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2014 Wang Peng 1033715 Et This electronic thesis or dissertation has been downloaded from the King’s Research Portal at https://kclpure.kcl.ac.uk/portal/ Red Mafia, Black Mafia in China The Rise of Extra-legal Protection in a Guanxi-based Society Wang, Peng Awarding institution: King's College London The copyright of this thesis rests with the author and no quotation from it or information derived from it may be published without proper acknowledgement. END USER LICENCE AGREEMENT Unless another licence is stated on the immediately following page this work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ You are free to copy, distribute and transmit the work Under the following conditions: Attribution: You must attribute the work in the manner specified by the author (but not in any way that suggests that they endorse you or your use of the work). Non Commercial: You may not use this work for commercial purposes. No Derivative Works - You may not alter, transform, or build upon this work. Any of these conditions can be waived if you receive permission from the author. Your fair dealings and other rights are in no way affected by the above. Take down policy If you believe that this document breaches copyright please contact [email protected] providing details, and we will remove access to the work immediately and investigate your claim. Download date: 30. Sep. 2021 Red Mafia, Black Mafia in China The Rise of Extra-legal Protection in a Guanxi-based Society Peng Wang This dissertation is submitted to King’s College London to fulfil the requirements for the Doctor of Philosophy in Law February 2014 0 Declaration This dissertation is the result of my own work. No part of this work was done in collaboration. I published a shorter version of Chapter VI as ‘The rise of the Red Mafia in China: a case study of organized crime and corruption in Chongqing’ in Trends in Organized Crime 16, no. 1 (2013): 49-73. I presented a shorter version of this thesis, ‘Extra-legal protection in China’, at the International Conference on Asian Organized Crime in Hong Kong, May 2013. Statement of Length The dissertation does not exceed the word limit of 100,000 words. Contact [email protected] 1 Abstract Chinese businesses are turning away from the legal protection offered by state- sponsored institutions and legitimate private agencies and choosing instead the extra-legal protection services supplied by organized crime groups and corrupt government officials. This thesis develops an empirical analysis of the rise of extra- legal protection in post-Mao China. It emphasizes two major types of extra-legal protectors in contemporary China: corrupt police officers (‘Red Mafia’) and locally- based criminal groups (‘Black Mafia’). It explores why mafia groups re-emerged after China adopted its reform and opening-up policies in the late 1970s. In particular, it focuses on essential conditions directly related to the rebirth and subsequent growth of the Chinese mafia. The aim of this thesis is to test the economic theory of the mafia, to demonstrate the strengths and limitations of this theory when it is applied to China, and to establish an updated theory through a combination of economic theory and social capital theory. Using published materials as well as fieldwork data comprising of 33 individual interviews and nine focus group discussions with a total of 28 participants from two Chinese cities (Qufu and Chongqing), this thesis incorporates the concept of guanxi—a Chinese variant of social capital—into the discussion of state weakness and the rise of mafias. It demonstrates the corruption-facilitating roles of guanxi, i.e. how guanxi distorts China’s legal system by facilitating the buying and selling of public offices and promoting the formation of corrupt networks between locally- 2 based criminals and government officials. The result, the Red Mafia, is a clear indicator of state weakness. The clash between guanxi and the formal legal system prevents law enforcement agencies from being able to provide sufficient protection for citizens, contributing to the rise of the Black Mafia. The analysis of the negative aspects of guanxi provides a new perspective for understanding corruption and organized crime in contemporary China. 3 Table of Contents Abstract ..................................................................................................................................... 2 Acknowledgements ................................................................................................................... 8 Chapter I Introduction ............................................................................................................ 10 1. Extra-legal protection with Chinese characteristics .................................................... 13 2. Corruption, guanxi and mafias .................................................................................... 16 3. Map of the Thesis ........................................................................................................ 21 Chapter II Chinese organized crime: its definition and history .............................................. 29 1. Definitions ................................................................................................................... 33 1.1. The legal definition of ‘black society’ in China .................................................... 34 1.2. Under western eyes: ‘organized crime’ and ‘mafia’ ............................................ 39 2. The origins of organized crime in China ...................................................................... 50 2.1. Chinese secret societies ...................................................................................... 50 2.2. The formation of the Red/Green Gang in the late Qing dynasty ........................ 58 3. Chinese organized crime in the Republic of China (1912-1945) ................................. 61 3.1. The emergence of ‘three Shanghai tycoons’ ....................................................... 62 3.2. Three Shanghai tycoons as businessmen ............................................................ 65 3.3. Collusion between the Shanghai Green Gang and the Chiang Kai-shek government ..................................................................................................................... 73 4. The end of ‘three Shanghai tycoons’ and the disappearance of Chinese secret societies (1945—1978) ........................................................................................................ 75 5. The resurgence of Chinese organized crime in post-Mao China ................................. 80 5.1. The proliferation of criminal groups and the first ‘strike hard’ campaign 1978 – 1989 80 5.2. The development of organizations with an underworld nature as well as the formation of the political-criminal nexus in the 1990s ................................................... 83 5.3. Gangs as business entities and the changing role of corrupt police officers in the new century ..................................................................................................................... 89 6. Conclusion ................................................................................................................... 98 Chapter III Mafia emergence: an updated economic theory of the mafia........................... 100 1. An economic theory of the mafia: state failure and the rise of mafias .................... 102 1.1. Defining feature of the mafia: ‘protection’ or ‘violence’?................................. 103 1.2. The ‘property rights theory of mafia emergence’ ............................................. 109 1.3. The ‘property rights theory of mafia transplantation’ ...................................... 112 4 2. The private ordering literature: the emergence of private enforcement mechanisms under dysfunctional law enforcement .............................................................................. 114 2.1. Relationship between Private Contract Enforcement and Dysfunctional Law Enforcement .................................................................................................................. 115 2.2. Non-violent means of enforcement .................................................................. 119 2.3. Violent means of enforcement .......................................................................... 121 3. An updated economic theory of the mafia: ‘supply—market competition—demand for extra-legal protection’ ................................................................................................. 124 4. Applying the updated theory to interpret the rise of extra-legal protection in China 134 Chapter IV Methodology, data collection and new hypotheses .......................................... 138 1. The choice of methodology ....................................................................................... 139 2. Appropriate use of the case study method ............................................................... 143 3. Research design ......................................................................................................... 145 3.1. Research sites .................................................................................................... 146 4. Challenges in data collection ..................................................................................... 152 5. Social embeddedness: Questioning
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