Global Policy Forum

By Francesco Sisci

The emergence of triads linked with mainland China is drawing attention to the rapid growth of crime and corruption in China. Moreover, the triad phenomenon is a global concern, as Chinese gangs are active in Paris, Rome and New York.

The danger is that criminals create an economy parallel to the legal economy, creating entanglements that can influence the orderly proceedings of the official one. Criminals may develop political muscle to defend their illegal business interests that might bind and influence the international order, lending resources and safe havens to terrorists.

Just as the connection to the Italian homeland was important to the Mafia operating in the United States, so the mainland connection can be an important asset for Chinese criminals active elsewhere. Yet the situation in China is complex because China is not a fully developed market society.

The economic reforms inspired by Deng Xiaoping eventually opened the floodgates for a market economy. But they did so without any regulatory base; changes in actual operations preceded changes in the rules. Regulations were, and still are, drafted on the basis of concrete cases - regulators try to see how things work first and then regulate based on the actual experience.

Before Deng, everything not expressly permitted was forbidden (the opposite of Western laws, under which, in keeping with the Roman tradition, everything not expressly forbidden is permitted). From Deng onward there were hefa (literally "legal"), feifa ("illegal") and something in between that had no name but, if one was forced to, was referred as weifa (roughly "not in the law"). The three terms established three sets of behavior: the hefa was something surely and definitely approved, and it was the only sure thing, while the feifa and weifa could move.

The feifa was something forbidden but, because of the ongoing structural reforms, many things that were in a given moment forbidden could easily become weifa or hefa. For instance, there was the subletting or even the sale of the house where one lived that was allotted to one but in theory still belonged to one's working unit. These things occurred but were widely tolerated although they were not strictly legal, or hefa.

Many social actions - arguably most of them - in China are still weifa, as many social behaviors were and still are in a no-man's land. Meanwhile the general legal culture has moved toward the Roman conception (everything not expressly forbidden is permitted). However, there was, and still is, general confusion between what is legal and what is illegal, and there is an even larger confusion between what is morally right and morally wrong, as both Confucian and communist values have been shattered and new values have not been established in their place.

In this legal and moral vacuum it is not as easy as it may seem to tell what is a criminal activity and what is not. Is procuring a wife for a farmer in Anhui illegal, or despicable, or both? Yes, if you are thinking that the woman was lured with promises from Sichuan and then sold in Anhui to a husband who treats her badly. No, if you think that you are providing a social service to some poor fellow who doesn't have a wife and to a woman who goes to live in a wealthier environment. There is concrete evidence for this confusion: police say that some 80 percent of the women freed from their forced marriages refused to go home, something that would not be the case if the women were really abducted.

Such a shifting line on morality and legality is certainly not unique to China. In the 19th century, drug trafficking was legal; indeed, the purpose of the Opium War was to force China to liberalize this trade. Trade in slaves and weapons was also legal. Subsequently, Western society took a moral stand and decided to make drugs and slavery illegal - ie, there was movement culturally and legally. In Maoist China, every kind of trade was illegal. Deng could have opened the market in a piecemeal fashion like Mikhail Gorbachev, but instead decided to go for wholesale opening of everything. Gorbachev destroyed the USSR; Deng didn't destroy China. However, for a long time there is going to be a lot of fine-tuning to sort out good and bad businesses, to legalize the former and make the latter illegal.

This is the backdrop for the activities of, say, the Chinese army and its former smuggling of goods. In the absence of law, the People's Liberation Army (PLA) could go into business without any restrictions. One could say that opening brothels and so on was despicable, but one could make the same argument about trading drugs during the times of the Opium War. Was the queen of England running a Mafia trade when she forced China to legalize opium? If the answer is yes, the PLA was also a Mafia organization. If the answer is no, then we are dealing with historical trends, not with criminals. In fact, if a political institution deals in an activity, even if illegal according to contemporary laws, we have a big political issue but no crime. This case is even more so if the queen of England, or the PLA, is de facto or de jure the ruler of the country, in which case what they do is allowed and they do not have to ask permission for their actions.

Things change, however. The PLA was ordered to stop all business activities, and so it did, including smuggling, which beforehand was not considered smuggling, but say, if for oil, strategic oil requisition for the strategic benefit of the country. There might still be some cases of smuggling by the PLA but on a much smaller scale and, as it is now not sanctioned by the top brass, it really involves corruption of officials.

But previously, the Chinese army, like the queen of England, did not need the triads' crooks to conduct its dirty business, it could do it itself. Any state conducts covert operations through its secret services, performing a vital role for national security, but these activities, conducted by agents and sanctioned by the top political leaders, are for the good of the state, not for that of a small gang.

For practical purposes it is important to distinguish between "dirty activities" conducted directly by a political institution and "dirty activities" conducted indirectly by a political institution through professional independent crooks. Without this difference everything is crime (or vice versa nothing is crime) and we get nowhere: crime overwhelms us. We need clear-cut, reachable objectives, which must be limited in scope and thus in time, otherwise the Mafia stops being a law-and-order issue and becomes a metaphysical force spanning thousands of years of history, as the Mafiosi and triad members like to describe their organizations.

Thus we are left with an enormous task in China: labeling. What is the real political-criminal nexus (PCN) that experts on organized crime such as Roy Godson think is the threshold promoting an organized gang into a pervasive Mafia-like organization? There are a series of questions. To what degree is politics is involved in a criminal activity? Which are criminal activities and which are new business actions, with blurred edges because of ongoing historic change? Is it corruption when a politician is not involved with crimes but only with businessmen? What is the difference between corrupt business and freewheeling business?

In China, these things are not clear for several reasons, besides the above-mentioned lack of definite laws and moral standards. There is lack of transparency in the Chinese system. The government doesn't want to show its dirty linen and it is afraid of the domestic political impact of this complex situation, which would reinforce the Maoist faction against democratization and modernization. Furthermore, the government doesn't know how to label each supposed criminal action - which is Mafia, which is organized crime, which is a gang, which associations with charitable purposes resort to violent actions sometimes. These difficulties take place while ongoing structural change move the goalposts every few months, and while the burgeoning middle class would often rather side with the triads than with the police; thus the central government, certain that it must back the middle class for national development, tries to rein in some police actions. In this situation the police, feeling left out and wanting part of the action, get into bed with the triads. Furthermore, the successful triads shed their criminal activities and turn 100 percent legal. In sum, it is a jungle.

Despite this muddle, there are certainly clear PCN cases and full-blown Mafia-type associations. One should be clear about them, identify them without confusing them with criminal gangs or corrupt officials. Only this will clear some ground in the ongoing social process and will identify the level of risk.

In fact, while it is important to strike hard against the triads, it is important to leave a lot of leeway to normal business (including, for instance, cases of tax evasion). It is politically and globally important that China develops its middle class and its new capitalists, and they need the "primitive accumulation" that has brought capitalism elsewhere.

Because of the poor management of the banking system, the central government is, by tolerating tax evasion, de facto financing small businesses, as Italy did in the '50s and '60s. This doesn't strain the financial system; since the banks are badly managed and demand high interest rates, there is a more effective allocation of resources if a business does not go through the state system.

It is true that this creates a murky area that, in China as in Italy in the past, is exploited by Mafia-type organizations. But the answer can't be the full taxation of small businesses, as that would strangle them and thus also suffocate China's transition out of socialism.

It is a very delicate job that the Chinese are trying to grapple with. But the development of the middle class will certainly provide the most effective limit to the growth of triads.

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