BECAUSE MINOR INFRACTION OF CIVIL AND CRIMINAL LAW ARE HANDLED BY INFORMAL CITIZEN GROUPS, ONLY THOSE CONVICTED OF MORE SERIOUS CRIMES ARE SENTENCED TO CORRECTIONAL INSTITUTIONS. THE RATE OF SERIOUS CRIME AND INCARCERATION IS LOW. THE PURPOSE OF DETENTION AT THE LABOR FARM IS TO REHABILITATE INMATES THROUGH A REGIMEN OF 'REFORM THROUGH LABOR.' ALL PRISONERS WORK AN 8-HOUR DAY FOLLOWED BY 2 HOURS OF STUDY, POLITICAL DISCUSSIONS, AND SELF-CRITICISM. ABOUT 2,500 MALE PRISONERS LIVE AND WORK AT THE 1,500-ACRE COMPLEX. THE BULK OF THE POPULATION, CLASSIFIED AS EITHER CRIMINALS OR COUNTERREVOLUTIONARIES, ARE EMPLOYED IN GROWING RICE AND TEA, WHILE THE REST WORK IN THE MACHINE SHOP OR BALLBEARING FACTORY. SENTENCING POLICY AT THE FARM COMBINES PUNISHMENT WITH LENIENCY, AND DEPENDING ON THE INMATE'S BEHAVIOR AND ATTITUDE, AUTHORITIES MAY REDUCE OR EXTEND PRISON TERMS. A 1-DAY HOLIDAY IS GRANTED EVERY 10 DAYS AND VISITS BY RELATIVES ARE ENCOURAGED, ALTHOUGH NO CONJUGAL PRIVILEGES ARE EXTENDED. JOB ASSIGNMENTS TAKE INTO CONSIDERATION THE CRIMINAL'S FORMER OCCUPATION AS WELL AS HIS PHYSICAL CONDITION. HOWEVER, INMATES DO NOT PERFORM CLERICAL OR ADMINISTRATIVE TASKS. FARM PRISONERS ARE HOUSED IN SINGLE-STORY BARRACKS ACCOMMODATING ABOUT 20 INMATES SLEEPING ON BAMBOO MATS. THE TOTAL POPULATION OF THE MUNICIPAL JAIL LOCATED IN THE HEART OF SHANGHAI IS 2,753, INCLUDING ABOUT 200 FEMALES. THOSE REGARDED AS COUNTERREVOLUTIONARIES CONSTITUTE ABOUT 20 PERCENT OF THE TOTAL; THE OTHERS WERE JAILED FOR RAPE, THEFT, ASSAULT, MURDER, AND EMBEZZLEMENT. THE LIVING QUARTERS ARE MADE UP OF FULLY ENCLOSED STEEL CELLS MEASURING ABOUT 6 BY 9 FEET AND HOUSING AS MANY AS 3 INMATES. MANY OF THE CELL BLOCKS OF THIS FORMER BRITISH PRISON HAVE BEEN CONVERTED TO FACTORY OPERATIONS. ABOUT 40 INMATES MANUFACTURE WRISTWATCH CASES AND RIMS, WHILE OTHERS WORK IN A PRINTING SHOP. MOST ARE EMPLOYED IN A TEXTILE WORKSHOP. TOTAL ANNUAL PRISON OUTPUT EXCEEDS $10 MILLION, MORE THAN ENOUGH TO PAY FOR OPERATING THE INSTITUTION. REFERENCES ARE FOOTNOTED. (KBL)