China gives me the impression that they would take these incidents seriously and punish the perpetrators. I can see how they deal with drug related crimes.

So I wonder what the authorities did here. Was this even reported to them?

It really depends on how widespread and who's involved into this, politicians, etc.. It's not unlike mafia that is punishing competitors but let 'friends' slide by if they pay their tax. There is plenty of corruption in China as well. The only difference is that when they punish someone it's often capital punishment.