BEIJING/WASHINGTON (Reuters) - After China abolished a notorious penal system based on forced labor in December 2013, the United States rewarded Beijing by removing the world’s most populous country from a global blacklist of countries that are failing to combat modern-day slavery.

Iron wire fencing is seen outside a labour camp in Kunming, Yunnan province, November 22, 2013. REUTERS/John Ruwitch

Shutting the detention camps had been a U.S. priority for more than a decade, according to a previously unreleased U.S. State Department memo seen by Reuters.

But two years after China announced it was ending the “re-education through labor” system, extrajudicial networks of detention facilities featuring torture and forced labor thrive in its place, according to former detainees, their lawyers and people with knowledge of the facilities.

Between February and April this year, State Department human rights experts cited these facilities as reason to downgrade China to the blacklist again, according to documents reviewed by Reuters and not previously made public.

The downgrade would have placed China on the lowest Tier 3 of an annual evaluation of how 188 countries deal with modern slavery, a status shared by serial abusers of forced labor or trafficking including North Korea, Russia and Thailand.

The experts were overruled by senior American diplomats in the final report on July 27. It was one of more than a dozen decisions on country rankings documented by Reuters that have raised questions over whether the Obama administration placed diplomatic priorities over human rights in the congressionally mandated report that can incur sanctions. The report came at a time of sensitive U.S. diplomatic issues with China, ranging from cybersecurity to tensions in the South China Sea.

In all, the experts in the State Department’s Office to Monitor and Combat Trafficking in Persons disagreed with U.S. diplomatic bureaus on ratings for 17 countries including China in this year’s Trafficking in Persons report, a Reuters story on Aug. 3 showed. The experts won only three of those battles, the worst ratio in the 15-year history of the unit.

“Trafficking and human rights fall into the basket of things we’d like to make progress on but probably won’t,” said one congressional aide with knowledge of the back and forth over China’s trafficking ranking.

In this year’s trafficking report, the State Department acknowledged that China converted the nearly six-decade-old labor camps into other detention facilities but decided a downgrade was unjustified, citing a rise in arrests and convictions of suspected human traffickers and better international cooperation to fight modern slavery.

The Trafficking in Persons report, meant to independently grade countries on trafficking and forced labor, calls itself the world’s most comprehensive resource of governmental anti-human trafficking efforts. Rights groups generally agree. Countries often lobby the State Department to stay off Tier 3, which can trigger the withholding of aid.

In response to questions from Reuters, a State Department official said it stands behind “the integrity” of the report, including China’s ranking, which was kept on a “Tier 2 Watch List” for a second straight year. Asked whether the United States was aware of forced labor in the detention centers, the official said, “we are not able to quantify the extent of forced labor that occurs in these centers at this time.”

Chinese government authorities did not respond to requests for comment on any of the detention facilities mentioned in this article.

GULAG-LIKE CAMPS

Colloquially known as “laojiao”, China’s gulag-like re-education through labor camps drew domestic and international condemnation by empowering police to detain people for up to four years without trial, often forcing them to work in mines, factories or farms, according to rights groups.

A Human Rights Watch researcher estimated in 2013 that about 160,000 people, including drug addicts and members of banned religious groups, were held at about 350 laojiao camps before they were abolished.

Lawyers of detainees say that while China may have shut down the camps, similar abuses - including forced labor - continue in other types of detention centers.

Some people who might once have been sent to laojiao are disappearing into a secretive, illegal network of “education” facilities that sometimes employ torture techniques, according to former detainees and their lawyers.

Reuters was unable to independently verify conditions inside the detention centers now operating in China, or confirm the specific mistreatment described by the detainees.

Many of the laojiao camps have been turned into compulsory drug rehabilitation centers, where people considered addicts can be incarcerated for up to three years without trial, according to Chinese regulations and state media. In June, Chinese vice justice minister Zhang Sujun was quoted in state media as saying there were 334 compulsory drug rehab centers holding almost 240,000 people.

China has been reforming its rehabilitation system for drug users and some activists report improvements in conditions, including compensating inmates, if only with token amounts, for their work, and less use of violence.

A 2011 measure allowed addicts to work as part of their recovery for up to six hours a day but forbid forced labor in compulsory rehab centers.

Still, forced labor is common in the centers, said an activist with direct knowledge of the facilities who asked not to be identified for fear of punishment by authorities.

Inmates made lights, electronic parts and other products, he said. Pay is typically between 30-50 yuan ($4.62-$7.70) a month — around two percent of the average monthly wage in China, according to this person. Another person who has worked closely with drug addicts confirmed the existence of forced labor.

Another extrajudicial detention system, called “custody and education,” focuses on suspected prostitutes and their clients, holding them for up to two years without trial.

It shares traits of laojiao, including forced labor, say human rights advocates. China’s government has acknowledged that labor is a central component of this system. But the number of custody and education centers has shrunk in recent years, say lawyers and activists.

“BRAINWASHING CLASSES”

Yet another type of facility the government calls “legal education centers” is among the most secretive.

Detainees at these centers are illegally held without trial, four lawyers told Reuters. They are not formally charged, have no right of appeal and are not allowed access to lawyers or family members, lawyers said.

Many detainees are members of the Falun Gong spiritual movement that was outlawed in 1999 after seeking official legitimacy, say the lawyers. Others include victims of injustice who make personal appeals to the government for intervention in their case.

Reuters obtained written and video statements from nine former detainees of one such center in Jiansanjiang, in northeast Heilongjiang province. Five of them made allegations of torture in what they said those held there sometimes call “brainwashing classes”.

Meng Xianjie, 67, said her arms were strapped to wooden boards and she was injected with an “unknown medicine” that caused her to cough up blood, according to her written statement about her detention from January 2010.

Shi Mengchang described being forced to squat while handcuffed in a T-position for about five hours once during his detention from September 2013 to March 2014. Shi and Meng are both followers of Falun Gong, according to a fellow believer and a lawyer with direct knowledge of their situations.

In Washington, some lawmakers have questioned whether China’s dodging of a downgrade in the 2015 Trafficking in Persons report suggests geopolitics and the need to protect Washington’s delicate relationship with Beijing trumped human rights.

“China continues to force and detain its citizens to perform manual labor,” Chris Smith, a New Jersey Republican who authored a 2000 law that led to the creation of the trafficking report, told a Nov. 4 hearing. “How can a country that systematically traffics his own people be anything but Tier 3?”