The Finances of Baby Trafficking

The recent news story of baby trafficking in the Hunan Province of China offers a disturbing view into the hidden market for young children. Although many Western adoptive parents read such stories with awe and puzzlement, this case has struck particularly close to home, given the involvement of individuals involved with the international adoption program. This recent event represents a convergence of two powerful market forces, the international adoption program, and the domestic demand in China for infants.

Unfortunately, Western News organizations have misunderstood both the causes and forces behind these stories. Reuters, for example, asserts “The sale of children, and women, is a nationwide problem in China, where stringent rules on family planning allow couples to have just one child, at least in cities.” (http://www.alertnet.org/thenews/newsdesk/PEK244547.htm). This statement is flawed factually and logically, but the truth does lie beneath the surface.

Baby trafficking has its foundation in childless couples wanting offspring, a condition that exists in every country of the world. Since childlessness has nothing to do with the one-child policy, the demand for children in China is not related to any governmental policy. It is important to understand that most of the people buying these black-market children are married and have no children. Thus, they are seeking young, healthy infants of either sex.

What puzzles most adoptive families is why there would be a black market at all for babies, given the perceived abundance of unwanted baby girls in China’s orphanages. Why don’t these families simply go to an orphanage and adopt a child, rather than face the potential consequences of buying a baby on the black market? The case of “Xiao Mei” (not her real name) will serve to answer that question.

Xiao Mei is a 33 year-old married ovarian cancer survivor. Unable to have biological children, in 2004 she began contacting orphanages to arrange an adoption of a baby girl. The first orphanage she called was the Guangzhou orphanage, since she and her husband live in that city. She was told that only registered residents of Guangzhou are permitted to adopt from the Guangzhou orphanage. Additionally, she was informed that families adopting had to be at least 30 years old, have a stable income, and have no other children. She was told to contact the orphanage in the city where she was registered.

She then contacted the Zhuzhou orphanage in Hunan Province, her city of registry. There she was informed that because she was married to someone from Henan Province, that she must contact the orphanage in that area. Zhuzhou was unwilling to allow them to adopt a child from their orphanage.

When she contacted the Zhumadian orphanage in Henan Province, her husband’s city of registry, she was informed that there were no healthy babies available for adoption. She was told, however, that if she were willing to adopt an older child, or a child with special needs, that there were some available. Since Xiao Mei wanted a child less than a year old and healthy, she declined (Xiao Mei is atypical in requesting a child up to one year old. Most domestic adoptions occur before the child is 2 months old).

Finally, Xiao Mei contacted the Yulin City orphanage in Guangxi Province. Here at last she met with success. Having few adoption criteria, the Yulin orphanage indicated that there were several healthy young babies available for domestic adoption.

But by this time, Xiao Mei was contacted by a friend who knew a family that had just given birth to an unwanted baby girl. This family already had an older girl, and didn’t want to keep the second girl. Would Xiao Mei be interested in adopting this child? Xiao Mei jumped at the chance, and after paying the mutual friend 700 yuan ($90), and assisting in the delivery expenses of 6,600 yuan ($800), she assumed custody of the week-old child. All arrangements were done orally, and neither party knew of the other.

Why was Xiao Mei willing to purchase her daughter instead of formally adopting her from an orphanage? The decision was not financially motivated, since in addition to the delivery expenses she will also have to pay the fine to register her daughter and obtain the I.D. card required for schooling. Xiao Mei simply decided that it was easier to obtain a black-market baby. In addition to the paperwork that all orphanages would require, Xiao Mei was frustrated by the bureaucracy she had experienced in her discussions with the orphanages.

As adoptive parents, we might find this puzzling. Often we assume that the children that are adopted internationally from China are the children that remain unadopted by Chinese families. But as Xiao Mei’s experience shows, this might not in fact be the case. It seems that some orphanages engaged in international adoptions have established barriers to domestic adoptions, be they high adoption donations (upwards of 20,000 yuan ($2,500) in some cases), demographic constraints, or geographic requirements. Two of the four orphanages Xiao Mei contacted were unwilling to adopt a child to her, when there were patently children available; instead, they erected geographical constrains that prevented her from “qualifying” to adopt. Only one of the four, the Yulin orphanage in Guangxi, seemed willing to adopt a child to her.

Why would the Guangzhou and Zhuzhou orphanages be unwilling to adopt a child to someone within China, while actively participating in the international adoption program? As in most questions of this nature, it is helpful to follow the money.

Prior to around 2001, orphanages participating in the international adoption program were permitted to submit a CCAA-calculated number of dossiers each year. Under this program, the CCAA anticipated the number of children that would be internationally adopted each year, and assigned each orphanage a number of children they could submit for adoption. Although this resulted in a balance being struck between “supply” and “demand”, it had the unfortunate consequence of having the directors hold back dossiers for older children or those with special needs. In 2000 and 2001, I would read of families being told by the CCAA that there were no older children available for adoption, yet simultaneously touring orphanages with scores of older children playing in their halls. This discrepancy was a result of simple market forces – directors, working under their quota, were submitting only what they perceived as the most marketable children – healthy infant girls.

In 2001, the CCAA lifted the quota system and allowed orphanages to forward dossiers on all the children in their care. The Waiting Child program was established, and many more older and special needs children were adopted. But now another result occurred: the perception by some directors of their children as internationally adoptable commodities.

The simple reality of the international adoption program is that each child in an orphanage that is in the CCAA’s program is worth $3,000 in donations to that orphanage. The more children an orphanage adopts internationally, the more revenue it receives. For these orphanages, the $100,000 to $500,000 in annual donations represents a huge resource with which to build new facilities, improve salaries and wages for orphanage employees, and otherwise improve the lives of the other children. Thus, some directors have sought opportunities to increase their revenue by various means, some legal and others illegal.

One legal method employed by some orphanages is to make alliances with nearby non-internationally adopting orphanages to provide children to the orphanage. No doubt some sort of “profit-sharing” arrangement is devised. This allows the primary orphanage to submit more dossiers, and also allows the secondary orphanage to obtain much needed revenue that would otherwise not be available. Both benefit.

But the recent case in Hunan illustrates another method, this one illegal, to increase the supply of children. Allegedly the director of the Hengyang County orphanage (an orphanage that participates in the international adoption program) brokered kidnaped children into his orphanage, as well as orphanages in other Provinces. Given the highly lucrative nature of the international adoption program, the question is not how did this happen, but how come it hasn’t happened more often. As the above-quoted Reuters article accurately stated, "Some families that cannot have children of their own are desperate for kids, so these factors combine into a way for orphanages to make big money." Big money indeed.

Something must be done to rectify the current program. One possible solution would be the re-implementation of the quota system, with a few variations. First, special needs and older children would be exempt from the quota. Thus, only healthy infant girls would be subject to dossier limitations. Although this would cap the potential income a particular orphanage would obtain through international adoptions, it would discourage and prevent abuses like those seen in Hengyang – there would no longer be the financial incentive. Additionally, the quota would necessitate more orphanages being brought into the international program, since each of the current orphanages would no longer be able to submit as many dossiers. This would effectively spread the benefit of foreign adoptions among more orphanages, resulting in quality of life improvements being received by more of China’s orphans.

The exposure of this trafficking ring has cast a seriously bad light on the Chinese adoption program. No doubt the participants will be dealt with swiftly and harshly. But the real problem lies in the underlying financial structure that forms the basis of the foreign adoption program. Until the CCAA addresses the inequalities brought about by the current system, it is simply a matter of time before another director seeks to gain in the same way as Hengyang’s did. Perhaps some already do.