China’s local police seizing assets, demanding payments amid economic downturn

Zhang Ke is not using his real name because he has been hiding from police in the southern megalopolis of Guangzhou since September. Zhang said he did not commit a crime, but he has been dodging the authorities to avoid financial extortion by police from another city that is more than 1,400 kilometers away in northern China.
In July, Zhang said his life was turned upside down when all of his bank accounts were frozen by the Nanle County Public Security Bureau in Henan province.
Using a pseudonym for personal security concerns, Zhang told VOA Mandarin that police demanded $55,000 — nearly all the money he has earned from his sports lottery distributor business — in exchange for having the freeze lifted.
According to Zhang and other posts on China’s social media, he is not the only one targeted and fleeced by police.
As China’s economy struggles and economic pressures constrain local government budgets, law enforcement officers have been using flexible legal codes and financial punishments to fill government coffers, analysts say.
Reports circulating on Chinese social media detailed nearly 10,000 incidents in which companies in Guangzhou province alone had their assets frozen or removed from bank accounts by police. Zhang Ke’s business is one of them.
Two years ago, Zhang began selling services to clients on social media. Buyers would pay him to gamble on their behalf instead of going to stores in person. If the tickets won, he would wire them the money.
Chinese law regulates the sale of physical lottery tickets, but Zhang’s business exists in a legal gray area. Chinese law forbids the sale of sports lottery tickets online. Zhang’s company does not distribute physical tickets to his customers.
However, law enforcement has subjectively interpreted the law to target Zhang and his company. The lack of clarity and standards for interpretation, Zhang says, provides these cross-provincial police officers an opportunity to “incriminate tens of thousands of store owners” like himself as a means of profit generation.
Internet users have begun using the catchphrase “offshore fishing” to describe the extralegal police practice of arresting, freezing, or transferring the assets of private enterprises and individuals in another province.
Zhang said he has met many other lottery distributors who were also subjected to undue financial punishments.
“The police asked them for money and the money was then transferred to the policemen’s personal accounts, not to the public security bureau’s corporate accounts,” he said.
Teng Biao, a visiting professor at Hunter College, told VOA that “offshore fishing” does not properly enforce laws across provinces but rather generates revenue for police and local governments.
“A lot of private enterprises, including many small business owners, are facing an extremely bad legal and political environment. There are so many gray areas in China’s legal system that it’s almost impossible for businesses to fully align with the law. Combined with China’s imperfect and distorted market system, it is very easy for the police to find an excuse to crack down on the entrepreneurs,” he said.

Teng attributed the prevalence of “offshore fishing” to China’s economic downturn.
“The local governments used to rely on selling land for financial resources. But the economic downturn and crippled property market stripped them of that option. That provides an incentive for frequent cross-provincial law enforcement, the so-called ‘offshore fishing,’” he said.
Many lottery sellers including himself have been forced to pay money to avoid jail time, Zhang told VOA.
“If you don’t give the police money, you’re going to be locked up. Some lottery sellers pay the fine on the same day they are questioned, and get released right away, and never hear from the police again. If you don’t do what they say, you’re locked up until you give in,” he said.
Last month, the director of the National Development and Reform Commission responsible for planning China’s economy, Zheng Shajie, talked about the issue of “offshore fishing” at a press conference and called for the standardization of law enforcement.
“Law enforcement must not cross regional boundaries in violation of regulations, nor should it be conducted for profit,” he said.
Local police departments have also taken steps to address the issue. Jiubao police station in the eastern city of Hangzhou, a business hub for many of China’s e-commerce merchants, issued a public notice in August, saying: “non-local police are forbidden to enforce laws in Jiubao unless they’re accompanied by local police. Film and call the local police if you find them illegally entering your property.”
Zhang said he called all the anti-corruption hotlines but never received a reply.
“I have no other choice. I have tried everything. I probably will give up the fight in the end. Now I know what it feels like to have no freedom, and I finally understand why all those wealthy Chinese businessmen move to other countries,” he said.
“I don’t want to live in China anymore. I want to learn English and go to work abroad, and even if I drive a taxi for the rest of my life, I will take it. I don’t want to live in this land of China anymore; it’s disgusting,” Zhang told VOA.
VOA tried to reach Puyang Public Security Bureau authorities in Henan Province by phone, but the calls went unanswered.
Katherine Michaelson and Adrianna Zhang contributed to this report.