Liu Xiaoqing was once one of the most beloved and recognizable stars in China. With acclaimed performances in films like Hibiscus Town and The Wilderness, and her iconic portrayal of Empress Wu Zetian in the hit television series, she earned the nickname “First Lady of Chinese Film.” Beyond acting, Liu found success as a businesswoman, running several production companies and accumulating significant wealth.
But in 2002, at the peak of her fame, Liu Xiaoqing was abruptly arrested and sent to Qincheng Prison on charges of tax evasion. Fearing for her life, she later said she wondered whether she might even face execution. Liu has consistently maintained her innocence, claiming she was falsely accused and that she followed no “unspoken rules.” In her view, the true reason for her fall was that she had offended someone powerful.
The case that shocked China
In her 2015 memoir Starting Over Without Fear, Liu Xiaoqing recounted her dramatic reversal of fortune — from a national celebrity to an inmate. At the time of her arrest, she ranked among China’s wealthiest individuals, even appearing multiple times on Forbes’ list of the top 100 richest people in the country.
The ordeal began in April 2002, when her brother-in-law Jing Jun, a top executive at one of her companies, was detained. Just days earlier, a friend had warned Liu Xiaoqing that a major operation was underway targeting a prominent figure in the arts. That same day, police surrounded her office building and arrested Jing Jun.
Liu Xiaoqing attempted to flee to France, but was stopped at the airport. From that moment on, she was placed under strict surveillance. In her memoir, she recalled being “guarded like a head of state,” with plainclothes officers watching her around the clock. Her home in Beijing’s Rose Garden community was surrounded. One of her two dogs was poisoned, and the other became so fearful it would sniff its food for minutes before eating — even when Liu offered it directly.
Three days after her brother-in-law’s arrest, Liu Xiaoqing herself was taken into custody.
Life inside Qincheng Prison
During her time in Qincheng, Liu Xiaoqing said guards avoided using her name, possibly to prevent other inmates from recognizing her. She was kept in isolation during outdoor exercise time and confined to a windowless five-square-meter cell. According to a 2013 article in People’s Daily Online, four women shared the cramped space in the summer, sleeping shoulder to shoulder in stifling heat and developing heat rashes.
Meals were poor, and when lawyers visited, they would bring her a 10-yuan boxed lunch, which she would eat to the last grain of rice. She was interrogated on her second day and declared her innocence: “I had so many accountants. I barely spoke three sentences to each one in a year — how could I possibly have instructed them to cheat on taxes? You need skills to do that. You think I’m that good at math?”
She had previously been recognized as a top taxpayer in Beijing’s Chaoyang District. When her brother-in-law was arrested, she tried to pay back taxes and penalties using all her assets as collateral, but tax officials refused.
She broke down crying — only to see her interrogators watching her with “gleeful satisfaction.” Realizing they wanted to break her, she resolved not to shed another tear.
Punished before trial
Authorities later reported that Liu Xiaoqing and her companies had evaded over 14.5 million yuan in taxes, with an additional 5.7 million yuan in late fees. Of this, 6.68 million yuan was deemed criminal tax fraud, and she was fined 7.1 million yuan.
Despite not yet being convicted, Liu Xiaoqing was told her 19 properties would be publicly auctioned and was forced to sign an agreement. She protested, but was only allowed to keep one home.
Later, she read in a newspaper that the 19 properties had sold for just 6.61 million yuan. Her reaction was numbed disbelief: “No shock. No fear. No sadness. Not even anger. Just one thought — how could they only be worth that little? Each property was worth nearly 10 million yuan at the time.”
Gagged upon release
In August 2003, after 422 days in detention, Liu Xiaoqing was granted bail pending trial. But before her release, officials demanded she sign a statement: She was not to speak publicly about the case and had to admit to tax evasion.
Her response: “What’s the point of a guarantee? I won’t say anything. You know I didn’t evade taxes — we all know. But sure, I’ll write it. In the end, those who talk will talk, and those who won’t, won’t.”
Her sister was released at the same time. For years afterward, Liu Xiaoqing avoided speaking publicly about her imprisonment — until Starting Over Without Fear was published in 2015.
Who did she offend?
Liu Xiaoqing has said only that she was “young and impulsive” and had offended someone powerful. According to overseas reports, that someone was Jiang Zemin, former General Secretary of the Chinese Communist Party.
In the early 1990s, Jiang — still consolidating power after the Tiananmen Square crackdown — saw Liu Xiaoqing often visiting Deng Xiaoping’s family. Both she and Deng were from Sichuan, and Liu was a favorite in the household. She was lively and funny, making her a hit at gatherings.
Jiang, more than 20 years her senior, called her “Little Sister Xiaoqing,” while she cheekily called him “Uncle Jiang,” drawing a generational line that rebuffed any inappropriate interest. The final straw may have been when she joked at a Deng family event that, unlike Jiang, she had served in the military and “held a gun.” Laughing, she warned him not to play with firearms lest he “blow a hole in that big belly.” Jiang laughed along — but reportedly never forgot the insult.
The mysterious accountant
Officially, Liu Xiaoqing was jailed for tax evasion. But the real story may lie with a mysterious female accountant surnamed Li. In 1993, when Deng was still in control, Liu was investigated and cleared. But after Jiang solidified power, Li and a man named Wang Jianzhong joined Liu’s company — both believed to be connected to the authorities. According to reports, Li meticulously recorded everything from within, laying the groundwork for the later charges.
Why did Liu Xiaoqing dare to publish her memoir in 2015? Because by then, Xi Jinping was in power and had begun his own anti-corruption campaigns. Liu, finally, felt it was safe to tell part of her story.
She has insisted: “I’m not someone who seeks hype. I’ve never done anything unethical. I’ve never followed hidden rules.” In a system where flattery, compliance, and playing by the unwritten rules were often expected — or even rewarded — her refusal to do so may have made her an easy target. Her refusal to bend to power or engage in backroom dealings may be exactly what sealed Liu Xiaoqing’s fate.
Translated by Katy Liu
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