The Chinese government’s financial predicament has led local authorities to routinely engage in cross-province “looting” of private enterprises in other regions. Referred to as “long-distance fishing” in legal circles on the mainland, an official from Guangdong province disclosed that nearly ten thousand businesses in Guangzhou alone have been affected. While the central authorities in Beijing have recently declared their intention to curb “profit-driven law enforcement,” experts believe that the top levels of the Chinese Communist Party (CCP) are aware of the financial difficulties faced by various regions and rely on local governments for stability, effectively condoning opportunistic law enforcement in different regions.
According to a report by the mainland newspaper “Huaxia Times” on October 16, the Guangdong Provincial Situation Investigation and Research Center released its “Guangdong Provincial Situation Report” in April this year. One subsection in the report read, “Internet companies in different regions are subject to profit-driven law enforcement, making it difficult for them to survive.”
The report highlighted that in recent years, cities in the Pearl River Delta such as Guangzhou, Shenzhen, and Dongguan have become hotspots for enforcement across regions. Taking Guangzhou as an example, since 2023, nearly ten thousand companies including Pupu, Yijiankang, and Jiujun have faced enforcement actions in other regions. Most of these companies are privately owned, and many cases exhibit clear profit-driven motives.
This type of unlawful cross-regional arrest and seizure of assets from private business owners and companies, driven by financial gains, is termed “long-distance fishing” in legal circles. The usual modus operandi involves forcibly sealing and freezing company assets during the investigation phase, arresting corporate executives and senior management, and then leveraging threats and intimidation to achieve financial settlements.
The report also mentioned several cases. In one instance, a county public security bureau in Chongqing filed a fraud case after claiming that a local resident’s purchase of a “precious bathing pack” was invalid. A team of over 300 police officers from Chongqing then descended upon Hangzhou, seized the company producing the “precious bathing pack,” arrested 155 individuals, with the total amount involved reaching an astonishing 200 million yuan (RMB).
Additionally, in a county north of Henan province, authorities acted against a Guangdong-based company producing health products following a customer’s complaint about the purchased products. The local officials apprehended the management and employees of the Guangdong company, with the alleged amount involved reaching several billion yuan.
There was also a case of “fishing law enforcement.” In a county in Henan province, an individual referred to as a “collector” entrusted a Shenzhen-based auction company to appraise their “collection,” standard practice in the industry for which a 5,000 yuan appraisal fee was charged. After paying the fee, the “collector” reported a fraud case, prompting the county public security in Henan to file a fraud charge, leading to the cross-provincial arrest of 47 employees of the auction company and the court’s imposition of significant fines, resulting in the freezing of tens of millions of assets belonging to the auction company.
In Zhangjiajie City, Cili County of Hunan province, the police station chief, Liu, explicitly told the legal representative of the Wuhan Yuancheng Group during the investigation of alleged illegal operations: “The initial intention of this case is to make some money, one or two million will do.”
Chinese media outlets commented on the situation, noting that in recent years, as local finances have become increasingly strained and due to the revenue from fines going into local coffers, many local judicial authorities have turned…
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