Lured by a seemingly attractive investment opportunity, Ying Jiuqing, a wealthy individual from Suzhou, a charming ancient city 50 miles away from Shanghai, China, spent close to 5 million yuan (US$570,000) to purchase 190,000 admission cards issued by the Oriental Pearl’s “Space City,” an entertainment outlet that claimed Joan Chen, a Hollywood actress whose stardom budded in Shanghai, as one of its investors. What he did not expect was that, instead of raking in millions of dollars as he had dreamed, he woke up to a six-year-long nightmare with no positive end in sight. These little plastic cards with a magnetic stripe would wipe out all his savings, suck up his business, and drag him into a government sanctioned fleecing of consumers.
Celebrity Effect
Overlooking the Huangpu River and a booming Pudong New Area, Shanghai, Oriental Pearl TV Tower, with a giddy height of 468 meters, is the world’s third tallest TV tower after the 553-meter CN Tower in Toronto and the 535-meter Moscow TV Tower. With a unique design composed of balls and columns, the tower has become Shanghai’s newest landmark and a big magnet for tourists. The Space City is in the lower spheroid of the Oriental Pearl Tower.
In 1996, a partnership was established between Shanghai Oriental Pearl Co., Ltd. and J.C Oriental Pearl, a U.S. based company founded by Joan Chen. Shanghai Oriental Pearl offered the right of use of the space, and Joan set up Shanghai J.C. High Tech Entertainment Co., Ltd., or J.C. Co., of which she was listed as chairman of the board and legal representative, to run, solely, Space City.
In September 1996, while Space City was still under construction, J.C. Co. began to sell the Space City admission cards to raise capital. With a 100-yuan face value, the cards were sold at 50 yuan each. J.C. Co. also promised that, “when Space City is officially open, the company will buy back the unused card at 80 percent of the 100-yuan face value.” In addition to the half-price discount, the movie star’s signature on the card, a free trip to the United States or Hong Kong, future value as a “collector’s item,” and the value added consumption were all part of the promotion gimmicks that attracted many consumers including Ying.
According to Cheng Xin Dao Hang, or Credibility and Reputation Guide (http://www.wodutom.com/law168), a consumer rights protection blog that chronicles the entire event, on April 29, 1997, Ying threw in 4.75 million yuan and bought 190,000 Space City cards, making him the biggest cardholder. Ying purchased the cards for charity and business related purpose. He also sold quite a few to collectors, overseas business clients, friends, relatives and co-workers.
On October 21, 1997, Space City opened to the public. Its admission fee was priced at 65 yuan, instead of 100 yuan as promised. J.C. Co. explained the price difference as special discount for the first “trial run” of operations. The official price was still set at 100 yuan. When Ying asked J.C. Co. to buy back a portion of the cards he purchased at 80 percent of 100 yuan, J.C. Co. refused.
On March 17, 1998, J.C. Co. formally notified the consumers that the “Oriental Pearl’s Space City” was renamed as “Oriental Pearl’s Space Amusement Park,” and that the consumer value of the cards was increased to 140 yuan, effective March 18.
On January 1, 1999, J.C. Co. arbitrarily closed the amusement park, citing disputes with Shanghai Oriental Pearl Co., Ltd. Thousands of the Space City cards in consumers’ hands became valueless.
The closing of the Space City also marked the end of the business cooperation between J.C. Co. and Shanghai Oriental Pearl Co. The latter refused to honor any of J.C. Co.’s contractual agreements including the sale of the Space City cards.
To rescue his reputation and credibility, Ying bought back 25,020 cards he had sold to others at 80, 100, or 140 yuan respectively and incurred a huge loss. After all negotiations with J.C. Co. and Shanghai Oriental Pearl Co., for compensation failed, he had no choice but to seek legal protection.
An Uphill Legal Battle
In March 1999, Ying Jiuqing filed a civil lawsuit at Shanghai No. 1 Intermediate People’s Court against J.C Co. and Shanghai Oriental Pearl Co., Ltd. seeking over 7 million yuan in damage from J.C. Co. and demanding both defendants to announce in major newspapers their plans to clean up the Space City card mess.
Shanghai Oriental Pearl Co., Ltd. claimed that it bore no legal relationship with the plaintiff, nor was it aware of J.C. Co.’s selling of the Space City cards, which, in Shanghai Oriental Pearl’s opinion, was an action of J.C. Co. as an independent legal entity. The lawsuit did not have any legal ground.
J. C. Co., on the other hand, argued that Ying’s lawsuit lacked facts and legal evidence. It had obtained proper approval from the government to operate Space City. The pricing and the sales promotion of the Space City cards were done with honesty and credibility and were not a hoax. The close of the Space City was an honest mistake by J.C. Co. and was not foreseeable at the time of the sales promotion. Therefore, it asked the court to throw out the lawsuit on grounds of lack of evidence from the plaintiff side.
In August 1999, the court ruled against Joan Chen and ordered J.C. Co. to pay back Ying 546,675 yuan—proceeds from selling the cards to him. Ying’s other requests were not granted. The court ruled that during the sales promotion of the Space City cards, defendant J.C. Co. opened the entertainment programs in the Space City to the public, and the price of these programs were approved by the authority; that the closing of the Space City later was not a foreseeable event for J.C. Co., and therefore, its conduct did not constitute civil fraud, and the plaintiff’s request for compensation was rejected.
The court also found it difficult to support the Plaintiff’s request that both defendants make joint announcement in major newspapers on handling the Space City cards issue, given that the disputes between the two parties were not settled yet.
The court further ruled that Shanghai Oriental Pearl Co. was not a defendant in this case.
Ying believed that, instead of upholding the consumer’s rights, the court was protecting both defendants. Unsatisfied with Intermediate Court’s ruling, Ying appealed to the Higher Court in September. His appeal was rejected. He then appealed to the Supreme Court and the High People’s Procuratorate after J.C. Co. failed to follow the court order and pay the money.
Ying called the Space City card fraud a “fleecing of the consumer.” His trust in the landmark TV tower and the government of Shanghai, and his faith in other’s credibility — including that of a metropolitan government — turned to be a costly legal battle. So far, Ying has spent more than 100,000 yuan in legal fees and still cannot get any legal protection he’s seeking. “For the past few years, I’ve accumulated nothing but a pile of legal papers, documents, and evidence for the lawsuit. But so what? I finally came to understand that there is no law in China. Power is above the law.”
Ying said, “Everything, everyone is under the Communist Party Committee, which is exempted from all accountabilities. The judges decide the cases not based on laws or their conscience, but the Party Committee’s opinion. The judges are merely puppets. If you want to file a lawsuit, you’ll be told to talk to the leaders first. The leaders then give you some empty promises such as we will do some investigation, etc. No one is actually responsible for anything. It’s all Communist Party’s decision, and their decision usually violates people’s rights. That is the root cause,” Ying told the reporters.
Eventually, in April 2002, J.C. Co. announced on the People’s Daily and the Jiefang Daily to liquidate and settle the claims. Two years later, many cardholders still have not received any refund.
In October 2000, Jiang Weimin, a representative of the cardholders, told the reporter from Dajiyuan, an independent Chinese media based in the U.S., that there was no material progress since the announcement more than 900 days ago. They had reached the limit. Jiang spent more than 200,000 to purchase 2,000 Space City cards. He was heavily in debt, and his wife was mad with him.
Ying’s personal losses went beyond the financial scope. His brother, Ying Jiuhui, told Dajiyuan’s reporter that their father and one of their uncles were devastated by the ordeal and passed away. Jiuhui could not bear to see his brother fighting this battle alone. He took out his savings to help his brother. His generosity cost him his marriage.
The Unexpected “Ying Jiuqing” Effect
Joan Chen, whose name and face were everywhere during the Space City card promotion, has “evaporated” since the fraud was exposed. Reporters from the Chinese media, both inside and outside of China, tried to get hold of the movie star or her spokesperson for their side of the story. However, their calls and faxes were never returned.
Ying Jiuqing, on the other side, has become a self-made celebrity. The Space City card and the lawsuit have made Ying Jiuqing a household name. Other Space City cardholders looked at him as their hope to get justice served. Victims of other consumer frauds are following his footsteps to fight for their rights.
The ever-increasing “Ying Jiuqing” effect has also caught the eyes of those who are constantly looking for niche market and new investment opportunities.
The tiny plastic card has become a hot collectible item. Not long ago, the Great Wall Auction Firm added the Space City card to its auction list. Cards with Joan Chen’s signature were bid from 180 yuan and sold at 1,800 yuan. Those without the movie star’s signature were bid from 100 yuan and sold at 800 yuan. Many believed that even at 1,800 yuan, the card was not over-sold. Collectors regarded the card as a rare commodity, comparing it to a unique stamp issued during China’s Cultural Revolution. As the number of cards become less and less, and with the double-sided celebrity effect and endless media coverage, one can bet that the price will go only one direction—Up.
Obviously, Ying and other cardholders did not expect this return when they purchased the cards. After a long legal battle and the hope to get the money back becomes dimmer and dimmer, this may be even better than the original payback. Yet, is money the only verdict in a country where power prevails over law?
Helen Chow is a freelance writer based in New York.