“Distant-Water Fishing” , Robbery Law Enforcement
Guangzhou Enterprises Plagued by Robbery Law Enforcement from Other Regions: Nearly 10,000 Companies Forced to Pay for Release.
By Trends Observed
【Editor’s Note： Guangdong’s private sector is increasingly pressured by aggressive, profit-driven law enforcement from other provinces. This “distant-water fishing” (远洋捕捞) targets enterprises like Pupu and Yi Health, allegedly as a means for cash-strapped local governments to boost revenues. Nearly 10,000 Guangzhou businesses alone report suffering from these tactics, which often involve sudden arrests, asset seizures, and inflated fines. Guangdong’s internal reports reveal that areas like Shenzhen, Guangzhou, and Dongguan have seen a spike in such cases, prompting the province to enact protective measures for its companies. Critics argue that some cases involve questionable legal jurisdiction and even fabricated charges. Economists warn that unchecked practices threaten economic stability, potentially undermining central efforts to revitalize the private sector. As financial strains intensify, local authorities appear to increasingly pursue “big fish,” prompting entrepreneurs to consider relocation or closure amidst mounting disruptions.】
Guangdong Suffers from Cross-Regional Enforcement, Overwhelmed by the Onslaught. On October 16, media outlets disclosed that the Guangdong Provincial Situation Investigation and Research Center released the Guangdong Provincial Situation Internal Reference this April. One of its subheadings reads: “Internet Industry Companies in Guangdong Suffering from Cross-Regional Profit-Seeking Enforcement, Making Survival Unsustainable.”
Due to a recent sharp decline in land revenues, local governments across various regions face financial strains. Some have crossed ethical lines, leading to a phenomenon where “robbing” private enterprises from other regions has gradually become the norm. Guangdong's internal report refers to this as “cross-regional profit-seeking enforcement,” while central media directly liken it to “distant-water fishing” (远洋捕捞). Reportedly, nearly 10,000 enterprises in Guangzhou alone have been affected.
The article points out that in recent years, cities like Shenzhen, Guangzhou, and Dongguan in the Pearl River Delta have become high-incidence areas for such enforcement. Since 2023, nearly 10,000 enterprises in Guangzhou alone—including Pupu (朴朴) and Yi Health (壹健康)—have encountered cross-regional enforcement. Most are private enterprises, and most cases clearly carry profit-seeking motives.
Overwhelmed by these disruptions, Guangdong Province has had to introduce measures to protect local enterprises' legitimate rights and reduce unnecessary interference.
At a “Profit-Seeking Enforcement” seminar held in Beijing on October 14, several experts highlighted cases where certain localities forcibly seized the assets of out-of-town enterprises.
For instance, in a county in Henan Province, a “collector” entrusted his “collection” to a Shenzhen auction company for appraisal. After paying a 5,000-yuan appraisal fee, he chose to report to the police. Consequently, local authorities filed a “fraud” case, arrested 47 employees of the auction company across provinces, and the court subsequently imposed huge fines and seized assets worth tens of millions.
In a county in the northern frontier, prompted by a report, authorities detained the management and employees of a Guangdong company producing health products. The amount involved reportedly reached hundreds of millions of yuan.
The Public Security Bureau of a county in Chongqing, responding to a local consumer's complaint about the ineffectiveness of a “Yao Bath Bag” (瑶浴包), filed a “fraud” case. They dispatched over 300 officers to Hangzhou, Zhejiang Province, dismantled the company selling the product, and arrested 155 people, with the amount involved reaching 200 million yuan. It is understood that the case had issues such as arbitrarily lowering the standards for filing, lacking procedures for cross-regional law enforcement, and creating interrogation records using templates with standard answers. The procuratorate has withdrawn the interrogation records of over 100 suspects.
In these cases, law enforcement agencies handled matters across provinces with tenuous jurisdictional links, sometimes artificially established through “professional victims” to justify their actions. These cases often involve crimes punishable by fines, originating from the term “distant-water fishing.” Beyond “sting operations,” some places even directly engage in “fabricating charges.”
Some netizens have revealed instances where external police transferred funds into a wealthy individual's account, then immediately froze the account and arrested the person. Friends of theirs have also experienced such “cross-regional case handling.” Others have been victims of baseless accusations, forcing entrepreneurs to “pay money for release.”
Comments from netizens include: “They are professionals at targeting big fish.”
Another noted: “Jiaozuo's cross-provincial enforcement against Yi Health led to billions in funds being frozen over a case involving just a thousand yuan.” “This is just the beginning; the worse the economy gets, the more crackdowns there will be, forcing them to relocate or close down.”
Reports indicate that “distant-water fishing” takes various forms, including freezing and transferring assets. Some localities and departments set confiscation quotas, leading law enforcement personnel to over-enforce to meet targets. Additionally, abuse of power during enforcement—such as arbitrary fines and seizures—threatens the survival of enterprises.
On September 25, economists called for “halting local governments from investigating private entrepreneurs and extorting money for release to bolster local fiscal revenue,” warning that it could “spread and cause a national economic disaster.”
Previously, the cross-regional actions of some localities against out-of-town private enterprises attracted public attention. Central media reported on this phenomenon, referring to it as “distant-water fishing.”
Economists worry that if such practices continue unchecked, “if the backbone private enterprises across the country collapse, cease operations, or relocate, then no matter how many policies the National Development and Reform Commission introduces to promote private enterprise development, how much deficit the Ministry of Finance incurs, how much currency the People's Bank of China releases, or how much interest rates are lowered, it will have little effect on reviving the national economy.”
“Local authorities target the 'fat meat'; those in their sights are generally key local enterprises. Once entrepreneurs are investigated, their companies' stock prices fall, orders decrease, suppliers hesitate to supply, and management and staff become unstable—leading to gradual decline, closure, or relocation, and forcing employees to return home...”