In 1999, the police officials in China’s eastern province of Jiangsu have invented a totally new and profitable approach to improve their financial standing. The scheme was simple and efficient, and it did not require significant investments. The plan has been executed by opening a secret brothel, than busting it, arrested the customers, and “fining” them.
With seed money of just 6,000 Yuan ($725), Lishui County police substation deputy chief Gao Mingliang set up operations in a brothel disguised as a restaurant. Specially hired professional prostitutes would entice their customers into the back rooms. After a while, the police would raid the rooms, arrest the customers, haul them down to the police substation and fine them.
The interesting detail is that depending on how much money the police station pulled in, policemen would even issue a performance bonus to the girls.
Between May and August 1999, the bureau racked up more than 80,000 Yuan through the scheme from multiple brothel customers. The Lishui County police plan unraveled when a neighboring police substation arrested the man listed as owning the restaurant and sentenced him to a year in a labor camp for running a brothel. Upset after a year of hard labor, the man sent a petition to high level officials who uncovered Gao's scam. As Gao later confessed, in September a Nanjing District Court sentenced him to one year in prison for abusing his authority.
Prostitution is illegal in China under the Security Administrative Punishments Law of 2006, but is relegated to the status of a misdemeanor unless the participants knowingly have a “serious venereal disease,” or physical violence, injury, or a minor child under the age of 14 is involved. It is technically punishable with a warning, a fine up to 5,000 Yuan, a signature on a "statement of repentance," "re-education through labor," or 15 days in prison. (Article 30 of the Regulations of the PRC on Administrative Penalties for Public Security, 1986).
Due to the illegal status of the prostitution in China, and multiple efforts to prosecute the sex workers, China fails to comply with requirements of the UN Convention of the Elimination of All Forms of Discrimination Against Women (CEDAW) which calls for widespread legalization of prostitution.
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