The Chinese Mafia; Organized Crime, Corruption, and Extra-Legal Protection

Utilising individual interviews and focus group discussions, primarily from two Chinese cities, The Chinese Mafia: Organized Crime, Corruption, and Extra-Legal Protection contributes to the understanding of organized crime and corruption in the Chinese context, filing a significant gap in criminological literature, by investigating how extra-legal protectors-corrupt public officials and street gangsters-emerge, evolve and operate in a rapidly changing society. China's economic reforms have been accompanied by a surge of social problems, such as ineffective legal institutions, booming black markets and rampant corruption. This has resulted in the rise of extra-legal means of protection and enforcement: such is the demand for protection that cannot be fulfilled by state-sponsored institutions. This book develops a new socio-economic theory of mafia emergence, incorporating Granovetter's argument on social embeddedness into Gambetta's economic theory of the mafia, to suggest that the rise of the Chinese mafia is primarily due to the negative influence of guanxi (a Chinese version of personal connections) on the effectiveness of the formal legal system. This interplay has two major consequences. First, the weakened ability of the formal legal system sees street gangsters (the 'Black Mafia') providing protection and quasi law enforcement. Second, it allows for escalating abuse of power by public officials; as a result, corrupt officials (the 'Red Mafia') sell public appointments, exchange illegal benefits with businesses and protect local gangs. Together, these outcomes have seen street gangs shift their operations away from traditional areas (e.g. gambling, prostitution and drug distribution), whilst corrupt public officials have moved to offer illegal services to the criminal underworld, including the safeguarding organized crime groups and protection of illegal entrepreneurs. A study of crime and deviance located within a fast growing economy, The Chinese Mafia offers a unique understanding of these activities within contemporary Chinese society and a new perspective for understanding the interaction between corruption and organized crime. It will be of interest to academics and students engaged in the fields of criminology and criminal justice, sociology, and political science, with particular interest for those researching China and Chinese politics and governance. This book is based on a 2014 PhD thesis Front Cover © Peng Wang 2017 General Editors' Introduction Acknowledgements Permissions Contents PART I - Theory and History 1. Introduction Socio-economic Studies of the Mafia Organized Crime and the Mafia An Economic Theory of the Mafia The 'property-right theory of mafia emergence' Mafia protection The Embeddedness of Mafia Protection in Social Relations Red Mafia and Black Mafia The role of guanxi in facilitating the rise of extra-legal protectors Contributions to Research Methodology and Fieldwork Research design Challenges of fieldwork Outline of This Book 2. Gangs as Pseudo-government Chinese Secret Societies Wars and the rise of secret societies The Heaven and Earth Society The Green Gang The Red Gang The formation of the Green-Red Gang in the late Qing dynasty The Rise of the Shanghai Green Gang in the Republic of China (1912-1949) Shanghai: the crime capital of China Gang leaders as police officers Green Gang's Internal Control Coping with conflicts within the organization Mitigating external uncertainties Sanctions The Shanghai Green Gang in Illegal Markets Opium trade Gambling Links with Political and Business Elites The Shanghai Green Gang and the Kuomintang Legal fronts Green Gang's Infiltration in Legal Markets Banking Shipping Food supply The Downfall of the Shanghai Green Gang Conclusion PART II - Extra-legal Protection in Contemporary China 3. Why the State Fails Conflicts between Law and Guanxi Establishing the Legal System for China's Economic Reform Reform as a reassignment of property rights Recognition of private property rights in China The growing importance of China's legal system The Changing Role of Guanxi in Contemporary China Defining guanxi Guanxi practice under the pre-reform system Guanxi practice under economic reforms Guanxi and the Legal System: Coexistence and Conflicts Guanxi as a substitutive informal institution Guanxi as a complementary informal institution The embeddedness of corruption in guanxi networks The effects of guanxi on judicial corruption Conclusion 4. The Black Mafia The Demand and Supply of Extra-legal Protection Underground Police Organizations Group structure Soft violence and illegal services The mechanism of emergence The Provision of Hospital Security by Unlawful Protectors Group structure Illegal services and methodologies The mechanism of emergence The Role of Guanxi in Obtaining Extra-legal Protection Coping with government officials' extortion Solving the problem of being stalked Enforcing loan repayment Theoretical Implications Soft violence Corruption Conclusion 5. The Red Mafia The Buying and Selling of Military Positions The lack of institutional means for career advancement Informal practices Political-Business Alliances The Xishan Society Corrupt business-politics nexus The Role of Guanxi in Facilitating Corrupt Transactions Conclusion 6. The Red-Black Collusion The Chongqing Crime Crackdown The Buying and Selling of Public Offices Organized Crime in Chongqing Structure Activities The Role of Guanxi in Building the Political-Criminal Nexus Initiating guanxi Building guanxi Using guanxi The importance of middlemen Public Power as a Commodity Conclusion PART III - Conclusions and Reflections 7. The Mafia and the State The Sicilian Model The Chinese Model The Black Mafia The Red Mafia Guanxi practice as a social evil The Mafia and Politics Implications for Research 8. China's War against Mafias Anti-crime Campaigns Xi's Anti-corruption Campaign Severity, Swiftness, and Selectivity Targeting Corrupt Guanxi Networks Marginalizing the Rule of Law Conclusion Appendix I The Green Gang's Ten Great Rules The Green Gang's Ten Prohibitions Appendix II Interviews and Focus Group Discussions Bibliography