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Editor’s Note: This piece is part of an ongoing series on organized crime worldwide.

Images of a shipping container full of filthy, sick (and sometimes dead) Chinese immigrants flash across TV screens or newspapers fairly regularly. Probably the highest profile groups behind this human smuggling are a subgroup of Chinese organized criminal organizations known as “snakeheads.” But domestically, organized crime in China is much more diverse. Just as in Italy, Russia and Japan, Chinese organized criminals control territory, extort businessmen, traffic drugs and prostitutes and partake in government corruption.

Unlike in Italy, Russia and Japan, however, Chinese organized criminal groups have not been able to break out on the national stage. By opening up economically, Chinese criminals have capitalized on increasing domestic wealth. But the Communist Party of China (CPC), by keeping a firm grip on the political system, has prevented any single group from rivaling the central government in any way. Beijing has shown its ability to crush religious, political and militant movements, and has succeeded in preventing organized crime from becoming a nationwide force.

Because of this, organized crime in China is extremely localized. Groups can control criminal activity in townships by relying on corrupt local politicians. But as soon as the groups begin to outgrow their localized area, the central government cracks down on them with arrests and harsh penalties.

Hemmed in domestically, organized criminal groups in China are forced to go abroad to grow. Their influence is increasing everywhere from the United States to South Africa to the Philippines. These groups traffic drugs, smuggle human cargo and run criminal activities in Chinatowns across the globe.

The History of Chinese Organized Crime

Chinese organized crime originated in localized secret societies of rural China. The southeastern province of Fujian was — and is — one such hot spot. It is thought to have been the birthplace of the Heaven and Earth Society — a secret group of Buddhist monks who banded together in the mid-1700s to defend against an emperor who thought the group was too powerful.

In Western countries, this group became known as the Triad — a name that reflects the triangular symbol of the Heaven and Earth Society but is now a generic Western label for Chinese organized crime. Today, there are many different varieties of Chinese organized crime, including ethnic and regional groups, not just the Heaven and Earth secret societies.

As with other organized criminal groups, there is a degree of legend behind the stories explaining the group’s founding. Chinese secret societies in fact are more likely to have formed gangs for protection, only going on the offensive once they grew stronger than the forces against which they had banded together. They accordingly became involved in theft and protection rackets, and imposed very expensive dues to join the gang. In his book “The Dragon Syndicates,” Martin Booth calculates that dues may have equaled up to one month’s salary, and that, in order to afford the payments, members were forced constantly to recruit new members, as dues flowed up the chain of command. This pyramid-like structure led to the gangs’ growth and ultimate involvement in shady activities: Gangs were moneymaking ventures, and bosses would not have discriminated against a member who acquired his dues through dubious means.

During the 1800s, these local gangs entered the opium trade and expanded into other areas of China. Due to the physical size of China, the central government had (and still has) trouble exerting its control over the entire country. Efforts by the central authorities to stamp out criminal groups tended only to scatter the gangs –- ironically, helping spread their influence well outside Fujian. By the early 20th century, the most successful criminal organizations were operating in Shanghai.

In 1844, American, French, English and other colonial interests carved up Shanghai. These countries staked out districts of the city from which they operated foreign trade and investment. By the early 20th century, Shanghai was extremely wealthy, but was plagued by dysfunctional law enforcement.

Each foreign-controlled sector (known as a “concession”) was responsible for administering activity in its area, meaning that each concession was under the jurisdiction of a different law enforcement agency. The Chinese had been forced to grant extraterritoriality to the foreign concessions, and so had no law enforcement jurisdiction in these areas. Criminals dealing in everything from gambling to prostitution to opium knew about Shanghai’s fractured law enforcement, and exploited it. If the police in the French concession were after a specific gang, the gang could quickly move to the American concession to avoid arrest. Crossing the street was equivalent to crossing an international border between two countries that did not coordinate law enforcement activities very well — if at all.

One gang rose above all the others: the Green Gang. Initially led by Huang Jinrong (the police chief of the French sector of Shanghai in its glory days), Du Yue-sheng ran the operation. While Huang may have set the precedent of combining local officialdom and crime, Du took it several steps further by becoming a socializing philanthropist who was not shy of the limelight. Du and his gang provided a level of uniformity across Shanghai that local officials could not. Whereas official administrators were bound to their own jurisdictions, the Green Gang and Du operated all over the city. His universality in the city was an important strength that made governments and businesses beholden to the Green Gang.

In 1923, Du allied the Green Gang with Chiang Kai-shek’s Nationalist movement to put down communist forces in Shanghai. He also helped Chiang defend Shanghai against the Japanese when they invaded in 1937. But, ultimately defeated by the communists, the Green Gang scattered. Mao Zedong’s takeover in 1949 sealed the fate of a great majority of organized criminals in China. Criminals fled Shanghai and China for Hong Kong and Macau, while some followed Chiang Kai-shek to Taiwan, where they re-established their criminal enterprises. None of these successors reached the level of organization, wealth or influence of the Green Gang attained during the early 20th century in Shanghai.

Economy

Organized crime in China virtually disappeared under Mao’s rule. Any rival to the central state was unacceptable, and most experienced criminals had fled China and were now operating on its periphery. The opium trade dried up, gambling was outlawed and subversive groups were disbanded under the threat of death. China under Mao closed up, and having been burned by foreign involvement in the past, removed itself from foreign dependencies. By 1975, starvation and economic stagnation led to plummeting living standards. The stability that Mao had intended to impose on China from the center via various isolationist measures began to unravel and produce destabilizing forces. Poverty and starvation now trumped foreign interference as the major threat to the government.

So, in 1975, Deng Xiaoping initiated a series of economic reforms that led to the opening of China. The reforms devolved economic decisions to the local level, letting states and townships take responsibility for their economic activities. The result was an economy less regulated by the central government, but still very connected to politics on the local level. Furthermore, special economic zones (SEZ), several of which opened up in Fujian — the historic birthplace of Chinese organized crime — allowed individuals to set up their own businesses.

Entrepreneurs and local politicians saw the opportunity to make money and quickly drove a wedge through this crack in economic regulation and started enterprises in anything they could get their hands on. The legal code was convoluted, contradictory and — as long as politicians and party officials were making money off of the dubious enterprises — largely went unenforced.

The economic liberalizations allowed enterprises to experiment with new business models, and many of the enterprises pushed the envelope of legality. Some ambitious businessmen partnered with companies from Taiwan, Macau and Hong Kong, where organized crime had a strong economic representation. For a few, the combination of murky business operations in China along with criminal partnerships in Taiwan, Macau and Hong Kong resulted in outright illegal operations. As entrepreneurs started dealing in narcotics, human smuggling and extortion, cooperation with local authorities grew more and more important. Entrepreneurs depended on local economic bureaucrats and law enforcement officials for protection, and local officials in turn depended on the entrepreneurs for money, business ties and their efficiency. As long as the new enterprises did not flaunt their illegal activities, the authorities turned a blind eye.

Illegal Drugs

China’s experience with the British opium trade during the 19th century had led to a zero-tolerance policy for drugs during Mao’s rule. But as openings in the economy emerged under Deng, organized criminals were attracted to the profits that narcotics brought in. Geographically, China straddles the drug-producing areas of the Golden Triangle along with Laos, Myanmar and Thailand, and it is near the Golden Crescent — the poppy-producing areas of Afghanistan and Pakistan. Overland drug routes from China’s frontier in the west to the ports in the east became profitable under the guise of legitimate trade. By the 21st century, Chinese criminal enterprises had begun branching out from heroin to ephedrine. In 2005, the U.S. State Department estimated that the Chinese narcotics industry was worth $24 billion.

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