The government is reacting to a July incident, when a mysterious fire killed five government investigators in Shantou. The suspected arson was likely a reaction by local officials threatened by the central government's anti-corruption campaign.
Investigators were uneasy about local authorities and ordered 500 police officers to surrender their pagers and mobile phones. Concerned about their safety, the taskforce even brought in its own security guards and cooks. The investigation is expected to implicate high-ranking local tax officials and Communist Party leaders.
Burned by the first investigation, the central government is taking no chances this time. Beijing is extremely concerned about losing control over the periphery, and has taken pains to suppress local resistance. Beijing will make an example of Shantou, imposing severe penalties to demonstrate its authority. But the tug-of-war over local control is not yet won, leaving foreign investors in a difficult position.