In Depth: How China is Cracking Down on Border Trade Smugglers

Regulations that offer border residents a duty-free income are coming under greater scrutiny amid growing abuse

A store next to a customs station in Hekou county in Southwest China’s Yunnan province sells snacks, slippers, bead strings and other goods imported from Vietnam on Nov. 3. Photo: Feng Yiming/Caixin

“We are doing what the local government has encouraged, so why have we been accused of smuggling?” Zou Ye asked, still deeply puzzled to this day.

Zou’s husband, the owner of a logistics firm at the Menglian Port in southwestern province of Yunnan, was arrested together with four colleagues in September 2023 for allegedly smuggling goods under false trade declarations, a gray area that is coming under greater scrutiny with lengthy prison sentences for offenders.

His company invested 15 million yuan ($2.1 million) in 2018 to build a border trade market at the Mangxin cross-border corridor between China and Myanmar. Border trade allows local residents to conduct duty-free import and export transactions. Under regulations set up in 1996 and revised in 2010, residents can import and export goods worth up to 8,000 yuan a day tax-free.