What makes China’s criminal underworld unique is how organized crime and government corruption are deeply interconnected.
By Yu Xiaodong
For decades, China boasted of being a society free from the evils of gangs, drugs and prostitution. For almost 50 years, there was no official recognition of organized crime or “black societies” as it is commonly referred to in China. It wasn’t until 1997, when criminal law was amended to include crimes that were “black society in nature,” that the concept first entered into public use.
The first government campaign against organized crime was launched in the early part of this decade. However, after almost 20 years of economic reform and growth, organized crime had developed a firm foothold in Chinese society, and in some cases had infiltrated levels of local and regional government. The recent dramatic Chongqing crackdown offers a clear illustration of the diversity and severity of China’s modern-day black society.
Many Chinese officials and scholars argue that the black society, along with corruption, are inevitable byproducts of capitalism and rapid economic development. Many point to the United States and Italy as evidence. But what makes China’s underworld different is how these two have become deeply connected with each other both politically and economically.
‘The Original Sin’
The origins of such a situation can be traced back to China’s economic takeoff in the late 1970s. To a large extent, Chinese economic reform started out as a series of “illegal practices.” For example, the 18 farmers in southern China who are credited with changing China’s entire agricultural policy in 1978 did so by breaking the law to divide their farmland and work on it separately. These farmers, who were subsequently condemned as being “dangerous to socialist public ownership,” were later recast as pioneers of a market-oriented economy.
Also in 1978, Chinese leader Deng Xiaoping made his famous speech about “allowing a minority of people to get rich first,” and it was at this point that China entered into a transition period from a planned economy to a market-oriented economy. Over the next few decades, a minority of people did indeed get rich, but many had done so through breaking the law, a practice now commonly referred to as the “original sin” of China’s rich.
As the country waded into a previously unknown world, the boundary between law-breaking and innovative practices often became blurred. As the economy continued to develop, many special interest groups, often backed by or allied with government agencies, were established. Without effective oversight, government agencies (who were supposed to act in a regulatory capacity), allied with special interest groups and became key stakeholders in many industries.
In Chongqing, this alliance between special interest groups and government officials took on a more criminal style. Take for example the case of Wang Tianlun, president of Jinpu Food, and one of the richest organized crime leaders currently awaiting trial.
Chen Caiping, a former slaughterhouse owner, told NewsChina that there were 108 small slaughterhouses in 2003, when the Chongqing government launched a restructuring plan to merge all slaughter houses into eight big meat production plants. Many small business owners like Chen resisted the plan and filed various lawsuits. Unable to legally acquire the smaller plants, Wang Tianlun, backed and favored by local officials, used members of organized criminal gangs to force business owners to surrender ownership of their businesses. Wang Tianlun and his Jinpu Company soon controlled over 40 percent of Chongqing’s meat market. In late 2008, Wang sold 51% percent of his company to the Shanghai-based Meilin Corporation for 86.5 million yuan (US12.7m), and soon emerged as one of the richest men in Chongqing. By the time Wang was arrested, it was believed that his company controlled over 70 percent of the market share.
Large-scale organized crime first appeared in China in the 1980s accompanied by the general liberalization of the economy. According to Tian Hongjie, associate professor of China People’s Public Security University, the annual number of major violent crimes increased from 63,000 in 1984 to 624,000 in 1994, with an annual increase rate of 80%.
According to Professor Wang Li from Southwestern University, black societies first appeared in Chongqing in the 1980s and enjoyed rapid development after 1997, when Chongqing become the fourth city directly administrated by the central government (after Beijing, Shanghai, and Tianjin).The move was mostly fueled by local resentment over high rates of unemployment due to the city’s economic restructuring.
In the early 2000s, in an effort to reduce corruption and increase government efficiency, the Chinese government launched a reform to reduce the number of tiers of government from five to three, minimizing prefecture and township-level governments. In Chongqing, the township level public services, including some long distance bus services and stations, were annulled. It was then that organized criminal networks, often operating like private companies, filled the vacuum and began taking over local bus stations and rural markets.
“As a matter of fact, they provided much convenience to local residents with bus routes that the public bus services did not cover, and kept the market clean,” said Du Yuan, a local journalist who has been following the Chongqing trials closely.
However, without effective regulation, these private companies often came into dispute over control of bus routes and rural market, and violent conflicts become frequent. One of the leaders of these organized criminal gangs, Li Yi, was sentenced to 20 years in prison for his role in such conflicts in early November.