The smoky auction room is packed tight with bidders. Lai Changxing's empire is being parcelled up and sold off.

Everyone here is hoping for a bargain. People like Mrs Ko, the proud purchaser of one of Lai's imported cars.

When investigators finally cracked the smuggling case in 1999, Lai fled to China. He is now in Canada, fighting extradition charges.

Some Chinese see Lai as a role model

If he could see what is happening in the auction house he would surely cringe. He amassed a fortune of nearly $2bn, buying luxury houses, cars, even a football club.

Now it is all going - even his rice cookers.

It is a big come-down for a man who not only ran a successful import business, but who, allegedly once had the local government in the palm of his hand.

I visit what looks like a very ordinary brick building in Xiamen. But looks are deceptive, because it used to be the 'Red Chamber' - Lai Changxing's notorious night club-cum-brothel.

It was here that he allegedly invited government officials to cavort with prostitutes. Investigators say he then captured them on hidden camera and used the video to blackmail and manipulate them.

With the authorities blackmailed, or paid off, Lai Changxing allegedly smuggled oil, cigarettes and cars into China, and he did it on a scale never seen before.

When government investigators finally cracked the case, they say they found he had evaded $4.5bn in tax.

Warning

At the auction, the contents of the 'Red Chamber' are knocked down cheaply - just $60,000. And the purchaser will pay tax - 4.7% according to the auctioneer.

But the auction is not only about recouping lost revenue. It is also a propaganda exercise. The room is full of Chinese media. The authorities want to show ordinary Chinese that they are cracking down on corruption.

They also want to send a warning to corrupt officials in businesses across the country. After all, who wants to see his bullet-proof Mercedes Benz sold off to the highest bidder?

The government hopes officials and businessmen are paying attention. Corruption and smuggling cost China billions of dollars annually. But is the message getting through?

Many people - who refuse to be named - tell me Lai helped the local economy. They say his company delivered cheap goods and materials. Some people respect him as an astute businessman. Others even admire him as a hero.

The government may have cracked this case, but it is a long way from putting an end to China's culture of corruption and smuggling.