Illicit Parallel Trading, State Permission, and Legality: A Comparative Analysis in the Southern Chinese Seaboard

Ka Ki Lawrence Ho, , KuoRayMao, Henry Hin-Yan Chan and Alex Hagan

No c3d2b_v1, SocArXiv from Center for Open Science

Abstract: This article applies institutional and media content analysis to investigate the legitimation and criminalisation of cross-border trade within the “Southern Chinese Seaboard,” specifically between Taiwan and China and between Hong Kong and mainland China, a region characterised by diverse taxation and legal jurisdictions, as well as rapidly evolving political-economic and regional geo-political dynamics. This study re-evaluates common media portrayals and simplistic perceptions of “illicit” and “parallel trading” as merely spontaneous actions by individuals embedded in criminal networks. Instead, we posit that such activities stem from deliberately vague taxation and legal definitions, as well as enforcement strategies resulting from collusion between state and non-state actors. Utilising the “Regime of Permission” framework, this study examines how political actors manipulate the definitions of licit and illicit trading to achieve political objectives, thereby creating loopholes that non-state actors exploit. The findings demonstrate that the delineation and oversight of illicit trade have evolved in response to shifting economic relationships and the development of enforcement institutions within a changing geo-political landscape, offering deeper insight into the state’s role in creating and maintaining liminal spaces that regulate the boundaries between lawful, unlawful, and socially illicit trade.

Date: 2026-03-03
New Economics Papers: this item is included in nep-cna, nep-law and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:c3d2b_v1

DOI: 10.31219/osf.io/c3d2b_v1

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