BEIJING -- China's Ministry of Public Security (MPS) plans to set up a 
database of people involved in pyramid selling schemes, in an effort to step up 
the crackdown on these illegal activities. 
The MPS and local police departments at all levels will work together to 
collect data and information about organizers and core members, said Zheng 
Shaodong, a senior police officer in charge of financial crimes, at Wednesday's 
national conference on the issue held in Jinan, the capital of Shandong 
Province, East China. 
The State Administration of Industry and Commerce (SAIC) will also set up a 
database on these criminals, and monitor and severely punish people involved in 
illegal sales, according to SAIC Deputy Director Zhong Youping. 
The MPS official said pyramid sellers had had a very negative impact on 
social stability. He said that some organizers had achieved psychological 
mastery over members, violating the law and basic ethics by repeatedly 
brainwashing them with distorted facts. 
Pyramid selling groups are well organized and some operate under the disguise 
of corporations or chain stores. Many of them do business on the Internet or use 
other high-tech commercial methods. 
MPS and SAIC have already launched a year-long campaign on pyramid selling 
across China, mainly targeting organizations engaged in recruiting students into 
the illegal business. 
In the first eight months of the year, Chinese authorities investigated 2,441 
pyramid selling cases, cutting off sources of illegal work for as many as 
420,000 people. 
Compared to 2005, illegal sales activities are now better controlled in most 
parts of the country. This year, the campaign will focus on Guangxi Zhuang 
Autonomous Region, and Guangdong, Shandong and Henan provinces and 10 other 
regions, where pyramid selling has been particularly rampant, according to the 
MPS official. 
In 1998, the authorities banned pyramid selling schemes, or multi-level 
marketing, but allowed direct-sales activities to continue in the country. Since 
then, companies involved in direct selling have been ordered to open 
shops.