By Zhu Zhe (China Daily)
Updated: 2007-09-12 07:20

The Chinese economy is booming, but so is smuggling. Xia Shouda, deputy director of the anti-smuggling bureau of the General Administration of Customs talks to Zhu Zhe about the situation.

Q: What is the general situation of smuggling in the country?

A: Although our efforts to fight smuggling have borne some results, the overall situation is still grave. In some places, the situation is very serious.

In the past few years, Customs officers across the country have uncovered an average of 10,000 smuggling cases a year. The contraband seized was worth 7 to 9 billion yuan ($903 million to 1.2 billion) a year, which means a tax loss of about 1.5 billion yuan ($197 million).

Last year, 7,240 cases, involving goods worth about 13.7 billion yuan ($1.8 billion), were detected. The tax loss was up to 3.26 billion yuan ($430 million). Compared with the previous two years, the number of smuggling cases in 2006 went down but the money involved shot up.

Q: What are the methods adopted by smugglers?

A: Price fraud, smuggling in processing trade and taking advantage of the favorable tax policies are the three major types of smuggling. We've found a growing number of trading firms are engaged in price frauds. Last year, up to 125 trading firms were involved in such cases, up 71 percent over 2005.

We also found widespread smuggling in the sale of pianos, cotton, metal scraps, frozen seafood and cow and buffalo leather. Last year, a special crackdown was launched on cotton smugglers and 1 billion yuan ($132 million) worth of consignment seized.

Among those involved were large State-owned enterprises and textile material purchasing firms.

Poor management, loopholes in policies and poor self-esteem of firms all help spread smuggling.

Q: What are the other high-risk products?

A: Cigarettes, automobiles and raw materials. Last year, Customs officers across the country seized 2.11 billion yuan ($278 million) worth of cigarettes, 6.3 times the value of 2005. Copper seized was worth 3 billion yuan ($395 million), 115 times more than the previous year. But smuggling of plastic products, timber, steel and industrial chemicals fell sharply last year. We found only 110 million yuan ($14.5 million) worth of smuggled steel, down 81.2 percent over the previous year.

Q: The number of smuggling cases uncovered fell last year. But the value of contraband went up. Why?

A: That's because more big cases were uncovered last year. Usually well-organized gangs are behind some mass smuggling cases.

Nineteen serious cases were detected last year, with each involving products worth at least 100 million yuan ($13 million).

In 2005, there were only 13 such cases. The amount involved in last year's 19 cases was 9.35 billion yuan ($1.23 billion), or 68 percent of the total amount involved in all uncovered cases.

Coastal areas are the worst affected. Eight of last year's 19 big cases were uncovered by the Customs in South China's Guangdong Province; the rest were detected in eight coastal cities and provinces, including Shanghai, Qingdao, Tianjin, Hainan and Fujian, and Beijing. But in 2005, serious cases were reported from only six coastal cities and provinces.

Q: The Ministry of Public Security says drug trafficking, too, is a threat. What do your figures suggest?

A: Drug smuggling is evident on almost all fronts. Last year, Customs officers seized 798 kg of drugs in 330 smuggling cases, up 61 percent and 86 percent.

The drugs seized included 205 kg of heroin, 200 kg of ice and 158 kg of cocaine.

The rest were mainly Ketamine, opium and marijuana. We also seized 58.8 tons of precursor chemicals, 10 times more than in 2005.

Q: The number of drug trafficking cases has risen sharply. Where do the drugs come from?

A: Drug trafficking was reported from only 14 Customs jurisdictions in 2005. But last year, 26 of the country's 41 Customs jurisdictions uncovered such cases. More cases involving "human mules" - people who swallow heroin and other drugs in condoms or small plastic bags to smuggle - have come to light. The number of "human mule" cases uncovered last year was 18 times more than in 2005.

It's more likely for drugs to be smuggled in from Africa, Central Asia and West Asia nowadays than from the Golden Triangle in Southeast Asia. Last year, drugs were smuggled in from 28 countries and regions across the world. Also, more foreigners are engaged in drug trafficking today, with 234 foreigners being arrested last year, 75 percent more than in 2005.

Q: Do you face any obstacles in law enforcement?

A: Violence, from time to time. We have already encountered at least 10 cases this year in which traffickers turned violent to defy laws and regulations. Most of the cases were reported from the southeastern coastal regions.

Q: It seems the situation is really serious. How can it be improved?

A: We've just set up an inter-ministerial coordination mechanism to better tackle smuggling. It's a major step taken by the State Council (the country's cabinet). Its first meeting was held at the end of July in the General Administration of Customs, and was attended by officials of 31 ministerial-level departments. The departments include the National Development and Reform Commission, the Ministry of Public Security, the General Administration of Customs, the Ministry of Finance, the Ministry of Railways, the Ministry of Commerce, the People's Bank of China (the central bank), the State Administration of Taxation and the judicial organs and military officials.

We set up the mechanism to intensify coordination among different departments (because) only joint efforts can bring success in the battle against smuggling.

Q: How does the mechanism work?

A: The General Administration of Customs is the leading force. But the 31 departments will jointly work out major anti-smuggling policies, submit suggestions to the State Council and supervise the local authorities.

In principle, the inter-ministerial meeting is held once every year. But meetings can be held occasionally, with part of or all the members attending if necessary. The discussions have to be recorded literally and submitted to the State Council and handed down to the local authorities.