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Sunday, April 8, 2001 - Page updated at 12:00 AM

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Hainan: sunny with shady side

The Associated Press

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LINGSHUI, China - The three shirtless young toughs swagger into the restaurant. One takes a pack of cigarettes from a glass display case without paying. The waiter watches grimly.

Hainan Island, where China is holding 24 crew members of a U.S. spy plane, bills itself as a sun-drenched tourist paradise - the "Hawaii of China." But Chinese know it better as a haven for drugs, gangs and prostitution.

"I like this place but you must be careful. Don't go out after dark," waiter Zhang Yuhang had said just moments before the trio of young men walked in as if on cue. Using the Chinese term for crime gangs, Zhang whispers a warning: "Have you ever heard of the black societies?"

The three men sit around a Westerner who is the restaurant's only customer, turning their chairs around to straddle the backs. Their casualness is not meant to put the visitor at ease.

The trio won't say whether they belong to a gang, but they do admit to running a gambling den and eliciting "small fees" from local merchants. One offers to sell movies on compact disc - pirated, of course - for about $1 each.

Hainan, shrouded in emerald rain forests and ringed by sugar-white beaches, gained unlikely fame when a U.S. Navy surveillance plane made an emergency landing here after a collision last Sunday with a Chinese fighter jet. The plane landed at a military air base near the town of Lingshui, where Zhang's restaurant is located.

Hainan, far from central-government control, has for centuries been an outpost for pirates and exiles. Its remoteness some 2,700 miles southwest of Beijing has made it, in novelist Graham Greene's phrase about another gangland haven, a "sunny place for shady people."

Hainan bungled a shot at respectable prosperity in the mid-1980s when China made the island a laboratory for free-market reform.

Local leaders used their new powers to indulge in smuggling and graft on a huge scale. Years of failed get-rich-quick schemes left Hainan's cities littered with half-finished buildings. Banks are saddled with billions in unrecoverable loans.

Xu Guangrong, a 51-year-old laborer, was lured to Hainan's capital city, Haikou, by the promise of high-paying work in the tourism industry.

Instead, he and his family found a depressed economy where migrants fought over scarce jobs that paid no better than in his native province of Hubei in central China. His 18-year-old daughter turned down her only offer of work - from a pimp.

"We've been here a month and a half, and there's still no work," Xu said, sitting on a box in an unfinished 15-story building where he has erected a makeshift shelter for his family. "We don't have enough money to get back home."

The official story is that business is good, that more than 6 million tourists visit every year and that the island is laying fiber-optic cables, trying to turn itself into a center for biotechnology research. The state Xinhua News Agency optimistically calls it China's "Green Silicon Valley."

At the same time, Hainan's governor in February announced a crackdown aimed at crushing drug trafficking, gambling and pornography.

Last October, officials in the southern city of Sanya threatened to dynamite 68 derelict buildings, state media said.

But even tourists quickly discover the island's split personality.

Step into a cab, and the driver offers to sell forged plane tickets at two-thirds face value. Enter a curbside stall to buy bottled water and the man inside asks if you'd like a woman as well.

Xu, the day laborer in the provincial capital Haikou, says gangs control access to construction jobs and favor hiring locals.

Even if he could get a job, he'd earn only about $5 a day - just 50 cents more than a day's work back home in Hubei province.

"If I'd known, I don't know if I'd have come," he said with a sigh.

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