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Economy

A crackdown with faraway consequences

Lanping Bai and Pumi Autonomous County, Yunnan Province, is among the local economies hurt by the fallout from the anti-corruption campaign.

China's anti-corruption machine, driven forward by President Xi Jinping, is impacting remote corners of the country.

     Lanping Bai and Pumi Autonomous County, a mountainous region in the southwestern province of Yunnan, is among the areas affected.

     The Xianning Intermediate People's Court in Hubei Province on Feb. 9 executed a once-prominent Chinese businessman with ties to the county.

     Liu Han, who headed mining conglomerate Sichuan Hanlong (Group), arrived in this sparsely populated economic backwater in 2005. He told residents at that time they were sitting on a fortune.

     His business empire operated in a wide range of other fields, including construction, real estate and financial services. With an endearing smile, the businessman and Sichuan Province native convinced residents to stake their future on mining. Developing a mine would allow them to enjoy a modern lifestyle, he said.

     He had his sights set on a zinc deposit in the area that was estimated to be Asia's largest. Local residents rolled out a red carpet for Liu. Soon, restaurants and hotels popped up.

Dirty business

Yang Zize, a 43-year-old resident of Lanping, was among the locals who bet big on Liu's vision. At the end of January, Yang brooded over the rise and fall of his fortunes over the past several years.

     Believing in Liu, Yang spent his savings on a truck. At the apex of the zinc mining boom in the county, Yang earned 8,000 yuan ($1,280) per month, nearly four times the average pay for local jobs. He transported zinc day and night.

     Then came the crackdown. "I've earned nothing in four months," he said. "Everything has changed since the authorities arrived."

     Yang cannot return to farming, his previous occupation. Soil in the region has turned soot-black. Children get ill easily because of the pollution caused by open-air zinc mining, he said.

     Lanping's gross domestic product grew 28% in 2011, compared to a year earlier. The county was touted as a model for regional growth.

     But boom turned to bust. Liu was arrested in March 2013 by authorities on suspicion of organizing and operating a crime syndicate involved in murder, blackmail and other illegal activities in connection with real estate projects. His mine stopped production, and Lanping's GDP growth slowed sharply to less than 8% in the first half of 2014.

All the king's men

Known as a "mining king," Liu had expanded into Australia, Africa and even the U.S. before his arrest.

     Investigations into his criminal activities revealed ties to Zhou Yongkang, the former security chief of the Communist Party who fell from power in July 2014 and was formally arrested in December. Zhou had previously served as party chief of Sichuan Province.

     Liu, who started his business in Mianyang, the second-largest city of Sichuan Province, had close ties to Zhou's son. Charges against Liu included using his ties with Zhou to acquire a major stake in the Lanping mine at an unfair price.

     A woman selling fruit in a high-end residential area in Mianyang, a district that made its money from farming until it received massive real estate investment from Liu, has mixed feelings about the changes the area has undergone. "Good condominiums and schools have been built around here, but I was surprised to know that land sharking and even murders were carried out in the name of development," she said.

     Locals in general have mixed feelings about the rise and fall of Zhou and Liu.

     Yang in Lanping has asked the local government if he can move from the county, but his chances are slim. China strictly limits migration from farming areas.

     Symbolizing the doom and gloom, an idled factory with smokeless chimneys near Yang's house makes the bleak landscape even more dreary.

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