Hong Kong Triads' New Frontier
South China is fertile ground for crime gangs, corruption

Frank Viviano, Chronicle Staff Writer

Huizhou, China
The vertical skyline of Huizhou rises abruptly over the East
River 90 miles east of Guang zhou, a highrise exclamation
point in the rural hinterland of Guangdong province.
It is a landmark on what Chinese call the ``Hei Dao'' ``the Black Road.''

Huizhou is the Palermo of China, widely regarded as its de
facto capital of organized crime, in a nation increasingly
beset by lawlessness.

Hong Kong dollars seeded the unlikely crop of luxury hotels
and skyscrapers that took root in the 1990s. The tastes and
fashions of the triads, Hong Kong's underworld syndicates,
color its gaudy lifestyle.

``There has been a decided surge in crimes across the border
thefts of all sorts, a proliferation of brothels,
kidnappings of businesspeople with their roots in the
materialistic values that we ourselves exported to China,''
conceded a top Hong Kong government official, speaking off
the record.

Thirteen years ago, when London and Bei jing signed their
agreement returning Hong Kong to Chinese control on July 1,
1997, the fear was that the colony's criminal syndicates
would relocate to Europe or the United States.

Instead, the syndicates moved into southern China, where the
puritanical communism of Mao Zedong has yielded to a love
affair with cold cash that often appears to know no limits.

To visit Huizhou, a former resort town for Communist Party
cadres that has ballooned into a roaring city of 400,000, is
to see that the effects of that love affair legal and
otherwise are in full uninhibited swing.

On a rainy Thursday morning, a crowd mills at the door of a
stock brokerage one mile south of the city center, oblivious
to the weather. Their eyes are glued to six giant screens
monitoring the stock markets of Shanghai and the city of
Shenzhen, on the Hong Kong border. Almost everyone carries
the latest issue of Securities Times, a Chinese market tip
sheet.

As share prices fluctuate, knots of men and women shove
their way into the brokerage to buy or sell. ``There's no
need for a job anymore,'' one of them tells a reporter, who
asks what he does for a living. ``Why work when you can
invest?''

Two fistfights break out between stockholders while the
interview is under way. None of the other investors pays the
slightest attention.

Back in the city center, teenagers loiter in four separate
outlets for Giordano, an upscale Hong Kong clothing chain
founded by publishing magnate Jimmy Lai, a bitter critic of
the Chinese Communist Party. Since 1989, when he publicly
supported the prodemocracy demonstrators whose movement was
crushed at Tiananmen Square, Beijing hardliners have done
all they could to drive Lai out of business, picturing him
as a chief source of Hong Kongbred ``foreign values''
infecting China.

But Huizhou and other Guangdong province cities do not care
what party puritans think about Jimmy Lai or about the
automated teller machines dispensing cash on every downtown
corner, or the billboards that scream temptation at China's
new moneyed class.

One billboard advertises trips to San Francisco and the
casinos of Reno, Nev., payable only in U.S. dollars. Another
offers luxury townhouses in a new Huizhou subdivision named
Prosperity Gardens.

The genuinely criminal is no less conspicuous in Huizhou
than the merely brash. Indeed, it is flaunted.

Stolen Hong Kong taxis, limousines and sports cars even a
turquoise Ferrari worth roughly two centuries of the current
per capita income in China cruise the streets, with
Guangdong province license plates affixed over paint
splattered bumpers.

``You know they're stolen because the paint is new and the
steering wheel is on the wrong side,'' explains a Korean
salesman who travels frequently to Huizhou.

Hong Kong drives on the left side of the road,
Britishstyle. China drives on the right, and by law,
Chinese cars are supposed to be equipped with leftside
steering wheels.

Thousands of expensive cars have vanished from Hong Kong
streets and parking lots in the past few years, including a
significant number of righthanddrive Mercedes sedans now
in the fleets of Guangdong province officials, according to
a Hong Kong police source.

Parking lots in Hong Kong, the source adds, are often
controlled by the Sun Yee On ``New Discipline and Peace''
a triad with 56,000 members that presides over an empire
driven by narcotics, money laundering, illegal gambling and
prostitution on both sides of the border.

In one hamlet southwest of Huizhou, there are now so many
triadcontrolled prostitutes serving Hong Kong tycoons
above board and underworld alike that locals refer to it
as Mistress Village.

Among the most conspicuous of the new hotels in Huizhou is a
garish pink complex set on a lake, featuring an Italian
marble lobby and a ``sauna house'' equipped with tile
Jacuzzis, polished gold railings and masseuses. It is owned
by a Hong Kong restaurant chain whose private banquet halls
serve as unofficial boardrooms to the Sun Yee On.

Worried Chinese authorities believe there may be as many as
150,000 criminal gangs, either locally spawned or connected
to large syndicates in Hong Kong and Taiwan, now operating
in the People's Republic of China.

Yet in 1993, China's minister of public security, Tao Siju
the nation's chief law enforcement officer personally
welcomed a contingent of Sun Yee On leaders to Beijing.

``The members of triads are not always gangsters,'' he said.
``As long as they are patriots, concerned with maintaining
the prosperity of Hong Kong, we should respect them.''


There is no evidence that Tao or the owners of the pink
hotel are on the New Discipline and Peace payroll. But their
willingness to work with its leaders, people in Huizhou say,
illustrates a phenomenon referred to as ``gua gou,'' which
translates as ``interlocking mechanisms.''

``The parties in a gua gou relationship are not formally
partners,'' explains Qiu Xunu, a business consultant. ``But
they acknowledge that they have common interests and
sometimes act accordingly.''

The problem, she adds, ``is that the collusion between the
forces of order and the underworld can quickly spin out of
control.''

That danger is especially acute in southern China, says the
Hong Kongbased director of an Asian research institution,
who asked that his name not be used.

``There's a powerful emphasis (in the south) on material
wellbeing, on expensive clothes and money in your pocket
a certain license to drink, womanize and demonstrate
contempt for the law. It's not a very edifying picture,'' he
said.

The Chinese government has belatedly recognized that
``common interests'' can fade into full scale corruption,
and it has taken harsh steps to discourage the rising tide
of criminality.

Last year, according to Amnesty International, a
worldleading 3,500 criminal executions were carried out in
China, as part of an all out war on crime dubbed Operation
Strike Hard.

Among those executed was a former mayor of Huizhou. After a
highly publicized antinarcotics speech in March by Public
Security Minister Tao Siju the same man who welcomed the
Sun Yee On dons, Hong Kong's chief narcotics lords, to
Beijing drug dealers in Guangdong province were given
until June 26 to surrender to the police.

A spokesman for China's National Committee on Narcotics
Control made the link with gua gou collaboration between
officials and criminals explicit.

``It was discovered that some grassrootslevel authorities
have privately given the green light to drug growers, which
has stimulated the spread of drug production and use,'' he
told the Xinhua News Agency in late April.

The campaign against official malfeasance has since been
extended to ``gray corruption,'' the term for noncriminal
abuses of privilege by the governing elite.

Some party cadres ``believe that power is a magic wand,''
the People's Daily recently editorialized. ``They are
enthusiastic about wining, dining, amusement and
ribboncutting ceremonies, forgetting their work and the
sufferings of the people.''

But judging from the situation in Guangdong, the intended
message a warning against the plague of extravagant
excess that President Jiang Zemin calls ``spiritual
pollution'' has had little effect.

Four weeks ago, deep into the campaign against gray
corruption, the manager of a Hong Kong owned machinery
plant near Huizhou reported that he received an unusual
request from local authorities. The tax shelter he sought
would be approved, they said, on condition that a special
celebratory banquet be held.

The banquet, which set the plant manager back $2,500 for 10
officials, was an endangered species dinner featuring eagle,
armadillo and bear.

Since mid1996, three surveys by pollsters at the Baptist
University of Hong Kong have found that spiraling official
corruption is now the territory's No. 1 worry about the
consequences of Chinese rule.

Even before the handover to Beijing, certain districts of
Hong Kong are already flooded with young streetwalkers from
Sichuan, Jiangxi and Hunan provinces. Carried south on waves
of rural emigrants seeking work in Huizhou and other booming
Guangdong cities, they are recruited in China by agents of
Sun Yee On and other triads.

Triad ``snakeheads'' the Chinese version of the
``coyotes'' who run undocumented immigrants into the United
States smuggle them across the Hong Kong border.

It could not be done, most observers argue, without the
tacit collaboration of People's Liberation Army officers who
command the border posts. In short, without gua gou.


© The Chronicle Publishing Company

©1997 San Francisco Chronicle