking midnight golf outing with two businessmen who have bet a plot of land on the game's outcome. And he visits Lai's hometown, where the tycoon is revered for his largesse.

August uses his initial naiveté as a device for introducing the general reader to China, describing his early language lessons and the many food metaphors that Chinese use to characterize everything from someone who won't leave his job at a state-owned firm (a guotie or potsticker) to the act of cheating on one's wife ( chi doufu or eating bean curd). Some portions of this are entertaining, while others stretch credulity, such as his assertion that a desire to avoid traffic was the reason he rollerbladed to -- and into -- the Great Hall of the People for the opening session of the National People's Congress.

In the end, he sheds his innocence and succeeds in describing a China that is, as he puts it, "at once anarchic and authoritarian," where freewheeling capitalism flourishes under the watch of the communist state, where the ruling party appears simultaneously rigid and adaptable, corrupt and yet surprisingly secure. *

Steven Mufson was the Post's Beijing correspondent from 1994 to 1998. He is now the Post's energy correspondent.