The Chinese authorities frequently take pleasure in mentioning the fact that in China, crime rates are among the lowest in the world. On the one hand, we need to understand that more so than with other countries, official statistics should be taken with a grain of salt as far as China is concerned. It is definitely not at all uncommon for crimes to be under-reported and for measures to be taken so that, for propaganda purposes, everything looks better on paper. On the other hand, however, there is independent research which confirms that crime levels (especially violent crime) are indeed on the low side in China. Most likely not at levels as low as those reported by the authorities but on the low side nonetheless.
Should this be considered good news?
As is frequently the case when it comes to China, the answer is yes… but at the same time no. If you are an investor who travels to China even occasionally or if low crime rates are a positive variable when it comes to the Chinese assets you have exposure to (and they probably are), then of course, there are valid reasons to be content with this status quo.
But moving on to the “no” dimension, it is worth pointing out that this comes at a price. To illustrate this rather bluntly: while China is for the most part a relatively safe country, it is also the nation with the highest number of executions worldwide. In fact, the capital punishment is applied more frequently in China than in all of the other countries combined. Now, of course, this is also a function of China’s 1.4 billion population. And yes, on a per capita basis, there are nations with a worse track record than China in this respect.
But still, the fact that this form of punishment is so widely-used (even for non-violent crimes such as embezzlement) as well as the fact that it enjoys a high degree of domestic support (despite quasi-unanimous Western criticism) are metrics which indicate that China still has a long road ahead of it until it reaches proverbial parity with the West.
However, as a preliminary conclusion, it is fairly safe to state that law enforcement in China is reasonably effective, even if this effectiveness comes with a price tag that tends to be hard to digest for Western observers. Moving on, it is worth mentioning that for the most part, four entities are responsible for law enforcement in China:
- The MPS or Ministry of Public Security, which handles the local law enforcement dimension in China through so-called PSBs or Public Security Bureaus… just think of them as police stations
- The MSS or Ministry of State Security, which handles country-level threats and this includes aspects that have to do with foreign intelligence. At the same time, however, they also have the right to detain individuals, just like PSBs, if there are reasonable suspicions that they are engaging in actions which threaten the nation in one way or another
- The CAPF or the People’s Armed Police Force, a security force that consists of over 1.5 million individuals and is responsible for anything from protecting so-called “persons of interest” to responding in the eventuality of a terrorist attack
- The PLA or, of course, People’s Liberation Army which also has responsibilities which pertain to law enforcement
It is also worth pointing out that due to their special status, Macau and Hong Kong have their own law enforcement agencies but as you have most likely suspected, these agencies work (in some cases very closely) with their mainland China counterparts.
At the end of the day, the law enforcement dimension represents yet another manner in which the story of China can be told. A story involving good, bad and occasionally… yes, things to get ugly. What interests us here at ChinaFund.com is what lessons there are to be learned for investors and all things considered, law enforcement represents one of the metrics that go beyond the usual suspects (GDP, GDP growth rate, inflation and so on) and help us understand at which stage of development China currently is and how much work it still has ahead of itself.
Think of it as yet another piece of the “understanding China” puzzle. Or, if you will, an opportunity for hard-working investors who believe in doing more than just the bare minimum to dig deeper and try to look at China under the hood. The ChinaFund.com team specializes in just that. As an entity which has been doing business in China for over a decade, we have proverbially been there and done that. Our expertise is at the disposal of interested parties and we can be reached through the Consulting and Contact sections of ChinaFund.com.