Salmon smuggling update: China cracking down on triad crime

Figures for early April 2018 show salmon prices have spiking in China, up by over 50 percent year-on-year. Prices ranged from CNY 110 (USD 17.4, EUR 14.1) to CNY 113 (USD 17.9, EUR 14.5) per kilo for large size (six to seven kilograms) of whole Chilean and Norwegian salmon at the Jingshen market in Beijing this weekend, as buyers sought to capitalize on lower supply following a crackdown on rampant smuggling from Vietnam. 

Similar prices were reported in Shanghai and Guangzhou. Last summer, comparable wholesale prices for salmon averaged CNY 70/kg (USD 11/kg, EUR 9/kg). 

The squeeze could, ironically, drive a new wave of smuggling to meet continued demand for salmon. Reports suggest an increase in smuggling in small amounts by pedestrians crossing the border between mainland China and Hong Kong – a route long favored by walk-over smugglers getting contraband U.S. beef through Hong Kong, duty-free, in their suitcases. 

China’s salmon smugglers appear to have been collateral damage in a continued crackdown on politically connected triad gangs and an increased vigilance on illegal imports of waste after China banned such imports by its giant waste recycling industry from January 2018. 

Several import-export companies operating in China surveyed for this article reported that China’s keenness to reduce pollution by enforcing its environmental rules – including an end to waste recycling – has resulted in more vigilance on all types of imports by customs.  

“There are less places to hide,” according to one European executive sourcing from China and Vietnam for European buyers. China prosecuted 286 cases in 2017 of waste smuggling.

The clamp down on triad-type gang crime and ramp up in environmental enforcement efforts appears to have hauled in other forms of smuggling. But there are other factors at play, including a wave of demolitions of wet markets and wholesale markets across Chinese cities over the past year – seen by many as a means of regularizing retail channels and increasing sales tax collection. 

Chinese authorities claim the latest smuggling crackdown involved USD 100 million (CNY 630 million, EUR 81 million) worth of salmon. This is likely accurate given the scale of tax evasion uncovered elsewhere. China Customs Administration claims to have prosecuted USD 242.1 million (CNY 1.5 billion, EUR 196 million) in evasion of duties on rice imports in the first 11 months of 2017. 

Many of Chinese ports are not open to overseas traffic, but contraband is being brought into port on vessels marked as domestic, rather than international transport vessels. Sugar, oil, and grain have also been smuggled in bulk, with authorities seizing tons of refined oil in recent years. A single batch of contraband imported wine seized by authorities in 2017 was valued at USD 34 million (CNY 214 million, EUR 27. 5 million).  

Photo courtesy of CCTV