In its own way, doing business with China is like playing a game of croquet with the queen of hearts. The rules are not quite clear and they are subject to change at a moment’s notice. And if the queen is displeased, she cries “off with his head!” This was the case recently when a former Communist Party trusted chief and loyal party leader, Wang Min, was sent to prison for life – which means as long as he lives. He was convicted on hundreds of charges of bribery (amounting to $22 million), corruption, and negligence of duty. He neglected his duty by committing serious election fraud including vote buying. A year ago, Wang Min was still on the job as party leader in Liaoning and Jilin provinces. But, his corrupt deeds were said to have taken place over a twelve year span of time between 2004 and 2016. What changed to make Wang a criminal instead of a party faithful? Apparently, the rules were altered while he was waiting his turn to play.
By now, the changes in direction in China are well known to anyone observing the casinos in Macau. In 2013, Xi Jinping became the “Paramount Leader” of China; Chinese president, head of the Communist Party and chairman of the Central Military Commission and an ex-officio on the Politburo Stand Committee. When Xi set out to consolidate his power, one of his first acts was a campaign to crack down on corruption which often resulted in potential challengers going to jail. Some media reports have said that as many as 200 senior party officials bit the dust in the last four years. When Xi changed rules in China, things in Macau did not stay the same. Those corrupt officials seem to have been the backbone of VIP gambling revenue in Macau. As soon as the crackdown started revenues in Macau began falling dramatically.
President Xi is in the process of putting all of his allies in positions of power to replace the corrupt officials whose allegiance was questionable. The 19th National Congress of the Communist Party of China is coming up and observers think new rules will ultimately come out of the meeting. Except for Xi and his friends, no one knows what those new rules will be, but Macau can expect some changes also.
All of that is pretty much a rehash of old news, but coupled with more recent events it raises some questions. The casino industry in Macau is an intriguing mixture of modern and feudal business practices. There are billion-dollar palaces that cater to gamblers from Mainland China. Every element in those casino-resorts is as updated and modern as possible. But at the same time in a dark medieval manner, there are also gangs acting much as they did before the Communist takeover in 1997. The triad-like criminal gangs loan money to unsuspecting gamblers and then coerce them into a costly repayment. Sometimes they find it necessary to imprison the gambler until his family repays his debt. In July, one such gambler attempted suicide to escape his tormentors; each time he went to into a casino the gang sought to collect 30 percent of his winnings.
Between July 2016 and July 2017, there were 523 cases of kidnapping and 413 cases of loan sharking, a twenty percent increase over the previous year. In the first week of August, eight more people were arrested for loan sharking. The local press said they were part of a criminal gang from Jiangxi Province. Two weeks before that incident, fifteen people were arrested on the same kidnapping/loan sharking charges; the officers on the case say the gangs simply recruit new members every time one of their operatives goes to jail. If there have been that many arrests, there must have been many more times when a poor beleaguered gambler suffered and paid without ever being rescued by police. Extortion appears to be big business in Macau, but the headquarters of the gangs are all in China.
That is what I find most confusing; President Xi has taken charge of China; he is reshaping the Chinese economy and as much of the economy of the rest of the world as he can. At the same time, he is intent on wiping out corruption and crime from the Communist Party and Chinese business. His campaign targets all levels of crime or what he calls both the “tigers” and the “fleas.” Clearly, Xi has a grand plan for China and the Chinese people. Where do those criminal gangs fit into Xi’s vision for China?
It makes me wonder about that game of croquet with the queen of hearts, or more accurately, the red king of China. What are the rules of this game? Are those gangs just smarter than the officials in China and Macau, or is there a reason they are allowed to ply their trade just outside the doors of the billion-dollar palaces of Macau, are they neither tigers nor fleas?
