Child Laundering in China

by Anthony Ho (impact consultant for Sports Philosophy)

Child trafficking is a phenomenon in China. It is a taboo topic for the Chinese government, which is tackling the problem but doesn’t publicize statistics on the number of abducted children. As a result, it is hard to determine the scale of the problem. However, with the frequency of kidnappings and reports of sophisticated trafficking methods, it clearly reflects a national problem that has dramatic global implications.

An industry has sprung up around child trafficking with stories involving the police, doctors and nurses. The driving force is a shady market for birth certificates. Once a child is kidnapped, a broker is able to bribe hospital staff to create a birth certificate in the hospital’s computer system, which will give the child another identity so someone else can legitimately claim it as their own. These birth certificates are not counterfeits; they are obtained in the same way as regular birth certificates but involve hefty bribes.

“After I get you the birth certificate, you can check with the hospital. And if you can access the medical record, you know the certificate is real,” said Zhao Dapeng, a broker in the child abduction industry. In an interview with Beijing News, Zhao said that he charged 100,000 yuan (around £12,000) for a certificate, which he could get in two weeks through either hospitals or state-run maternity clinics. “No matter how good the hospital is, there are doctors there who want to make more money. Their salary is only about 3,000 to 4,000 yuan (£350 to £470) per month.”

It is remarkably common that children go missing, with an estimate of tens of thousands abducted or abandoned every year across the country. The problem is complicated and hard to control, and in order to understand it we have to understand the impact of China’s three-decade-old one-child policy, which was only recently phased out in 2015.

People in urban areas are given privileges such as improved housing, education and health care and increased salary by keeping to a one-child per family pledge. In rural areas, the policy has been less successful as agriculture is still dependent on labour and large families are the cultural norm. Although the enforcement of the policy differs greatly across the country, the usual penalties for having another child include the removal of privileges, demotion or loss of jobs. In some areas there have been stories of forced abortions, sterilizations, confiscation of property and imprisonment.

The one-child policy has been successful in preventing around 400 million births in an effort to control the country’s exploding population growth. But the policy has had severe consequences such as child abandonment, female infanticide and an increasing gender imbalance because traditional attitudes are a part of the problem, too.

At the forefront is traditional preference for sons (who commonly stay and support parents through old age) over daughters (who are usually married off into other families and are not a source of support). As a result, couples are often under pressure to produce sons. For poorer families or migrants, a lack of civic rights or financial security often means many abandon their babies or sell them through illegal adoption brokers. Abandoned children tend to be second daughters and the disabled.

Large numbers of abandoned baby girls have received worldwide media attention and significant interest from foreign adoptive parents. Over the course of two decades, around 120,000 girls have been adopted overseas particularly to the United States.  China remains the number one source of adoptive children.

In 2007, China instituted stringent rules on foreign adoption, as there were fewer abandoned children because the one-child policy had eased, more couples could afford fines and birth control was more reliable.

As there is still interest in foreign adoption, there is a lot of money that can be made for those who deliver orphans quickly. Given the country’s rapid economic development with young adults flocking to growing cities, kidnappers have an opportunity to steal toddlers who play unsupervised in half-abandoned villages or city slums. Kidnapped children are typically drugged and passed onto passengers of long-distance buses and then handed off again at other stations, making it near impossible to rescue them. Newly created birth certificates will mask the origins of abducted children, effectively laundering them for adoption.

Because foreign adoptive parents have to give at least a $5,000 (34,000 yuan) donation to orphanages and because traffickers sell children for less than that, buying trafficked children is a profitable enterprise for orphanages if it places them quickly. One mother, who adopted a girl out of a group of 12 other infants, said that her daughter could clearly describe her first 11 months in the orphanage. It was only later that she found out that the other 11 children could recite the exact same information given by her daughter.

Kidnapping and trafficking has become widespread enough that the country has a national anti-kidnapping taskforce, which carries out high-profile raids and rescues hundreds, sometimes thousands, of kidnapped children every year. However, without hard data on how many children are kidnapped each year, it’s hard to say how many cases are solved.

The Chinese government has made a significant change by allowing families to have two children instead of one. Besides easing future labour shortages, a two-child policy will reduce the pressure on families desperate to have a son and help stem child trafficking. On the other hand, there are concerns that the two-child policy could reduce the number of babies available for adoption, which would create a stronger incentive to steal children to meet both domestic and international demand.

Although China has a reputation of running a tightly controlled adoption system, there is a worrying lack of transparency and accountability in how orphanages and charities use funds and donations. Is money being used for improving the welfare of children or is it being used for illegal activities and personal profit?  Only time will tell if the newly implemented two-child policy will have the intended benefits to curb child trafficking, or if trafficking methods will adapt in this new environment.