In recent years, the competition between "involution" and "involution" has become a hot word on the Internet, which has attracted widespread attention, especially in the economic field. Then, how to treat the problem of involution, what is its influence, what are its manifestations, what are its causes and how to solve it? In this regard, we inviteProfessor Liu Zhibiao, Executive Dean of Changjiang Industrial Economic Research Institute of Nanjing University.,Professor Mao Zhenhua, Co-Director of Economic Research Institute of Renmin University of China.Answer.

　　What is the impact of "involution"

　　Moderator:On July 30th, 2024, the Political Bureau of the Communist Party of China (CPC) Central Committee Conference pointed out that it is necessary to strengthen industry self-discipline and prevent "involution" vicious competition. The Central Committee of the Communist Party of China attaches great importance to preventing "involution". Then, what impact does "involution" have on the economy?

　　Liu Zhibiao:At present, the problem of "involution" has aroused widespread concern at home and abroad, which has substantially affected the situation and direction of China’s economic operation and development. There are two completely different views on this. One view is that market competition is "involution" to a certain extent. As some scholars have pointed out, Japanese enterprises are "decisive at home and decisive abroad" and gain international competitiveness through domestic market competition. Another point of view is that China’s "involution" competition leads to more and more sales and lower prices, so it is a reason for the current economic contraction. If the latter is established, the problem will become quite serious, instead of being an ordinary market competition phenomenon.

　　Mao Zhenhua:At present, the "involution" competition of enterprises in China has caused a certain impact at home and abroad. In China, the "involution" competition leads to the decline of commodity prices, which leads to the decline of corporate profits, which in turn leads to the decline of residents’ wage income and consumption power. In addition, with the further intensification of "involution" competition, the market may gradually take price as the sole criterion to measure products, which may lead to the phenomenon of "cutting corners and counterfeiting" that once existed in the era of backward technology and cruel competition in the past. In foreign countries, the "involution" of China enterprises has caused some negative public opinions.

　　The main manifestations of "involution"

　　Moderator:Whether it is "involution" or "involution" competition, what are its manifestations in the economic field?

　　Liu Zhibiao:The problem of involution can be analyzed from three levels: micro, meso and macro. At the micro level, it involves the choice of enterprise strategy and behavior, such as occupying the market at a low price; At the meso level, we need to pay attention to the relationship between enterprises within the industry, such as the relationship between entry and exit and the degree of competition; At the macro level, it is necessary to grasp the macro situation and trend from the perspective of the balance between total supply and total demand. Here, I focus on the discussion from the perspective of the middle industry.

　　First, from the perspective of industry balance, when the production capacity or supply capacity of an industry significantly exceeds the expansion speed of its market capacity, it will lead to the shrinking market share of each enterprise. Because the growth of market capacity can’t keep up with the expansion of production capacity, it is easy to trigger a price war. This situation is particularly obvious in China’s new energy automobile industry. The increase of inventory pressure and oversupply have directly led to the outbreak of price war, which has become an important factor for the automobile industry to reflect on low profit rate or even loss.

　　The second is to understand from the income of input factors. The "involution" mainly shows that the marginal income of factor input decreases until the marginal income drops to zero or becomes negative. At this time, enterprises continue to invest because vicious competition poses a threat to survival, and whoever does not continue to invest will die first. In the past, in order to attract large projects, local governments competed to provide preferential conditions, such as "three exemptions and two reductions" and "five exemptions and five reductions", which eventually led to meager local income, and most of the income flowed to investors. Excessive discretionary investment behavior not only makes the benefits flow to the capital owners too much, but also breeds a large number of groups rushing to get the benefits of the project, which in turn leads to overcapacity.

　　The third is to analyze from the perspective of innovation. In the absence of innovation, technological development mainly depends on imitation and introduction, and the competition among enterprises often manifests itself as homogeneous competition, which eventually evolves into a vicious price war. Due to the lack of differentiation and pricing ability of homogeneous competitive products, enterprises can’t control market share through product characteristics, so they can’t raise prices, so they can only compete by lowering prices.

　　Fourth, from the perspective of industrial entry, when the entry threshold of an industry is too low, or although there are certain entry thresholds, competitors can easily break through these thresholds with the support of government forces, which will lead to a rapid influx of too many enterprises in the limited market capacity. Because these enterprises can’t achieve economies of scale, they can only compete by lowering prices in the end, thus triggering a vicious price war.

　　Fifth, from the perspective of industrial chain, China has a strong production capacity in the field of end products, forming many industry giants. However, these giants often transfer the fierce competition pressure between them to upstream suppliers through various methods and channels, which shows the growth of robbing suppliers. For example, the downstream chain owner enterprise delays payment to the upstream supplier, often for half a year or even more, or forces the supplier to reduce the price by 15%-20% quickly in the short term, otherwise it refuses to purchase its products. This practice is actually to enhance their competitiveness by squeezing upstream enterprises. In addition, all kinds of centralized purchasing behaviors for final products, such as centralized purchasing in the communication equipment market and centralized purchasing in the pharmaceutical market, often lead to the price being pushed down to a surprising level, which is very serious.

　　Mao Zhenhua:The main form of "involution" competition among enterprises in China is involution price, while price reduction mainly depends on cost reduction, which comes from salary reduction, layoffs and R&D reduction. Especially for industries with relatively low industrial and technical thresholds and products that are easy to copy, latecomers have more room for cost reduction. Starting from VC (venture capital, also translated as venture capital), the first-time enterprises finally formed an industrial structure after several rounds of investment, and invested a lot of costs in this process. However, the second-time enterprises do not need such a large-scale basic investment, and can directly use ready-made technologies and equipment, so their cost is lower and it is easier to achieve "involution".

　　The deep-seated reasons of "involution"

　　Moderator:When analyzing problems, we should look at the essence through phenomena. Then, what are the deep-seated or essential reasons for the "involution" in the economic field?

　　Liu Zhibiao:The phenomenon of "involution" can be analyzed from the classical three-dimensional structure of technology, market and system.

　　First, from the strategic concept of China enterprises. For a long time, some enterprises in China have relied on the concept of competition, which is a non-cooperative competition game rather than a win-win cooperation game. This concept is based on the thinking of zero-sum competition, that is, pushing competitors into trouble by means of price reduction, thus occupying a dominant position in the market. This kind of competitive thought not only exists in the domestic market, but also prevails in the international market, but it is often not welcomed by the enterprises and governments in the host country.

　　Second, from the perspective of industrial organization structure. China’s industrial organization mechanism has long been imperfect. Specifically, despite decades of competition, China’s enterprises have not yet formed the common oligopoly market structure in modern market economy. Oligopoly market structure is the micro-foundation of market economy in developed countries, in which several oligopolistic enterprises dominate the market and at the same time drive a large number of small and medium-sized enterprises to develop in the upstream and downstream of the industrial chain. This structure promotes the competition and cooperation between the main enterprises in the industrial chain and the upstream suppliers, and forms the governance mechanism, which forms the foundation of modern market economy. In the course of industrialization of about 200 years, western countries have experienced eight large-scale waves of mergers and acquisitions, which have shaped the current market structure. In contrast, China has not experienced a similar wave of mergers and acquisitions. Therefore, the imperfection of China’s industrial organization structure and the consequent "involution" phenomenon conform to the basic laws and viewpoints revealed by industrial economics to some extent.

　　Third, from the way the government participates in competition. The way the government participates in the competition leads to or aggravates the defect of industrial organization structure to a certain extent. One of the characteristics of China’s economic system transition is that the central government devolves power to local governments instead of delegating all power to enterprises. After becoming the main body of development, local governments have a variety of means to participate in market competition. Among them, providing various preferential policies is a common way of competition for local governments. In recent years, a new phenomenon is that local governments participate in competition by setting up various funds. Local governments participate in market competition by means of fund investment, which has potential risks because it may aggravate the involution competition in the market.

　　Fourth, from the perspective of institutional mechanisms. The administrative regional pattern formed since the reform and opening up has hindered the formation of a unified national market. The administrative regional pattern makes the competition mainly between the block economies. In these massive economies, the coordination mechanism is often a mixture of administrative orders and market coordination, while the external coordination mechanism mainly depends on the administrative relationship between regions. This state has hindered the free flow of factors and fair competition to some extent. The recently issued "Guidelines for National Unified Big Market Standards" aims to solve this problem and standardize the behavior of local governments. However, because the economic, administrative and judicial functions of local governments have not been completely straightened out, the guide can play a certain role, but it cannot completely solve the problem. To solve this problem fundamentally, we need to further adhere to the market-oriented reform, clarify the basic functions of the government and the market, and then establish the division of responsibilities and the relationship between the central and local governments.

　　Mao Zhenhua:From the perspective of price, I think that the formation of "involution" competition of enterprises comes from the problem of supply and demand. Long-term oversupply will lead to overcapacity and promote enterprise involution. From the demand side, the demand has shrunk in recent years, especially the lack of domestic demand and the weakening of terminal consumption. From the supply side, a long-term supply side force will form a large amount of production capacity, leading to oversupply.

　　The convergence of industrial policies of local governments will further aggravate overcapacity, which is an important reason for the "involution" competition of enterprises. In order to attract investment, local governments have launched various industrial funds, and the convergent industrial policies have further intensified the homogenization competition. Local governments promote the development of an industry at the same time, which will soon turn an industry from a "window" into a "risk exposure". We should reflect on the advantages and disadvantages of the government’s personal investment and industrial layout, whether it is shifting from advantages exceeding disadvantages to disadvantages exceeding advantages, whether it will lead to overcapacity and further promote the "involution" competition of enterprises.

　　Ways to get rid of the problem of "involution"

　　Moderator:How to overcome the negative effects of involution? How to prevent "involution" fundamentally?

　　Liu Zhibiao:First, to solve the problem fundamentally, we must strengthen the construction of enterprise autonomy and decision-making independence, and implement hard budget constraints including economic responsibility and bankruptcy. Without the hard budget constraint mechanism, enterprises will not use resources effectively, nor will they make responsible management and strategic decisions. Such enterprises cannot compete effectively in the market.

　　The second is to carry out the system reform in which local governments participate in competition. In this system, it is necessary to stimulate the enthusiasm of local governments and prevent the occurrence of unfair competition, which constitutes a pair of contradictory relations and is a highly complex worldwide problem. It may be necessary to solve it slowly from the aspects of power restriction and separation of functions according to the requirements of rule of law.

　　The third is to reconstruct the industrial organization structure of China. National policies should be devoted to promoting the formation of monopolistic competition market structure, and promote the merger, acquisition, bankruptcy and reorganization of enterprises through market competition mechanism.

　　Fourth, the national macro-level policy efforts. Here, I will focus on some suggestions for the transformation of industrial policy:

　　First, we should support the transfer of industrial policies to the front end, rather than the back-end capacity replication. In the past, industrial policies often supported the replication and expansion of production capacity. This is correct in the era of shortage economy. But now it not only intensifies market competition and overcapacity, but also promotes the phenomenon of "involution". Industrial policy should now pay more attention to front-end research and development and innovation. Although the intensification of front-end competition may lead to repeated investment of certain resources, which seems to be a waste, it is actually a necessary cost and price for technological progress. Once an enterprise obtains results through research and development and applies for a patent, other enterprises will naturally quit. Therefore, industrial policies should shift from supporting capacity expansion to supporting scientific and technological innovation, especially front-end innovation activities.

　　Second, the subsidy mode of industrial policy needs directional adjustment. Previous policies tended to subsidize producers, which easily led to overcapacity, rent-seeking and corruption. We should turn to subsidizing consumers, users and customers to expand market demand. In this way, the problem of "involution" can be effectively alleviated.

　　Third, the implementation method of industrial policy needs to be transformed. In the past, the main practice was to select losers and winners, and selectively support those enterprises that were considered competitive without competition in advance, ignoring the development needs of other enterprises. In addition to being unfair, this practice will also contribute to overcapacity. Industrial policy should support the creation of a favorable and fair competition environment for innovation, rather than simply supporting specific enterprises.

　　Fourth, the main body of industrial policy implementation should move up. It should be combined with the reform of local government functions to transform the local leading industrial policy into the central leading industrial policy. This is the basic premise of building a unified big market in China. If the industrial policy function continues to be dominated by local governments, it will be difficult to form a unified big market in China. Because the market will be divided into block structures by local government’s industrial competition means. The implementation of the central leading industrial policy does not mean returning to the planned economy, but reducing the number of industrial policies, so that the central government can concentrate resources to support several key industries instead of intervening in all industries. In most developed countries, it is usually the function of the central government to formulate industrial policies, and local governments rarely get involved. The special situation in China is that most industrial policies are dominated by local governments, which participate in market competition not for the purpose of realizing public interests, which leads to market segmentation. Therefore, some industries that are vital to the country, especially industrial policies that are suitable for developing new quality productive forces, should be uniformly implemented at the central level, which is conducive to achieving the consistency of rules, policies and coordination of actions.

　　Mao Zhenhua:How to solve the negative effects brought by the "involution" competition of China enterprises will affect the operation of international trade and the economic trend of China. The problem of "involution" competition among enterprises in China is very complicated, and it is ultimately necessary to solve the problem in economic development. Under the background that western capitalist countries have introduced policies to support enterprises’ export, China is no exception. Before new international trade advantages are formed, we should maintain our existing advantages and not simply and rudely raise product prices to eliminate "involution", which is neither reasonable nor feasible.

　　At the same time, the government should introduce policies to protect the competitive pattern of China’s export industry under the current price advantage. However, under the premise of maintaining the existing advantages, we should actively deal with new problems. In the process of governance, we should give play to the role of market mechanism, form consistent expectations from recognizing policies to behaviors, and actively deal with the negative effects brought by "involution" competition. First, we should pay attention to the chaos of low-price competition among enterprises, and introduce relevant policies to promote fair competition and restrict enterprises from unfair competition in a way below cost. The second is to properly handle the relationship between "promising government" and "effective market" to prevent improper government intervention from aggravating overcapacity. Third, chain owners should actively take measures to comprehensively sort out the problems existing in product pricing, wages and benefits, labor assessment, etc., seriously think about it, take the initiative to take improvement measures, respond to social concerns, and make contributions to changing the "involution" competition. Finally, scientific and technological innovation should lead the development of new quality productive forces and accelerate the formation of new competitive advantages. Of course, this process is inseparable from the support of the academic community. The "involution" competition among enterprises in China has posed a very important question not only to China, but also to global economists, that is, how to reshape the world trade theory in theory. With the improvement of China’s economic development level, the basic theory of world trade and competition may change. The practice of simply relying on cost theory to build a theoretical framework needs to be adjusted in the current situation, and it is suggested to strengthen theoretical research in this field in the future. (Moderator: Li Pan)

　　Xinhua News Agency, Beijing, April 14 th Question: Why can you cheat billions of dollars by making a phone call? — — Taiwan Province telecom fraud suspects reveal fraud shady.

　　Xinhua news agency reporter

　　Recently, 77 suspects of telecom fraud were repatriated to Chinese mainland, including 32 from mainland China and 45 from Taiwan Province. This is the first time that China has brought back a telecom fraud suspect from Africa on a large scale.

　　Why are criminal dens located in distant Africa? How do criminal suspects commit telecom fraud on Chinese mainland people "from a distance"? How do a large number of fraud gangs divide their work and cooperate? What kind of fraud tricks are behind their repeated success and taking away hundreds of millions of stolen money?

　　On the 14th, with the approval of the case-handling organ, the reporter interviewed the police handling the case and some telecom fraud suspects in custody.

　　Deceptions are interlocking, and the spoils are divided according to the "basic salary" and "commission"

　　The suspect, Jane, born in 1992, is from Taoyuan, Taiwan Province, and came to Kenya in October 2014 through a friend, Ayao.

　　"Yao arranged for me to go to Jimmy’s place and let me pretend to be a policeman and call to cheat money." Jane confessed that the whole gang lived in the villa rented by Jimmy (one of the suspects, responsible for outreach, translation, transportation, etc.). According to the different division of labor, the "first line" lives on the first floor, and the "second line" and "third line" live on the second floor; The boss "Pangcai" lives alone in a room on the first floor. Jane is a "second line".

　　The so-called "first line", "second line" and "third line", Jane further introduced: "first line" about 10 people, in the first floor living room to answer the "customer" (victim) phone. "They are all landlines, and there are about a dozen telephones, one for each person; In addition, there is a person who specializes in operating computers. "

　　The "second-line" people are all on the second floor, and there are also 10 people in four or five rooms, each with two landlines. There are fewer people on the "third line", and they are also on the second floor, making phone calls in one room.

　　So, how did this gang commit fraud?

　　According to the police investigating the case, first of all, the person operating the computer in the "first line" sent a group call service to the mainland according to the telephone number given by the boss. "The mainland people received a voice packet saying that there was something wrong with your medical insurance card. Please press 9 for more information."

　　If the victims press the "9" key, the phone will be connected to the "front line" person. “‘ First line ’ Some people pretend to be medical insurance personnel, take customers’ identity information in the name of inquiry, and tell customers that their information has been stolen. ‘ First line ’ They all speak according to the contents of the speech list, and then transfer the call to us ‘ Second line ’ At the same time, people sent a note with the customer’s name and ID number on it. " Jane confessed.

　　"Our second-line people pretend to be police officers of Chaoyang Branch of Beijing Public Security Bureau or Criminal Investigation Team of Shunyi Branch, and accept the customer’s report. After the customer has finished speaking, we will ask them to wait and call them back later." Jane confessed, "After hanging up, we used the landline to call the customer back, pretending to be a police officer of the criminal investigation team, and then telling the customer according to the contents of the call sheet that their identity information was stolen and suspected of money laundering, and asked the customer to provide name, family situation, occupation, income and other information, as well as bank accounts they often use."

　　In order to convince the victims, fraud gangs will also play pre-recorded background sounds when making phone calls, such as hospitals, public security bureaus and other scenes; At the same time, we also use the number change software, which can display the incoming call as the phone number of any public security organ in mainland China.

　　"We asked the customer to dial 114 to check whether the number displayed on the mobile phone is the phone number of the Public Security Bureau. We will give him a minute to check the time, and then dial it again. " Jane said that they will further ask the victim’s account balance. If it is small, the second line will directly trick the other party into transferring money and remittance; If the amount is large, the call will be transferred to the "third line", and the person from the "third line" will pretend to be the head of the financial crime department and continue to talk to the victim about remittance and transfer.

　　One of the "three lines", the suspect Xu confessed, "We know which bank the customer uses to transfer money when talking to the customer, so we will ask the boss for the account number of which bank. The other party is eager to prove innocence to us, and we will provide one ‘ Security account number ’ Let the other party transfer the money to this account, which will be inquired by our financial crime department and transferred by ATM according to our instructions on the phone. "

　　According to the police investigating the case, the "third line" has the highest technical content in the whole criminal chain, and has clever deception, which can cope with various problems and doubts of the victims. Sometimes, for a "big order", the boss will even invite an "excellent" "third line" to play, with the ultimate goal of tricking the victim into remitting money into a designated bank account.

　　How do criminal suspects divide the stolen goods?

　　According to reports, there is a whiteboard in the living room on the first and second floors. Who negotiated the list and which account received the money will be recorded on the whiteboard. The boss pays the bill once a month, and the "first line" takes "basic salary+commission", with a basic salary of 5,000 yuan, and the commission is generally 3% of the amount of each fraud; "Second-line" only has "commission", which is 4%— 5%； The "third line" with the highest "technology" content can get 8%.

　　The backbone of gang bosses with higher degree of specialization are all from Taiwan Province.

　　According to the police investigating the case, in many telecom fraud gangs, the bosses and backbones are all from Taiwan Province, as are the fraud gangs where Jane and Xu are located — — The bosses "Pangcai", "Second Line" and "Third Line" are all from Taiwan Province, and the script "Speech Script" is also written by Taiwan Province people. The "first line" is dominated by mainlanders with little fraud experience.

　　When recruiting personnel, the boss "Fat Wealth" especially pays attention to those who have fraud experience and criminal record, and tries every means to attract them. Xu is one of them. As soon as he arrived in Kenya, he was entrusted with the "third-line" responsibility and pretended to be the "Chief of the Financial Crimes Section".

　　"I am familiar with the process of telecom fraud, so Pangcai found me and asked me to join him ‘ Start work ’ 。” Xu, a 37-year-old native of Taichung, Taiwan Province, was sentenced to 7 months’ imprisonment by Taichung City Court in 2010 for fraud, and was released after serving his sentence. At the end of July 2014, he was recruited to Kenya by "Pangcai" and was arrested and detained by local law enforcement agencies in November of that year on suspicion of committing crimes. On April 9 this year, Xu was sent back to Chinese mainland.

　　Jane also has a criminal record. She fought and took drugs since she was a child. She dropped out of high school and was unemployed. She was dealt with by the Taiwan Province police for taking K powder, claiming that she was still wanted by the Taiwan Province police. According to his confession, as soon as he arrived in Kenya, the boss sent him a "speech sheet" to learn from it and recite it over and over again, so that he could answer questions when committing fraud.

　　Within the gang, there is not only a clear division of labor, but also very strict management. In order to ensure that all members concentrate on investment and improve the success rate of fraud, there are still strict boundaries between the "lines". “‘ First line ’ ‘ Second line ’ When talking about the list, no one else can be near; ‘ Third line ’ They are all in the same house, and no one can go in except the boss. " Jane said.

　　According to another introduction, the boss’s "fat money" generally pays a salary in advance and promises a high salary in order to win people’s confidence. For example, "Pangcai" once lent more than NT$ 100,000 to Xu by way of advance, which made Xu, who had a difficult family, grateful and worked hard for him. However, after the crime of fraud is successful, "Fat Wealth" always refuses to pay wages for various reasons.

　　According to the police investigating the case, Taiwan Province Telecom’s fraud started earlier, and the main target of fraud was the people of Taiwan Province. With Taiwan Province stepping up anti-fraud propaganda, there is no market for fraud. Around 2002, telecom fraud gangs, which were difficult to establish themselves in Taiwan Province, set their sights on the mainland and began to move to Fujian and other places, mainly to defraud the mainland people.

　　Zhang Jun, deputy director of the Criminal Investigation Bureau of the Ministry of Public Security, said that another reason why Taiwan Province Telecom’s fraud crimes are developed is that they can constantly update their scripts, among which the scripts of the Public Prosecution Law are "classic" and have been tried and tested on the grounds that victims’ accounts are involved in criminal cases.

　　"Some parts of the front line may change, such as pretending to be medical insurance, post office, express delivery, gehuayouxian, etc., but then they will still use the people’s awe and trust in the public security law to pretend to be the staff of the public security organs and complete the fraud process." Zhang Jun said. One of the latest fraud methods is to open a "cottage website" of Chinese mainland judicial organs, make a "wanted order" based on the identity information and photos provided by the victims, hang it online, and send the link to the victims; If the victim is a middle-aged and elderly person who can’t surf the Internet, he will send a "wanted order" by fax, so that the victim can believe it and fall into a trap when he is surprised and afraid.

　　In April 2009, the two sides signed the Agreement on Combating Crimes and Mutual Legal Assistance across the Taiwan Strait, which intensified the joint crackdown on telecom fraud. Fraud gangs then moved to Southeast Asia, Africa, Oceania and other countries, and some gangs also moved to the Russian Far East to implement cross-border telecom fraud.

　　"The dens of fraud are getting farther and farther away. Like this Kenyan case, they mainly consider staying away from Chinese mainland, making it more difficult to arrest, so as to escape the blow. But no matter how far the suspect runs, we have the confidence and ability to arrest him. " Zhang Jun said.

　　"Things have developed to this day, all of which are my own self-inflicted, all of which are my retribution, but the deceived mainland people must be more sad. I say sorry to these mainland people, and I am willing to accept legal sanctions. I will definitely turn over a new leaf in the future, and I will never do bad things again. If I have the opportunity, I will definitely engage in legitimate work. " Xu deeply repented.

　　Jane also expressed regret: "I knew from the beginning that I was going to defraud the mainland people. Fraud is a wrong act, an unnatural thing, and there will be karma. I want to sincerely apologize to the people who have been deceived in the mainland. I am willing to accept legal sanctions and hope to be treated leniently. "

　　Every year, 10 billion yuan is defrauded, and Taiwan’ s crackdown needs to be intensified.

　　According to the relevant person in charge of the Ministry of Public Security, telecom fraud crimes have intensified in recent years, and the number of cases has increased by 20% to 30% annually. Among them, the telecom fraud criminal group headed by Taiwan Province criminal suspects set up fraud dens in Southeast Asia, Africa, Oceania and other countries, recruited telephone operators, and pretended to be the mainland public security organs to madly commit telecom fraud to the mainland people. The harm was very serious and the people hated it. According to statistics, the losses of fraud cases committed by telecom fraud criminal gangs with Taiwan Province as the backbone account for more than 50% of the total losses of telecom fraud cases, and the major cases of more than 10 million yuan are basically committed by Taiwan Province telecom fraud group. For example, on December 29th, 2015, Yang, the cashier of the Construction Bureau of Duyun Economic Development Zone in Guizhou, was cheated by Taiwan Province Telecom Fraud Group for 117 million yuan.

　　In view of the grim situation of telecom fraud related to Chinese mainland, the public security organs in have always maintained a high-pressure and severe crackdown situation, and have continued to organize crackdown operations, and joined hands with the Taiwan Province police to carry out police law enforcement cooperation. Since 2011, the police on both sides of the Taiwan Straits have joined hands to go to Indonesia, Cambodia, the Philippines and other countries, and organized several transnational and cross-strait simultaneous arrests, arresting more than 7,700 telecom fraud suspects, including more than 4,600 suspects from Taiwan Province.

　　However, due to the fact that Taiwan Province’s laws impose a lighter sentence on telecom fraud crimes, and the standards of evidence identification are quite different from those in mainland China, many criminal suspects can’t be convicted or have a lighter sentence for a felony, and less than 10% of them are sentenced. In August 2013, 21 gang leaders, including suspects Lin Minghao, Liang Jiabi and Wu Hanjie, were captured by Beijing public security organs in Cambodia and handed over to Taiwan Province police. In 2015, they appeared in Indonesia, Cambodia, Australia and other countries to open fraud dens, recruit soldiers and continue to commit crimes.

　　Statistics show that every year, more than 10 billion yuan of telecom fraud money is swept from the mainland to Taiwan Province by swindlers. Although the mainland public security organs have taken various measures to recover it, they have only recovered 207,000 yuan from Taiwan Province.

　　Due to Taiwan’s ineffective crackdown and the difficulty in recovering the stolen money, the arrogance and criminal desire of swindlers have been encouraged, which has led to repeated attacks by telecom fraud criminal gangs with Taiwan Province as the backbone, hiding overseas and committing crimes crazily, causing huge economic losses to mainland people. Criminals in Taiwan Province used the money they cheated to buy luxury houses and luxury cars, went to casinos to gamble and splurge, and publicly clamored that they would "cheat all the mainland’s money". According to the data from Taiwan Province, there are nearly 100,000 people in Taiwan Province who make a living by committing telecommunication fraud.

　　"The mainland has handed over a large number of Taiwan Province telecom fraud suspects to Taiwan Province, but the Taiwan side did not severely punish them, but sentenced them lightly or even acquitted them, which led to the suspects’ aggravation and became recidivists and recidivists. The amount of fraud was huge, and mainland residents and enterprises suffered serious losses. If this momentum cannot be stopped in time, the consequences will be unimaginable. " Liu Huawen, assistant to the director of the Institute of International Law of the Chinese Academy of Social Sciences, believes that cross-strait cooperation to combat telecom fraud needs to be strengthened, and hopes that Taiwan Province will attach great importance to it.

　　"Taiwan Province has not formulated criminal law provisions specifically for telecom fraud, but treats telecom fraud as a general fraud, with a low sentence, insufficient economic sanctions, lax legislation and too light punishment." Fan Chongyi, a professor at the Institute of Litigation Law of China University of Political Science and Law, believes that "Taiwan Province should intensify the crackdown on telecom fraud through legislation, and improve the determination of charges, methods of crackdown, and punishment rules so that criminals can get the punishment they deserve."