China Security Memo: Bribing With Residential Status

10 MINS READJun 21, 2011 | 21:41 GMT

A New Type of Informant Reward

The Zengcheng Public Security Bureau published a notice June 19 in the Zengcheng Daily offering cash rewards of 5,000 to 10,000 yuan (about $773 to $1,545) and urban residency status to informants who provide information on the rioters involved in the June 10-12 unrest in Zengcheng, Guangdong province. Those riots, along with an earlier one June 6 in Chaozhou, Guangdong province, were triggered by minor violent incidents and involved mainly Sichuanese migrant workers dissatisfied with their pay and treatment. Rewards for criminal tipoffs are common in most countries, including China, but the offers of hukou, or residency status, and "outstanding migrant worker" titles are a new tactic used to sow division among migrant workers and prevent them from coordinating their efforts. Like many of the 260 million migrant workers across the country, the Sichuanese workers in Guangdong province see themselves as underpaid, unfairly treated, and discriminated against by authorities, and they are deprived of access to public services because of their outside residency status. Yet they come to Guangdong for employment because the coastal-interior wealth divide means higher-paying jobs in the coastal factory towns. To illustrate that migration, Dadun, one of the villages in Zengcheng, is 60 percent Sichuanese, one local told South China Morning Post. Only about 10 percent of its population are local Guangdong residents. The recent unrest is a reflection of the migrant workers' dissatisfaction, particularly when the wealth of Guangdong is so visible. The recent protests showed the potential for Sichuanese laborers to coordinate and organize their protests. To disrupt this possibility, local authorities have offered these incentives essentially to divide any potential groups. Acquiring an urban hukou for the area where one resides entitles their family to social services, from insurance to education. The difficulties of acquiring hukou are a major migrant complaint, one that the Zengcheng government believes will incentivize migrant workers to inform on each other. The outcome of this tactic is unclear. It will certainly raise suspicions with anyone trying to organize protests against the local or national government that some of their cohorts may be informers. It could also provide good intelligence to local security services in order to arrest those involved in the protests, particularly any leaders. Zengcheng authorities began offering the initial cash payments by June 12, and that may have helped lead to the arrest announced June 17 of 19 people on charges including obstruction of official affairs, causing a disturbance and intentional damage of property. However, the tactic could also backfire and encourage migrant labor forces to more closely scrutinize and root out potential informers or government collaborators in their midst. The other question the measure raises is whether bringing up the hukou as an incentive will actually exacerbate anger over the issue, since the hukou system's negative effects on migrant workers are increasingly a source of controversy. One local daily, the Beijing News, even ran a story June 20 questioning whether such incentives would "put salt on the wound." Local governments have an incentive to quell unrest as quickly as possible — their performance reviews are based on this. The move in Zengcheng to counter the protests may be a quick and desperate response, rather than a well developed tactic ordered by Beijing, and Zengcheng could very well back away from the proposal or fail to implement it. If it is implemented, the results of the measure will be telling, and if it is successful, Beijing may try to enact it in other places; if not, Beijing may punish local Zengcheng officials for stepping out of line.

Leaked Economic Data

Zhang Huawei, a director of the Beijing People's Procuratorate (similar to a prosecutor's office) confirmed rumors June 20 that five people, including a secretary at the National Bureau of Statistics (NBS) administrative office, were being investigated for leaking consumer price index (CPI) data before their official release. Official economic data commonly "leaks" early, especially in China, and prosecutions for the offense are rare. But the fact that Beijing is investigating the recent June 14 release of May CPI data may indicate its concern over inflation, as well as involvement of foreign media in propagating these numbers. When NBS spokesman Sheng Laiyun released the statistics, he mentioned that someone was under investigation for releasing the statistics early and criticized those involved. Beijing has become notably more concerned about the CPI — the official measure of headline inflation — in recent months due to the growing political sensitivity over price increases and their potential consequences for social stability. Thus far in 2011, inflation has officially risen above the government's annual target of 4 percent and is threatening to rise above 6 percent in the coming months. In important categories like food, the rate is higher than 10 percent, and many believe the official figures are heavily skewed. This persistent relatively high inflation has added to economic and social problems, frustrating the government's attempts not only to contain inflation but also to control the public's expectations, since expectations of more price increases fuel further inflationary behavior. In China, the news organization Reuters has earned the nickname "Paul the Octopus," the name of the octopus legendary for predicting the German World Cup football team's record, due to the organization's ability to consistently quote analysts who accurately predict China's CPI data prior to its official release. The implication is that Reuters may have developed a source within the NBS, something Beijing obviously has no desire to see foreign news agencies doing. Such data collection could even be considered espionage. However, it is not at all clear that Reuters has a source within the NBS. Economists are able to predict with considerable accuracy what the official inflation rate will be each month. Moreover, there are few economic topics that receive more scrutiny than China's inflation trends and overall economic performance, so leaks of this information are highly sought by various players in the markets and in the media. The results of this investigation are worth watching — they may indicate the methods by which Beijing is seeking to tighten its grip over the release of official statistics and the role of foreign interests in obtaining official information. Beijing is well-known for manipulating data for political purposes, and leaks threaten its ability to have full control over reporting. Moreover, the central government is trying to dampen inflation expectations through various tools, and timing the release of significant economic statistics is one potential means of doing so. Finally, in a volatile economic environment, the last thing Beijing wants is for a significant leak to cause greater volatility in financial markets or among the public. It will therefore strive to maintain total control over the publication of state statistical information — even if those attempts prove unsuccessful. (click here to view interactive map)

June 14

  • Chinese media reported a sudden growth in websites that allow users to report bribes they have paid, based on an Indian website A handful of Chinese websites, including one with the name "I made a bribe," saw tens of thousands of visitors since they went online June 10. Most of these websites are unregistered officially because the their operators did not want to use their real name for fear of punishment from the government. The Ministry of Supervision would not comment on the sites' legality, but Chinese scholars have pointed out that official bribery-reporting mechanisms already exist.
  • An internet post detailing the beating by urban management officers, known as cheng guan, of a female fruit vendor in Chongqing began circulating on Chinese websites. The original June 14 post included a description of the altercation and pictures of the victim before she was sent to the hospital, but it has since been deleted. Though copies of the post have spread, the incident has not been verified. The local district spokesman told reporters June 15 that the fruit vendors were operating on a restricted road section and the vendor fell accidentally and was injured.

June 15

  • The deputy secretary of the Honghe Prefecture Discipline Inspection Committee in Yunnan province announced that five officials were fired and another fifteen were disciplined over a Nov. 18, 2010, coal mine dispute. (Tunnels for the Xiaosongdi coal mine and the Yuejin coal mine crossed paths underground, and coal mine owners organized gangs to fight over disputed territory.) Nine people were killed and 48 injured in the clash, which involved weapons such as steel pipes to industrial explosives.

June 16

  • A committee that sponsored a financial study paper competition retracted a report describing ways corrupt Chinese officials take money overseas and said the report's author had apologized to the public for using unverified data. The report, which seemingly originated in the Anti-Money Laundering Monitoring and Analysis Center, set up by the People's Bank of China, used open-source information to analyze how money from graft was transferred to other countries, to which the corrupt Chinese officials would eventually move. One statistic said 18,000 corrupt officials had fled abroad since the mid-1990s with 800 billion yuan (about $123 billion). While the specific figures in the report may not have been accurate, the overall trend has been widely acknowledged.
  • An altercation between a man and four cheng guan occurred June 13 in Zhenxiong, Yunnan province, Chinese media reported. The man claims he approached the officers while they were placing a lock on the wheel of his car, allegedly parked illegally, and was pushed and beaten in an argument. The officers claim the man started the fight. Whatever the case may be, this is another example of the low regard in which cheng guan are held by the public — as well as the controversial nature of their activities.
  • Gunmen in three vehicles surrounded the car of a coal industry businessman and fired on him while he was driving in Huainan, Anhui province. No injuries were reported in the incident, and two suspects were arrested June 17. The attack was believed to be retaliation for a business dispute.

June 17

  • The Changsha Public Security Bureau announced that 11 suspected members of a gang had been arrested since March 4 on drug charges in Hunan province. Some of the suspects arrested earlier reportedly provided information that led to later arrests. The different stings resulted in the seizure of quantities of methamphetamine, magu (similar to Ecstasy), and a gun. The two leaders confessed they arranged to traffic drugs from Huizhou, Guangdong province, to be sold in Changsha.
  • The Central Tibetan Administration (the Tibetan government in exile) claimed that nine Tibetans were detained from Dhargyal monastery in Garze, Sichuan province, after staging protests during a Buddhist festival.
  • The Dehua Public Security Bureau announced the arrest of 26 suspected members of a child trafficking group and the rescue 31 children in Fujian province since January 14.

June 20

  • Two bank employees were killed in a robbery in Tianshui, Gansu province. The suspects took 53,000 yuan in cash; it is unclear how the employees were killed. The incident is under investigation.

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