`Robin Hood' in trouble with Beijing

The arrest of a rural businessman who antagonized government officials but earned a loyal following among peasants has created a sensation in Beijing, where influential academics say he showed how to improve life in the vast, backward Chinese countryside.

The businessman, a bold and politically artless one-time farmer named Sun Dawu, is in jail awaiting trial in Hebei province in northeastern China on charges that he ran an illegal credit cooperative and lured millions of dollars in deposits away from state banks.

In opinion columns and popular Web sites, though, liberal-leaning intellectuals have portrayed Sun as a modern Robin Hood. They say he battled state finance and trade cartels that they view as draining the savings of China's 800 million peasants to support urban development.

Lawyers for Sun and supporters in Beijing's academic circles are pressing the government to scrap or define more clearly the scope of the law Sun is accused of breaking. The loosely worded article gives the authorities broad discretion to charge businessmen who fall out of favor with a catch-all crime called illegal fund-raising.

"It's well worth considering what this case is really about," said Jiang Ping, the former president of the Chinese University of Politics and Law and one of China's most prominent legal experts. "Perhaps the government is violating the law and has wrongly accused him. If this isn't handled properly, it will greatly affect rural economic development."

The support for Sun is part of a broader effort to bring about gradual political change by pressing top leaders to apply their sometimes high-profile promises to real situations. Even the state-controlled news media increasingly highlights individual examples of abuse by local governments in the provinces, prodding the authorities to make good on pledges to respect the rule of law.

Sun's supporters include many of the same people who campaigned to have the migrant law overturned.

Sun, who is 50, grew up in a farm family. He joined the army and then worked at the state-owned Agricultural Bank of China. In 1985 he went into business, leasing wasteland and using it to raise chickens and pigs. His company, called Dawu Farm and Husbandry Group, has since expanded into food processing, cattle breeding and grape growing.

He initially had cordial relations with the authorities, who appointed him to the local branch of the People's Congress, the Communist Party-controlled legislature.

But even as Dawu Group grew to employ 1,500 people in Xushui County, a poor area, he had trouble raising money from state-run banks. Typically they lend only to larger companies that have state ownership or to entrepreneurs who give favors to bank officers. Sun arranged one loan in 1994, but was repeatedly denied credit in subsequent years, state-run newspapers reported.

To raise money, Sun began offering banking services to his own workers. He accepted their deposits, paying interest rates slightly above what state banks offered.

The cooperative became so popular that local farmers who did not work for Dawu also made deposits. Sun eventually collected about US$22 million from 4,600 area households, official newspapers said.

Sun promoted a quasi-collectivist philosophy, steering some company profits into roads and schools.

Relations with officials deteriorated. Sun had not been shy in making charges about his difficulties getting loans. He publicly accused bankers of lending only to people who bribed them, which he said he refused to do.

As troubles mounted, Sun cultivated ties to a circle of academics who study rural issues. He made speeches at top universities, arguing passionately that the nation's financial system effectively subsidized rich coastal cities at the expense of the interior. He posted these polemics on his company's Web site.

Though some of his speeches were detached and analytical, he also tested the limits of debate. He once said the Communist Party presided over a "fake republic."

The Hebei provincial authorities detained Sun in late June and charged him with illegal fund-raising last month. His son continues to run his company, though many of its workers have been laid off and the bank was dissolved.