Today, China has a relatively low crime rate compared to many other countries. However, China has been one of the countries with the highest crime increase during the past three decades. Organized crime is expanding with the organized crime (OC) and criminal groups working differently than those criminals who act alone. The criminal underworld growing in China has eroded law and order, social stability, the market economy, and the political legitimacy and governance of the Communist Party. The upsurge in criminality and the deterioration of the control system indicate that the superstructure of the Chinese communist regime faces a strong wall of resistance and sabotage, as well as other forms of contention. Two trends have occurred: (1) the opening up of the public space, fostering the development of a civil society and (2) the swelling of the hidden space that breeds a society consisting mainly of the criminal underworld. Crime has been growing in China since the early 1970s, as well as a resurgence of the criminal underworld. It has been encroaching on the economy and infiltrating politics. This caused a debate on the scope and cause of the criminal underworld in China during the 1990s, intensifying over the years. Utilizing collected crime statistics, this paper attempts to describe and explain group crime in China. With this information, the paper constructs a more systematic and quantitative assessment of the criminal underworld in China during a period of more than two decades (the 1970s to the present). An explanation is then proposed placing more emphasis on state and political power. It is argued that due to the structural flaws in the political system and the ineffectiveness of government anti-crime policy, a rising criminal underworld has emerged as a new dynamic force shaping the future of China’s transition. Tables, figures