It's true that China doesn't suffer from a shortage of labor force. However, wages raised a lot, and almost-free labor is more interesting financially. After second thoughts, I think it may be possible that on a regional scale, local officials would find such practice highly profitable.

The party goal is not to be highly profitable (they are already), it's to stay in power as long as they can. Of course money can help in that goal, but such practices, if they leak and are confirmed, would just erode the stability of the state. I feel the cons are too high and pros too low, politically, to do such atrocities on a country scale.