China Security Memo: March 11, 2010

[Teaser:] Operating in China presents many challenges to foreign businesses. The China Security Memo analyzes and tracks newsworthy incidents throughout the country over the past week. (With STRATFOR Interactive Map)

Xinjiang in the Headlines

After convening the <link nid="156141">National People’s Congress</link> on March 5, China’s leaders have addressed the issue of security several times, especially as it relates to the Xinjiang Uighur Autonomous Region, which was <link nid="141738">rocked by riots in July 2009</link>.On March 7, Xinjiang Gov. Nur Bekri told reporters that separatists will continue to refine their methods and seek opportunities and that he expects more attacks.Bekri did not elaborate, but his sentiment has been echoed in the press, and a current focus of the government is domestic terrorism and social instability.

The day the congress opened, Gen. Yu Linxiang, the political commissar of the country’s paramilitary People’s Armed Police (PAP) and part of the Peoples Liberation Army delegation at the congress, said that the central government has allocated another 600 million yuan (approximately $87.85 million) for the PAP in Xinjiang, which is the focus of the police antiterrorism campaign. The money is meant to ensure that the PAP is better equipped and more prepared to handle outbreaks like the one in July 2009.Quick-reaction forces have been set up in Xinjiang’s Kashgar, Hotan and Aksu regions and a new PAP detachment has been established in Urumqi, the capitalof Xinjiang (more on the PAP below).

According to another report on March 5, over 2,000 newly recruited police officers have completed a one-month training course and have shipped out to Xinjiang to beef up security forces.These new graduatesare the first wave of a planned 5,000-member “special police” force, an elite division under the PAP organized to tighten security in the region.Recruits are accepted into the unit only after passing rigorous exams, interviews and fitness evaluations, and most have at least three years of college (not common among ordinary Chinese police). The quality of the force highlights the emphasis the government is putting on security in Xinjiang.

In addition to this extra security, the central government is also working on an investment plan to build the region into an economic powerhouse, and one immediate result has been the rising stock prices of Xinjiang-based enterprises on both the Shanghai and Shenzhen markets.Preferential policies such as tax reductions and exemptions also are being discussed to boost investment in hopes that economic prosperity will contribute to peace in the region.

Regardless of these efforts, domestic separatism and terrorism, originating primarily from the <link nid="116428">East Turkestan Islamic Movement</link> in Xinjiang, remains a major concern nationwide (STRATFOR sources say the Shanghai government fears terrorist attacks during the upcoming World Expo, which begins May 1).Beijing also worries that Uighur militants training in Afghanistan and Pakistan will return to China to target security, government and energy assets.This concern has led to Beijing’s international-aid investment in both Afghanistan and Pakistan to promote development and stability in those countries.

Given the importance of <link nid="141891">Xinjiang as an energy corridor</link> and buffer region for China, the government is especially interested in containing unrest in the province for economic and geopolitical as well as social reasons. And it will continue to devote resources to the threat -- whether real or imagined, imminent or latent -- as long as it is perceived as one.

More on the PAP

The majority of the forces deployed to Xinjiang to deal with terrorism and contain civil unrest are members of the paramilitary PAP, which is a unique Chinese security force tasked primarily with internal security and counterterrorism.It consists of five specialized branches: Internal troops trained for riot control and Forestry, Gold Mining, Transportation and Hydropower personnel trained for a non-combat security role in those strategically important sectors.

The PAP was created in 1983 by merging the PLA’s Internal Guard Troops, Public Security Armed Police, Public Security Border Police and other PLA units that focused on internal security. As such, its command and control structure is complex.To clarify the PAP org chart, an Armed Police Law was passed in August 2009 that described a <link nid="144712">direct line between the PAP and the Chinese Military Commission (CMC) and State Council</link>, which have the ultimate authority over the force.Despite this clarification, the PAP’s command and control functions remain somewhat ambiguous, and information from various open sources seems to contradict the unit’s self-described structure.

STRATFOR sources confirm that, although some of the day-to-day operations of the PAP come under the control of the Ministry of Public Security (MPS), at times the CMC can assume control, trumping the authority of the MPS.Internal troops, which comprise the “sharp end” of the PAP and can serve essentially as light infantry, are responsible for guarding potential terrorist targets (such as embassies, airports, seaports and bridges)as well as ensuring internal security.The mobile units in this group, which consist of 14 infantry divisions transferred from the PLA to the PAP in 1996, are trained to respond to emergencies such as the July 2009 riots in Xinjiang and remain in Tibet in preparation for the March 14 anniversary of the 1959 Tibetan uprising (and the second anniversary of the <link nid="112915">2008 riots</link>).

The PAP’s command-and-control complexity remains despite various attempts to streamline it. What is clear is that the organization took on a much more dominant internal-security role following the 1989 Tian’anmen Square incident has been <link nid="1451">better funded and trained to handle riots and protests</link> in the years since. Most recently, the central government has started to raise the PAP’s national profile, especially in known hotspots like Xinjiang. This is further indication that domestic terrorism and internal security remains a paramount issue for Beijing.

March 4

  • The former director of the Putuo district in Shanghai was jailed for 14 years for accepting 2.84 million yuan (about $400,000) in bribes, some from real estate developers in exchange for land rights.

March 5

  • A trial began in Wuhan, Hubei province, in what is said to be the biggest baby-trafficking case in Chinese history.A 23-member family gang run by a woman is accused of trafficking 49 children across China in four years.They would buy boys for anywhere from 13,000 to 20,000 yuan (about $2,000-$3,000) and girls for 5,000 to 14,000 yuan (about $700 to $2,000) in Yunnan province and take them to Hebei and Shanxi provinces, where the boys could bring 40,000 yuan (about $6,000) and girls 20,000 yuan (about $3,000).The gang leader is said to have been trafficked herself when she was a young girl.
  • The former director of the ShaanxiProvincialLandAcquisitionCenter went on trial in Xi’an for corruption.Between 2003 and 2008 he allegedly accepted more than 3 million yuan (about $440,000) in bribes and embezzled over 35.9 million yuan (about $5.3 million).
  • The former director of the Qinghai provincial Public Security Bureau was jailed for 11 years in Xining for accepting 1.6 million yuan (about $230,000) in bribes and possessing 3 million yuan (about $440,000) worth of property from an unknown source.
  • Police in Hohhot, Inner Mongolia, have arrested six suspects since December who were all involved in a drug-trafficking ring, Chinese media reported.On Dec. 21, police began investigating one subject who received drugs from two other people.Three other suspects were later arrested and 1 kilogram of amphetamines was seized.
  • The former vice dean of the Election Department in Guangdong province went on trial in Guangzhou for accepting bribes to help one of the province’s richest men get elected to the National People’s Congress(NPC). The official is accused of taking 370,000 yuan (about $54,000) from Zhu Siyi, the general manager of the Yida Gas Development Co., over a three-year period.Zhu was elected to the NPC in 2008.
  • An anticorruption blogger revealed information that led to the investigation of an official in Jiangsu province, Chinese media reported. The former deputy chief of the Organization Department of Ganyu county, Jiangsu province, is being investigated for owning four luxurious villas and practicing “superstitious activities” by the Communist Party’s Disciplinary Commission. The blogger said the official, on the advice of his fortune teller, built structures in Lianyungang resembling Tiananmen Square.

March 7

  • Hundreds of villagers from Meitian village near Lufeng, in Guangdong province, raided the nearby village of Gangkou in an ongoing dispute over ownership of a road with ocean access.Because of numerous arson incidents, the entire village of Gangkou, which has a population of about 1,000, is now living in temporary shelters. Clashes between the two villages have been going on for the last year.

March 8

  • Li Kun, president of Shenzhen Airlines, was removed from his position and is being investigated for possible “economic crimes.”Li Zheyuan, the former president of the airline, was dismissed while being investigated for the same charge in November 2009.
  • The director of the Lufeng County Water Conservancy Bureau jumped to his death from a government building in Chuxiong, Yunnan province. Chinese media reported that he was over-stressed by the drought and quake relief work.Police reported that there is no evidence of foul play.
  • The legal representative of a Shanghai-based import-export firm went on trial in Beijing for defrauding a company out of 250 million yuan (about $37 million).He faked a written agreement in order to get a line of credit from the China Communication Construction Group.
  • A hacker in Beijing was jailed for blackmail.In February 2008, he allegedly hacked into the Renai Education’s Institute’s Web site, making it inaccessible, then offered to repair it for 5,000 yuan (about $730).
  • A man who practiced as a doctor without having a license in Gongzhuling, Jilin province, was jailed for three years and fined 10,000 yuan (about $1,500) for prescribing a pesticide as medication.The patient, who was suffering from a skin disease, died a week after he beganingesting the pesticide in 2008.
  • A man in Tangshan, Hebei province, was imprisoned for two years after making 800,000 yuan (about $117,000) off a pornographic Web site.He rented a server overseas and charged Chinese customers to use the site.
  • An unemployed man in Wuhan, Hubei province, was detained for vandalizing 20 ATMs in the last three months.He said he threw bricks and splashed red paint on the machines because he was angry about not being able to find a job andthat he was never trying to steal from them.
  • Railway Minister Li Zhijun announced that the “real-name” train-ticketing system tested during the Spring Festival would be implemented across the country, though the time table has not been specified.The goal of the new system is to curb ticket scalping.
  • The second of two inmates who escaped from a prison in Heilongjiang province on Feb. 23 was arrested in Harbin.A 50,000 yuan (about $7,000) reward was offered for his capture.
  • Reporting results of an ongoing investigation, Wu Qi, the disciplinary inspection chief for the General Administration of Sport (GAS), said that corruption was prevalent at all levels of Chinese football (soccer in the United States). On March 7, four referees, one of whom worked in women’s football matches, were brought in for questioning on suspicion of match fixing.GAS began the crackdown on Chinese football in November 2009 after match fixing had become a <link nid="150380">major issue</link> for one of China’s most popular sports.

March 9

  • Two men were arrested in Shanghai for stealing 740,000 yuan (about $100,000) worth of coupons for moon cakes.The men allegedly wrote fraudulent checks to a local food company to obtain the coupons.
  • Two suspected hackers were charged with shutting down a Shanghai computer system used for auctioning license-plate registrations.Their goal allegedly was to keep the price low so that one of the suspects could win the auction for the lowest possible price (in China, only a limited number of license plates are available to drivers and prices can be high).The suspectsallegedly used a Trojan-horse virus to infect 5,000 computers, which shut down the auction system.The auction ended with a final bid price of 400 yuan (about $60), compared to a final bid price of more than 30,000 yuan (about $4,400) during an auction one month earlier.
  • Members of a drug-trafficking gang lead by a Nigerian were sentenced in Dongguan, Guangdong province. The Nigerian and three gang members were sentenced to death and six others received jail sentences ranging five to15 years.

March 10

  • Police in Sanya, Hainan province, said they have seized over 2,500 pounds of illegal pesticides from 2,300 shops since Feb. 26.The crackdown was a result of finding cowpeas (which are related to black-eyed peas)in Hubei, Guangdong, Anhui and Jiangsu that were treated with isocarbophos, a highly-toxic pesticide that is banned from use on fruits and vegetables. The pesticide has been banned in Chinasince 2004, but it is believed that farmers in remote areas are still using it.
  • Police in Ganzhou, Jiangxi province, found 217 detonators and detained two suspects who are thought to have stolen the explosive components before the Lunar New Year.Police said they searched more than 5,600 households during the investigation.
  • The former president of Suzhou Water Supply Holding Ltd. was jailed for 20 years for corruption and embezzlement in Suzhou, Anhui province.