The Socio-Economic Basis of Organised Crime in China

21 Feb


Recently Liu Han, a Chinese business tycoon and ranked amongst the wealthiest people in China, made the BBC (Chinese Regional) news due to his charge of ‘murder, intentional injury and organising a mafia-style gang’. Around a year ago personal interest and curiosity prompted me to read into the nature and problems of organised crime in East Asia, particularly in regard to Japan and China where my interests primarily lie. As I read this article my curiosity was yet again piqued: how great a threat is organised crime in China and what are its footholds?

Perhaps due to the influence of popular culture our traditional view of organised crime is of a ‘Godfather-esque’, Cosa Nostra styled family hierarchy of criminals. Truthfully, organised crime is a very difficult phenomenon to describe. Simple, generalised terms do no justice to the complex range of criminal activity which falls under the umbrella term of ‘organised crime’ – anything from street hooliganism to formal syndicates. Chinese criminal code from 1979 failed to cover any definition of organised crime; it was not until 1997 that the criminal code adopted a definition which matches the UN Organized Crime Convention definition. Put simply, it covers a group of three or more persons who, over an extended period of time, organise themselves in order to commit crimes for personal gain.

Prof. An Chen of the University of Singapore offers three ‘types’ of organised crime present in China. Type one concerns criminal means for legal businesses, type two only illegal business, and type three describes street gangs.
In regard to Liu Han’s arrest, there are certain correlations with the description of his identity and his charges that match with Chen’s definition of ‘type one’ organised crime. As head of a mining conglomerate he owned a legal business which generates revenue. Chen suggests that type one legal businesses survive and prosper due to illegal methods of coercion including blackmail, racketeering and violence. He explains that they operate in a legal ‘grey area’ of coercion which technically avoids breaking any laws. Type one organisations are usually formal and may uphold a set of ‘rules’ to keep members in line and retain loyalty.

Chen links the origins and cause of organised crime to Chinese economic reform and a loss of social control. He explains that during Mao’s period China had strong social control and a communist regime that despised the use of material incentive. The dominant value during this period was not money but political power. A great deal of organised crime was stamped out during this period.
The post 1979 economic reforms re-introduced consumerism thus reigniting the attraction that money and material incentives hold for the populace. However, the market reforms failed to protect the market from being manipulated via illegal and underhanded means; organised crime was not only given the incentive to take off but it was also given an environment within which to flourish. Formal, coercive organised crime relies on the existence of a normative market and the possibility for corruption which comes from an increased interest in material incentives (for example, bribes of money).

Rather than an overt ‘lack’ of social control it is perhaps fairer to say that the means of social control in China are undermined by the free market economy. There are cracks in the system which can be exploited by those with criminal intentions. Political corruption is one of the more serious issues; over the last twenty-thirty years the prevalence of state management in economic and judiciary affairs at a local level has granted a niche for coercion and official corruption.

Although ‘Anti-Crime’ campaigns have been issued to combat these problems, they are but short term solutions. They fail to tackle the issue at the root cause and fail to deter organised crime in the long term. More extensive socioeconomic reforms must be made in order to make a more efficient ‘crackdown’ on the growing problem of organised crime. (BBC Article)
Chen, A. (2005) ‘Secret Societies and Organized Crime in Contemporary China’, Modern Asian Studies, Vol. 39, No 1, pp. 77-107. (Available on J-STOR) (UN definition of organised crime)
Lo, S. (2009) The Politics of Cross-Border Crime in Greater China, New York: M.E. Sharpe.


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