Shomron Center for Economic Policy Research

In Search for an efficient Institutions

Businessman executed in PRC: versions and implications


A Chinese mining tycoon (Liu Han) linked to former security tsar Zhou Yongkang has been executed, according to state media.”

Officially, Liu Han, 48, “was found guilty of 13 charges – including murder, organising casinos, running a mafia-style gang and illegally selling firearms”. Incentives to run “mafia-style gang and illegally selling firearms” for successful businessman look pretty weak.

Reasonable version – continuing large scale property and power redistribution in PRC and fall of businessman’s protector – mighty chief of China communist security service Zhou Yongkang caused attack on businesses, left unprotected. “Word of honor” of Chinese communist leaders was highly valued 10-20 years ago. Wide – spread corruption was predictable, obligations of bribe-takers were revered and respectable, their promises – reliably kept.

Intensification of intra-elite conflict broken this “golden age” of Chinese industrial prosperity, curtailing influx of foreign direct private investments, gradually and not so successfully substituted by governmental investments.

Executions of Chinese businessmen and continuation of intra-elite conflict rises the question about prospects of Chinese economic growth and the quality of the latter. We discussed this issue in our book and papers and, unfortunately, our forecasts going to be true.


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