Catalyst for icing bilateral relations
Some five years have passed since Yang Bin was hauled off by the Shenyang Police in the early hours of October 5, 2002, and subsequently sentenced to 18 long years in jail.
During this period, many events and dramatic changes have occurred on the Korean Peninsula. Just five hours after Yang Bin was “summoned for questioning,” Lee Kan, the Deputy Director of the United States Office under North Korea’s Ministry of Foreign Affairs, informed James Andrew Kelly, the U.S. Special Envoy, that North Korea was developing nuclear weapons. This triggered the so-called North Korean “nuclear crisis.”
Many international experts believe this act was taken to express North Korea’s dissatisfaction at the intense pressure that Kelly—also a Deputy Secretary of State—had been applying. Some scholars also said that this was a necessary move for a small country in its fight against a superpower.
But there are North Korea specialists who say that, to the contrary, the announcement was made to Kelly in order to express North Korea’s anger at the sudden arrest of its newly designated SAR Chief Executive.
According to Article 2 of the Treaty of Friendship, Cooperation and Mutual Assistance between the People’s Republic of China and the Democratic People’s Republic of Korea (1961), “The two signatories guarantee to take all measures to prevent acts of aggression by a third country against either of the signatories. If either signatory comes under attack from one or more other countries, and thus is in a state of war, the other signatory should do its best to provide military and other types of assistance.” In effect, this was a guarantee of North Korea’s security.
North Korea’s announcement of its plan to arm itself with nuclear weapons effectively meant that it no longer trusted China to come to its aid if in need—or at least, such was the viewpoint of some scholars and observers.
In the wake of this announcement and increased tensions on the Korean Peninsula, the international community began to try to calm things, and in particular, China did a lot of work. But there were many ups and downs: the Four-Party Talks and the Six-Party Talks, the Missile Crisis, North Korea’s nuclear testing, United Nations’ sanctions, North Korea’s agreement to abandon its nuclear program, summit talks between North and South Korea, the “secret letter” diplomacy between the United States and North Korea, and more.
One significant bright spot occurred on December 11, 2007, when Zubin Mehta, head of the New York Philharmonic Orchestra, and Pak Gil-Yon, North Korea’s Ambassador to the United Nations, announced the orchestra would perform in the East Pyongyang Grand Theater on February 26, 2008. The repertoire would include Gershwin’s “An American in Paris” and the national anthems of the two countries.
This prompted South Korea’s Yonhap News Agency to run an article entitled “Will the Philharmonic performance serve as a signal of a thaw in relations?” and commented, “North Korea will permit an orchestra from the United States, a country that refers to North Korea as an ‘axis of evil’, to play the U.S. national anthem in Pyongyang. This is really a momentous change. We hope that the performance will be successful, and will lead to a breakthrough in relations between the United States and North Korea, just like the ‘ping-pong diplomacy’ between China and the United States more than 30 years ago that ultimately led to formal diplomatic relations.”
Relations between North Korea and the United States are improving to a certain extent. This is undisputable. There will be more ups and downs, but ultimately they should culminate in peaceful co-existence.
During October 2-4 2007, South Korea’s President Roh Moo-Hyun visited Pyongyang. This was the second set of summit talks between the Koreas. The two sides issued a joint declaration calling for “three or four countries” to work together to conclude a Korean Peninsula peace agreement.
The initiative to reach a permanent cease-fire agreement by “three countries” was due to Kim Jong Il’s insistence on limiting the players to North Korea, South Korea and the United States. He claimed “there has been no Chinese military on North Korean soil for a long time now” (the Chinese People’s Voluntary Army withdrew entirely in 1958).
Observers of North Korea commented that the “three-country initiative” was a clear expression of Kim Jong II’s dissatisfaction over the “Yang Bin Affair” and his view that “China is unreliable.” Roh Moo-Hyun, for his part, thought it “better to let China take part”. That was the reason behind the reference to “or four countries.” However, after Roh Moo-Hyun returned home, a spokesperson for the President’s Office said, “We are not concerned about whether China will or will not participate.”
So what about relations between China and North Korea?
During January 15-20, 2001, Kim Jong Il, General Secretary of the North Korea Workers Party, visited China. In particular, his four-day visit to Shanghai impressed him. When he met Jiang Zemin in Beijing, he emphasized “Since the introduction of reform and the policy of opening to the world, China, especially Shanghai, has made overwhelming progress. This proves that the policy of reform and opening up carried out by the Communist Party in China has been correct.”
At that time, one could say that bilateral relations were moving in a positive direction. Things soured later and this can be put down to the Sinuiju SAR and the “Yang Bin Affair.”
People throughout North Korea were looking forward to the establishment of the Sinuiju SAR, and when—due to China’s arrest of the Chief Executive—the project was put on the back burner, the nation’s heart was collectively hurt. Relations cooled from that moment, and since then North Korea has continued to take advantage of certain occasions, right up until today, to express its dissatisfaction.
On November 23, 2007 the Chinese-language Boxun web site published an article by Zhang Ying, “The Yang Bin Affair and the Six-Party Talks—the Hidden Trigger behind North Korea’s Nuclear Weapons Test.” I would query the authenticity of some of the sources cited in the article, but other North Korea experts also hold some of the views he expressed.
In Zhang Ying’s opinion, “Yang Bin’s case is not an isolated incident. It continues to impact relations between East and West in the post-Cold War era, particularly in terms of the tension between two socialist countries, China and North Korea. The Yang Bin affair was the catalyst that led North Korea to resume testing nuclear weapons. On the one hand, this move was North Korea’s response to China’s illegal detention of its senior official, but it was also an opportunity to drag the only superpower, the United States, into the game by with its “nuclear bluff.” Marathon six-party talks (China, the United States, North Korea, South Korea, Russia and Japan) were then initiated in Beijing and continued over more than four years. In the sixth round, we expect to see North Korea ‘disable its nuclear facilities’.”
Zhang Ying believes that the Yang Bin affair triggered North Korea’s nuclear testing. “Some respected current affair commentators in the mainland, Hong Kong and Taiwan have recently discussed the reasons behind North Korea’s nuclear testing. They share the view that President George W. Bush had claimed that ‘Iraq, Iran and North Korea are an ‘axis of evil’, and that North Korea was unwilling to be regarded as ‘one of the three rogue states’. That was why North Korea conducted the nuclear test. But it was in his State of the Union of September 2000 that Bush qualified North Korea as a rogue state, and yet some three years and eight months passed before North Korea publicly acknowledged its nuclear test. The United States waged war against Iraq between 2000 and September 2002, so why didn’t North Korea conduct a nuclear test back then? Obviously, because the Yang Bin affair had not yet occurred.”
This commentary has a certain logic to it. At least, one can say that the Yang Bin affair was one element driving North Korea’s actions.
Zhang Ying also notes that the establishment of the Sinuiju SAR was inspired by Chinese policy. “North Korea believed that in setting up the Sinuiju SAR it was following the recommendations of several generations of leaders in China. Beginning with the visit of the former Chairman of the CPC Central Committee, Hua Guo-Feng; to conversations between Deng Xiao-Ping and Kim II Sung; to visits to North Korea by two Secretary-generals of the CPC Central Committee, Hu Yao-Bang and Zhao Zi-Yang; to the visit of General Secretary Jiang Zemin to North Korea, and during Kim Jong II’s visit to China, all these Chinese leaders urged North Korea to reform, to open up to the world, and to establish the Sinuiju SAR.”
In fact, there is no written record in the public domain to confirm that the leaders of the CPC Central Committee recommended that North Korea establish the Sinuiju SAR, so we can only “file this away” for confirmation at a later date. But one thing is certain: China hoped that North Korea would open up to the outside, and that its economy would prosper so that the North Korean people could live a better life, and China would have a wealthier neighbor. These hopes follow naturally from China’s strategy of pursuing its rise as a peaceful nation and one that practices peaceful diplomacy.
“Relations between China and North Korea gradually became more distant,” continues Zhang Ying’s article. “As the saying goes, ‘It takes more than one cold day for the river to freeze three feet deep.’ If nothing else, the Yang Bin affair added a quick-freezing agent to the mix. The Yang Bin affair triggered North Korea’s nuclear testing, which in turn led to the Six-Party Talks in Beijing. That is to say, the Yang Bin affair was the catalyst behind the Six-Party Talks. Without the release of Yang Bin, the Six-Party Talks were bound to go nowhere. Or at least the talks were stuck in a marathon race. That was the internal logic driving the talks.” Some international observers do share Zhang Ying’s view here, but it is not a “mainstream” view.
Zhang Ying believes that North Korea’s resumption of nuclear testing was a sign that North Korea had “given up any illusion of protection under China’s co-called ‘nuclear umbrella’, and intended to unseal the Yongbyon nuclear reactor deactivated under the 1995 agreement made with the Clinton administration. It planned to use its own nuclear deterrent force to resist nearby major powers such as China and Japan.
“This method of “using nuclear blackmail,” i.e., ‘nuclear deterrent power’ as a ‘measure of self-defense’ was bound to lead the Bush administration back to the negotiation table and to force the United States to dialogue direct with North Korea. Ultimately, this would bring about the normalization of diplomatic relations between North Korea and the United States. It intended to play the U.S. card to contain China.”
Many foreign scholars assumed China was playing the North Korean card to contain the United States. How did this evolve into a situation where North Korea was playing the U.S. card to contain China? Zhang Ying believes that the Yang Bin affair was the driver behind this phenomenon.
Zhang Lian-Gui, Professor at the International Strategic Studies Research Institute (Central Party School), frequently exchanges views with me regarding North Korea (see also Postscript: Yang Bin and his Experiment in this book). He points out that North Korea’s practice of making pronouncements about nuclear weapons to express its dissatisfaction with neighboring countries did not begin in the 1990s, when what it is often referred to as the “first” North Korean nuclear crisis occurred during the Clinton administration.
Professor Zhang notes that in 1965 the Secretary-general of the Japanese Communist Party, Kenji Miyamoto, visited China and urged it to cease its ideological debate with the Soviet Union. Instead, these two countries should unite to fight jointly against the United States. This proposal was rejected by the Chinese Communists, and Miyamoto went on to visit North Korea and confer with Kim II Sung. To the contrary, the Miyamoto and Kim Il Sung reached a consensus and issued a joint statement promising to cooperate in resisting the Americans. Relations between the China Communist Party and its Japanese counterpart came to a halt as a result.
Relations between China and North Korea also grew more distant. Open debate between China and North Korea, and their respective Communist Parties, became very tense. At that time as well, North Korea declared that it would develop nuclear weapons; the announcement targeted not just the United States, but China too. Similarly, on October 4, 2002 when the Korean diplomat Lee Kan informed the U.S. Special Envoy James A. Kelly that North Korea was developing nuclear weapons, this message was intended to show dissatisfaction with both the United States and China. A classic example of “killing two birds with one stone.”

At 5:15 am, October 4, 2002, Yang Bin was taken away by the police.
At 8 a.m., North Korea’s diplomat Hwang Myong Chol took breakfast with us in Holland Village’s Hague Hotel. This was the first time for him to eat with us alone, minus Yang Bin. At that time Vice-presidents Li Gang and Shi Jun, and others who had participated in negotiating the Sinuiju Basic Law, including Ma Ning and Yang Da-yong, were also present.
“After President Yang was taken away by the police at 5:00 a.m., Marshal Kim learned of it at 6 a.m,” said Hwang. “Director Kim Dongkyu in Sinuiju was also informed. He said this move wasn’t aimed at President Yang, but at us. This caused us to lose face before the whole world.” After finishing this sentence, he looked at us sadly. We all kept silent.
I recall that in June 2002, at the request of Yang Bin, North Korea had twice informed Pyongyang’s Chinese Embassy of its decision to establish the Sinuiju SAR and designate Yang Bin as Chief Executive. Officials at the Chinese Embassy expressed support for the Sinuiju Special Administrative Region, but reportedly did not approve of Yang Bin’s appointment. They proposed that North Korea consider other candidates.
According to Kim Dongkyu, the man who headed the North Korean Delegation for the Sinuiju negotiations, at that meeting the Foreign Affairs Ministry staff insisted that if China wanted to show real support for Sinuiju, it should support Yang Bin’s appointment too. This would be a litmus test of bilateral relations.
The Chinese Embassy officials queried on whose behalf the ministry staff was speaking. “Every word I have uttered today has been approved by the Marshal,” he replied. “Some of these words are exactly those of the Marshal.”
On September 12, 2002, the Standing Committee of the Supreme People’s Assembly of North Korea promulgated Decision 3303, thereby establishing the Sinuiju SAR and bringing the SAR Basic Law into effect. On September 24, the Standing Committee held a plenary session in Pyongyang’s Mansudae Assembly Hall at which Kim Yongnam, President of the Presidium, formally presented Yang Bin with the SAR Chief Executive Letter of Appointment.
Like his international counterparts, the Pyongyang-based China Envoy joined in the celebration banquet. At a press conference held on the same day, Chinese Foreign Ministry Spokesperson Zhang Qi-Yue said: “We note that North Korea has announced the establishment of the Sinuiju SAR. We welcome and support North Korea’s new initiative in economic development.”
Yet just ten days later, Yang Bin, the newly designated Chief Executive of the Sinuiju SAR of North Korea, was taken away by the Shenyang Police. This unexpected incident sent a shockwave throughout North Korea. As Hwang Myong Chol put it, “This caused us to lose face before the whole world.” The Koreans are a people who hold the concept of “face” in high esteem, which is typical of Asian culture, as well as China.
Just three days after Yang Bin’s arrest, the Deputy Chairman of the Standing Committee of the Supreme People’s Assembly, Yang Hyong-sop, led a team of representatives from the North Korea Workers Party and a North Korean Government Delegation on a visit to China. I believe this was related to the “Yang Bin Affair.” After Yang Hyong-sop’s return, the official North Korea News newspaper and radio and TV stations repeatedly publicized the “Glorious Deeds of Yang Bin,” dubbing him “a Great Warrior of International Communism” and a “contemporary Norman Bethune.”
In “The Yang Bin Affair and the Six-Party Talks—the Hidden Trigger behind North Korea’s Nuclear Weapons Test” Zhang Ying wrote of Yang Hyong-sop’s visit to China and his request for the release of Yang Bin. “Yang Hyong-sop and his party negotiated with China to release Yang Bin, but to no avail. He became angry and left Beijing for Pyongyang. The Central Committee of the North Korea Workers Party, the Supreme People’s Assembly, and the Cabinet were in an uproar. There was a massive wave of anti-China feeling asserting that ‘China was completely unreliable.’ Proposals were made to ‘resume nuclear testing’ and ‘play the U.S. card to contain China.’”
I am not sure of the accuracy of some of the sources cited in the article. But one thing is certain: Due to the loss of North Korea’s face in the international arena over the “Yang Bin Affair,” the full-fledged opening of the Sinuiju SAR was shelved. That relations between China and North Korea therefore cooled and became tense is obvious.
When the Chinese Foreign Ministry Spokesperson Zhang Qi-Yue expressed “welcome and support” for the establishment of the SAR, she was speaking on behalf of the Chinese Government. But the Shenyang Police arrested Yang Bin, and he was sentenced to 18 years in prison by the highest court in Liaoning Province.
And so, I wonder: Was it a net gain for bilateral relations to become so tense over an individual named Yang Bin? We often say that no matter how important an individual’s issue, it is always a small issue; but anything that impacts a nation’s interests is bound to loom large. I remain puzzled. When this foreign businessman Yang Bin carried out business activities in China, what laws did he violate that could be more important than our national interests?
One observer of North Korea told me, “Yang Bin is a ‘jie’ for relations between China and North Korea.” (translator’s note: In weiqi (traditional Chinese chess), the “jie rule” means that once one player takes the “jie,” his opponent cannot recapture it immediately)
However, this “jie,” or stalemate, impacts both parties. But how to make it a dynamic one, rather than static? How can a win-win outcome be achieved for both sides?
At the 17th National Congress of the Chinese Communist Party, General Secretary Hu Jin-Tao said this about diplomatic policy: “We insist on the equality of all countries, big or small, strong or weak, rich or poor. We respect the rights of people in all countries to choose their path of development independently. We do not interfere in the internal affairs of other countries. We do not impose our will upon others.” “China will never harm others so as to benefit itself.” “We will continue to implement the policy of being a good neighbor and partnering with surrounding countries. We will strengthen our friendly relations with neighbors and seek inter-regional cooperation, so that all of us can create a peaceful, stable, equal, trustworthy and mutually advantageous environment together.”
This is China’s commitment to the international community and neighboring countries. And that, of course, includes North Korea.
Ultimately, the “Yang Bin Affair” will be resolved. Hopefully, it will be a win-win outcome.

Re-examining the “Yang Bin Case”
Below, I will not reiterate the “Yang Bin Affair” from the perspective of politics or international relations. Instead, I want to explore the “Yang Bin Case” more deeply from the perspective of Yang Bin’s “violations” of commercial laws.
In Chapter 13, The Yang Bin Case Goes to Court, I disclosed the notes I took in court including the Prosecution’s arguments, statements by witnesses for the Prosecution, the Defense’s arguments, Yang Bin’s statement in his own defense, and the Judgment of the court of second-instance. I believe that readers can judge what is right and wrong by themselves.
In July 2004, the Korean version of my book, The Unfortunate Prometheus, was published in Seoul. I went to South Korea for a month as a visiting scholar and participated in the book’s launch ceremony. I was invited to speak at the National Assembly Hall, and gave a speech entitled “The Sinuiju SAR: A Look at Kim Jong Il’s Policy of Reform and Opening.” I also spoke at seminars held for me by universities and associations there.
I was also interviewed by KBS TV, Yonhap News Agency, East Asia Daily Newspaper, Chosun Daily News, and other media. They were intensely concerned about the reform and opening up of North Korea, in particular the Sinuiju SAR and the “Yang Bin Affair.”
For me, the most difficult question to answer was this: “The Chinese Government expressed support for North Korea’s Sinuiju SAR, so how come it arrested Yang Bin?”
“During the course of his business activities, he violated certain Chinese laws,” I replied.
A member of South Korea’s National Assembly, and a former lawyer then asked, “I have found that in Mr. Guan’s book several criminal charges are made concerning conduct that does not constitute a ‘crime’ in other countries. Such charges include withdrawal of registered capital, and illegal occupation of agricultural land. In fact, the latter was approved by your government, although Yang Bin still owed certain fees. So why was he given such a heavy sentence of 18 years in prison? Obviously, the arrest of Yang Bin targeted the Sinuiju SAR.”
At the time, I couldn’t think of how to respond. “Yang Bin violated Chinese law. Chinese laws are formulated according to China’s own domestic conditions. South Korean laws are based on its domestic conditions. Each country’s laws differ.”
In fact, the six charges of which Yang Bin was found guilty by both the Shenyang Intermediate People’s Court and Liaoning Provincial High Court would not withstand scrutiny, and were extreme even according to Chinese law.
At the end of Chapter 12, “End of a Legend,” I commented, “We should have faith that China’s system of law is fair, open and transparent.” I still insist on this. History will render its own fair judgment.
For convenience’s sake and to ensure that the reader can understand Yang Bin’s case in a clearer and more concise manner, let me summarize again the six charges laid against Yang Bin by the Prosecution: (1) Fictitious investment; (2) Illegal occupation of agricultural land; (3) Contractual fraud; (4) Forgery of financial documents; (5) Bribery of a government body, and (6) Bribery of staff in a government body.
Of the six counts, the third, fifth and sixth relate to conduct undertaken in order to resolve “the problems caused by Euro-Asia’s illicit creation of farmland to compensate for agricultural land it occupied for non-agricultural purposes.” This triggered the alleged offenses of “contractual fraud” and “bribery,” so we can reduce the counts to a total of four.
Regarding these four counts, Yang Bin’s lawyer, Cao Shu-Chang of King & Capital Law, made a brief statement. The statement is reproduced below for reference:

The Yang Bin Case:
Main Points of the Defense

Yang Bin, of Chinese ancestry and a citizen of the Kingdom of the Netherlands, was placed under house arrest in Shenyang on October 4, 2002, and formally arrested on November 27, 2002. His case was heard in an open trial in the Shenyang City Intermediate People’s Court during June 11-13, 2003. The court found the Defendant guilty of all six charges, and sentenced the Defendant to 18 years of imprisonment. On September 6, 2002, the Liaoning Provincial High People’s Court maintained the judgment made by the court of first instance. Yang Bin is now serving his sentence.
As Yang Bin’s Defense Lawyer, I believe there were issues with how this case was handled. Based on the relevant facts and laws, I present the main points of my argument as follows (my views relate only to the punishment of incarceration):

I. In addressing the charge of “fictitious investment” cited in the Indictment, it was determined during the trial that the Defendant’s conduct constituted the crime of “false capital registration,” and he was sentenced to two years of prison for it. Regarding this charge, the defending lawyer put forward basic facts with supporting evidence to prove that: 1) Between July 2001 and September 2002, investment totaling 700 million yuan was injected into the “Holland Village” project. This basic fact objectively negates the charge that there was subjective intent on the part of Yang Bin to undertake “fictitious investment” or to “falsify capital registration,” because the actual capital injected—700 million yuan—was far more than the so-called “fictitious investment” or “falsely registered capital” of 200 million yuan; 2) There is evidence to show that the shell companies set up by Yang Bin existed in order to meet the requests of local officials who wanted to fulfill their quotas for “foreign investment.” This can also negate Yang Bin’s subjective purpose to commit this crime. Therefore, there are no grounds to determine that a crime was committed as charged.
II. The Judgment determined that Yang Bin was guilty of “contractual fraud” and sentenced him to ten years of imprisonment for it. The crime specified in the Judgment can be objectively divided into two phases: Firstly, the phase when Yang Bin purchased land in order to continue his development project; secondly, the phase when the land earlier purchased by Yang Bin was then bought up by the Provincial Land Regulation Center. An objective analysis of these two phases can serve to refute the viewpoint expressed in the Indictment, and the determination of guilt in the Judgment.
1. There is evidence to prove that the aim of Euro-Asia Industrial Company to purchase the “land” (farmland created “under false pretences”) was to continue the firm’s development project. As Yang Bin and his staff in Euro-Asia Industrial Company were not familiar with the national land policy, they consulted with Li Ye, the former Deputy Director-general of the State Land and Resources Department of Liaoning Province, and with Zhang Jia-Xu, a cadre in the same organization. From these two officials, they understood that in order to acquire farmland, the same quantity of new farmland must be created to maintain a “balance.” New land creation could also be achieved by purchasing new farmland that had been readied for cultivation by a third party. Therefore Euro-Asia Industrial Company entrusted Zhang Jia-Xu with this matter.
Evidence in the case files indicates that: 1) The farmland purchased by Euro-Asia Industrial Company in Weizigou, Woniushi town, Faku County of Liaoning Province, covering more than 264 acres, was objective and genuine. This land had not been registered in the local cadastral records; 2) In the course of purchase, the two parties went through a negotiation process. There was no cheating of anyone by anyone; 3) Euro-Asia Industrial Company paid 1.2 million yuan for the purchase, and received a Land Purchase Invoice for the amount of 980,000 yuan.
The above evidence shows that Euro-Asia Industrial Company purchased farmland prepared by another party that had not previously been registered in the local cadastral records. Subjectively speaking, this purchase was to meet the requirements of national land policy requiring “equivalent compensation for farmland that is used for other purposes.” Objectively speaking, there was a negotiation process between the two parties and nobody was cheated.
2. There is evidence to prove that Euro-Asia Industrial Company later sold this land to the Provincial Land Regulation Center under duress. Because land policy had changed, any farmland not bought up by the Provincial Reserve Bank could not be used to replace farmland occupied for other purposes. The Provincial Land Regulation Center paid 3.166 million yuan to Euro-Asia Industrial Company to buy this land. Although the difference between the acquisition price and the original purchase price created a profit, that is quite normal in business transactions. There was no cheating, let alone fraud.
Based on the facts proved by the evidence cited above, the charge of “contractual fraud” has not been established in accordance with the law.
III. The Judgment ascertains that “Defendant Yang Bin committed the crime of bribing a government body. For this crime, he was sentenced to one year of prison. He also committed the crime of bribing staff in a government body. For this crime, he was sentenced to one year of prison.” The facts related to the above two charges basically arose from the process of so-called “contractual fraud.”
1. The Judgment ascertains that during the purchase of the land in Weizigou, Woniushi Town, Faku County of Liaoning province, the 980,000 yuan paid by Euro-Asia Industrial Company was actually a bribe for a government body. This interpretation is obviously wrong, because 1) Euro-Asia Industrial Company was not familiar with the national land policy, so it consulted with a cadre in the Land and Resources Department, and specifically entrusted him with the task of handling the land purchase. To demand that Euro-Asia Industrial Company, and Yang Bin in particular, should bear the criminal responsibility for this transaction is neither objective nor just; 2) There is evidence to show that the purpose of Euro-Asia Industrial Company in purchasing the land was to meet the needs of the national land policy, and thereby use that land to compensate for other land it had expropriated for development and construction, and not to conspire to obtain illicit profits therefrom; 3) After Euro-Asia Industrial Company paid 980,000 yuan, it received about 264 acres of land, and also received a matching Invoice for Creation of Farmland. Therefore, its actions are not consistent with the characteristics of an act of bribery.
2. Regarding the crime of bribing staff in a government body, the Judgment confirms two bribery payments: First, of the total 1.2 million yuan paid by Euro-Asia industrial Company for purchasing land, 250,000 yuan of that sum went to Zhang Jia-Xu. The Judgment regards this payment of 250,000 yuan as “bribing staff in a government body.” As to the nature of this 250,000 yuan, Zhang Jia-Xu stated “That was my compensation for helping them handle the matter of farmland creation.” But Yang Bin argued that “Zhang Jia-Xu’s testimony is inconsistent with the facts. When Euro-Asia Industrial Company paid this money, Zhang Jia-Xu told us that it was for the construction fees for creating the land. He didn’t mention that it was in fact his compensation. And you don’t bribe somebody by writing a check.” We believe that the determination reached in the Judgment was inappropriate, because from the available evidence it is not proved beyond doubt that this sum of money was a bribe given voluntarily by Euro-Asia Industrial Company to Zhang Jia-Xu, and one cannot rule out the possibility that Zhang Jia-Xu retained that money during the course of aiding Euro-Asia Industrial Company to purchase land.
The second sum of money used in an act of bribing staff in a government body was the US$20,000 given by Yang Bin to Li Ye, the former Deputy Director-general of the State Land and Resources Department of Liaoning Province, in December 2000. But this fact was not sufficiently investigated during the in-court session, and therefore it is inappropriate make a determination of guilt on the part of the Defendant. According to the Deposition of Li Ye, “To help Euro-Asia Industrial Company get a loan, I made unauthorized amendment to Document No. 598 issued by the Liaoning Provincial People’s Government. Yang Bin bribed me with US$20,000 but I later returned the money to him.” But Yang Bin argued “The US$20,000 for Li Ye is factual, but I did not ask Li Ye and Zhang Jia-Xu to amend Document No. 598. The US$20,000 for Li Ye was actually the wages paid to his son who worked in the school that I set up overseas. It was not a bribe.”
IV. The Judgment determined that the Defendant Yang Bin committed the crime of forging financial documents. For this crime, he was sentenced to ten years in prison. Regarding this charge, the facts are fairly clear as a result of the in-court proceedings. The Defense will put forward just two points concerning the sentence:
1. Regarding the nature of the offence: Euro-Asia Agricultural Company did indeed forge checks, account receivables, and other such bank settlement documents. But one fact not in dispute is that all of these documents were used to inflate the sales performance of the listing vehicle of Euro-Asia Agriculture (Holdings) Company Ltd in Hong Kong. None of these documents entered any financial or banking system, which means that the purpose of creating these documents was strictly to overstate the sales performance of the listed company. This behavior violated the provisions of Article 161 of China’s Criminal Law, and constitutes “the crime of providing false accounting reports.” According to the principle of integrating subjective and objective factors, this offense should not be classified as the “crime of forging financial documents.”
2, Regarding the issue of accountability: After Euro-Asia Industrial Company encountered problems, its CFO Yan Chuang fled abroad and was never brought to justice. Objectively and realistically speaking, as the company’s CFO, Yan Chuang should bear the main responsibility for this charge. He is the “directly responsible supervisor” in this case, as stipulated in China’s Criminal Law.
V. My evaluation of Yang Bin
As the Defense Lawyer, I came to know that through a large amount of capital investment and Yang Bin’s painstaking efforts, Shenyang’s “Holland Village” was rapidly established. This project contributed significantly to improving the appearance of Shenyang City and led to the development of satellite industries. The important role of his investment should be recognized. We cannot deny that Yang Bin’s investments were somewhat arbitrary, and he did make mistakes. Certainly, he was not totally ignorant about falsification of sales revenues by his CFO, Yan Chuang, and therefore he should shoulder the corresponding responsibility.
But the charges against him should be assessed fairly and objectively based on a clear understanding of the background details involved, and should not be subject to other factors. Only based on this principal can the judgment lead to and protect the healthy development of China’s economy.

Cao Shu-Chang, Lawyer
King & Capital Law Firm
November 20, 2007

On September 6 and 7 of 2003, in the court of second instance, the Judges and Prosecution of Liaoning Provincial High People’s Court should have answered or refuted the Summary Statement made by Yang Bin’s Defense Lawyer Tian Wen-Chang based on the evidence and the law.
It is a pity that the Judges chose to disregard that four of the charges could not be established, and one of them involved a questionable interpretation of the facts.
The court was adjourned temporarily in haste. One hour later, the court reconvened and this announcement hastily made: “The appeal is rejected, and the first-instance judgment is affirmed. This judgment is the final judgment’.”
So, what about the argument of Tian Wen-Chang and Cao Shu-Chang that “four of the charges could not be established, and one of them involved a questionable interpretation of the facts?”
Was there a factual answer to their argument? There was none then, and there has been none to date.
Was this judgment a fair one? People can judge by themselves.
But this sentence decided the fate of Yang Bin, the Sinuiju SAR Chief Executive. It left the SAR without a leader, froze the development of the SAR, and thereby impacted relations between China and North Korea.
Was this done to assert the dignity of Chinese law?
I am afraid that this is not a reasonable interpretation. But interpretations can vary, just like the ending of a story. So we can only leave the reader to give free rein to his or her imagination.

Yang Bin: Patriot
Yang Bin was born in Nanjing, Jiangsu Province on February 11, 1963. His father worked in a military industrial factory and died of an illness. His mother remarried and moved away, leaving Yang Bin in the sole care of his grandmother. He completed his studies in primary school, high school and university under the care of the Communist Party and the Government, receiving a patriotic education. He also served in the army and a military academy.
“I am a child of China who grew up drinking from the Yangtze,” he would often say.

Ge Ya-Lian, Yang Bin’s homeroom teacher in Jinling Junior High School (Nanjing), arrived in Beijing on a business trip in the autumn of 2007, and we met.
After Yang Bin was sentenced, she once went to Shenyang prison to visit her student. “During the Lunar New Year Festival of 2004, I went to Shenyang to see Yang Bin. It was snowing heavily that day. I grew up in the south and had never seen snow fall in such abundance. It was very cold.
“Yang Bin was very glad to see his teacher, just like a child seeing his father or mother. I was happy to see him as well. He lost his parents when he was very small, and he lived with his grandmother. Yang Bin was a diligent pupil. I had been very concerned about his development, and he had often shared his thoughts with me.
“You are my former student, and I do not want you to be a criminal,” I said. “I hope you will tell me the truth. Why did the court sentence you to so many years in prison?”
“Please believe me, Ms. Ge, I am really not guilty.”
“You had such a big enterprise. Is it because your staff violated the law, and as their supervisor, you had to take responsibility?”
“My staff did violate regulations, but nothing major. As for the six charges against me, my defense lawyers stated clearly that they were not supported by the facts. Ms. Ge, I was wrongfully convicted.’”
Ge Ya-Lian later on went on to study in the Politics and Law College of East China University, and then at Nanjing University’s School of Law. She became a Judge in the Nanjing Procuratorate, Deputy Director of the Legal Policy Research Office, Secretary General of the Criminal Law and Criminal Procedure Legal Research Association of Nanjing Law Society, a Prosecutor in the Bureau Against Corruption Bureau, and a Prosecutor in the Office for Prevention of Job-related Crimes. She was a legal worker with a deep understanding of Chinese law.
“According to the law, you must serve at least nine years before you can apply to change or reduce your sentence,” she cautioned. “What are you going to do? Why don’t you appeal? The Procuratorate will hear your case.”
“Let it be,” sighed Yang Bin. “I am my mother’s son. If she beats me, as her son, what can I say to her? I won’t blame my mother for my own sake. I won’t damage relations between China and North Korea for my own sake! It’s the friendship between China and North Korea that would suffer. That would make me an evil-doer. I am confident the Chinese government does not want to end its friendship with North Korea. In prosecuting me, perhaps they viewed me as just an ordinary businessman, without understanding that this action would hurt the feelings of the people of North Korea. My mother has punished me wrongfully. But for a child, such a minor grievance is not important.”
“Yang Bin didn’t complain or get upset. I looked at him, tears streaming down my face. He saw my tears and comforted me. ‘Teacher, I am in jail for the peace of northeast Asia. It’s worthwhile’.”
This conversation between Ge Ya-Lian and her student suddenly reminded me of a scene in 2005.
One day in September 2005, I went to Shenyang to visit Yang Bin in prison. As his biographer, a question had been nagging at me.
“Why did you insist on investing in North Korea and taking on the SAR project? That was bound to attract misfortune!”
Yang Bin took a drag on his cigarette and slowly exhaled. He thought for a good while. Perhaps he had also pondered the same question. Was his choice right or wrong? Was it fortunate or unfortunate?
“It was on the eve of Tomb Sweeping Day in 2001, after I visited the Mausoleum for the Martyrs of the People’s Voluntary Army of China that I felt sympathy for the North Koreans and made up my mind to invest in North Korea.
“On the way to the mausoleum, the cars bumped along the crummy road. But there was nobody there when we arrived. It was very quiet, full of tall withered weeds waving in the wind. It looked desolate. I suddenly recalled the words of my grandmother before she passed away. She held my hands tightly and begged me: “My dear grandson, after I die, I don’t want to be sent back to our hometown, because it’s too poor there. Even the ghosts there are haunted by poverty! You must promise me to bury me in Nanjing’.”
“Grandma, I promise I will.”
“I have brought you up and loved you so dearly, because I hope that after I die, you can go to your grandma’s tomb to burn paper money and think of me on the anniversary of my death and on Tomb Sweeping Day.”
“As I stood quietly in the deserted cemetery, I thought of how my grandma had hoped that her grandson would go to her tomb to burn paper money and remember her. But what about these martyrs in front of my eyes? More than 360,000 martyrs of the Chinese People’s Voluntary Army gave up their lives in North Korea. They were buried in the soil of a poor country, and none of their relatives visited their graves. They devoted their lives to the benefit of other people and other happy families. They should be recorded and memorialized in the annals of history so later generations can remember their names and praise them.
“But the martyrs who were buried in the cemetery there were so lonely and bitter. No one came to visit them, to venerate them, to present them with flowers or get rid of the weeds growing around their graves. Even more so, no one came to tell them how much they were missed…”
Yang Bin looked at me and then continued. “At that moment, it occurred to me that we should not waste the blood of the martyrs. If their souls in the soil knew that this country is still impoverished, they would not be comforted. I swore an oath that I would construct a decent road to the mausoleum, and remove all the withered greenery so that later generations could go there to venerate the souls of their heroic ancestors. The cemetery would be full of flowers. I wanted to do something good for the North Korean people, to help them live a better life. The cypress trees in the cemetery would be green year-round on behalf of the martyrs. People would go there to pay their respects, and the souls of the martyrs could rest in peace. That was what was truly in my mind.”
“Teacher Guan, am I guilty for doing something for those martyrs? Investment in North Korea had no genuine financial interest for me. I just hoped that North Korea could integrate itself into the international community, and people from China and North Korea could be friends generation after generation. Am I really guilty for what I have done? My heart is broken indeed…”
I was speechless, utterly speechless.

I recall that in the summer of 2002 Yang Bin invited me to his villa to chat late into the night.
“Guan, if the Sinuiju SAR is established successfully, would that contribute to the peace of northeast Asia?”
“Of course!” I replied.
“If the Sinuiju SAR can be established, North Korea has promised to expand that region and that would help to open the country even more to the outside. Then the North Koreans would lead better lives, just like the Chinese. Countries in northeast Asia would then compete on economic terms—who would want to start a war then? Peaceful coexistence is the best answer.”
During the drafting of the Sinuiju Basic Law, Yang Bin proposed that foreign political bodies would not be allowed to organize activities in Sinuiju. Activities by the Falun Gong Cult would also not be permitted. His proposal aimed to ensure no person or organization would carry out anti-China activities in Sinuiju.
Yang Bin’s approach was correct. His decision served to look after the interests of not only his “mother” China, but also those of his new “mother-in-law,” North Korea. This kind of thinking was the result of his belief in patriotism and internationalism.
The reader may wonder: “Author Guan Shan, you believe that the ‘Yang Bin Case’ was unjustly handled, and that Yang Bin is a patriot and internationalist. If so, then why did the court of Liaoning Province sentence him 18 years in prison? You also said that you believed that China’s legal system is fair, open and transparent.”
I can only answer that although the “Yang Bin Affair” touched on many aspects, and was therefore quite complex, his story does not end here, nor does his biography. It is still too early to draw any final conclusions.
I still believe the Chinese Communist Party will follow its principle of “seeking truth from the facts,” and will restore the true face of history.