As Profit-Driven, Cross-Regional Law Enforcement Grows, Scholars Suggest Fines Be Turned Over to Central Government

By Huang Yuxin, Ma Xueying and Kelly Wang

00:00

00:00/00:00

Listen to this article 1x

Some local governments have turned law enforcement into a profit-making enterprise to pad their cash-strapped budgets, an endeavor that legal scholars say purposely circumvents central government policy designed to protect the private sector. Photo: VCG

Some cash-strapped local governments in China are taking advantage of expanding jurisdictional reach to target lucrative cases involving private businesses from other regions, in an effort to find alternative ways to replenish government coffers.

This emerging trend in the last several years is known as “distant-water fishing” among China’s legal circle, though the term is originally used to describe activities conducted by fishing vessels far from their home country’s territorial waters. It represents a significant threat to the private sector and could lead to “irrational competition” among localities, warned legal experts at a seminar hosted by Hongfan Legal and Economic Studies (HLES) earlier this month in Beijing.