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A vase in a museum inside of the Forbidden City in Beijing, China. 2011Sean Gallagher

The Forbidden City is at once a symbol of China's long cultural heritage and the face of the modern state's power. But in a year that has seen a thief tunnel through the walls, artworks smashed by staff and allegations of tax evasion levelled against senior management, the red-walled palace compound has also become a source of quiet national shame.

Things are going so poorly for the 600-year-old palace and its management that even an attempt to celebrate the tunnel bandit's capture blew up into another scandal. Rather than thanking police for protecting the country's treasures, a misprinted red banner presented to the Beijing Public Security Bureau instead urged officers to "shake the prosperity of the motherland."

The scandals inside the Forbidden City – the former home of emperors and eunuchs which now sees some 80,000 tourists a day – have continued to multiply in recent weeks, leading some to question not just the management of the Palace Museum, but whether China's bureaucracy is any different in 2011 than the corrupt and decadent last days of the Qing dynasty.

"The administration is the problem. The old habits last until today," said a 58-year-old shopkeeper named Zhang who sells replica Qing-era hats and fans just outside the Forbidden City's imposing east gate. "It's a closed place, separate from the outside world."

In the eyes of many, the scandals point to a wider culture of impunity among Chinese government officials. "Today, we cannot but doubt museum management's ability to clean up its act," read a recent article in the Caixin newspaper. "Has China's most important cultural heritage site been entrusted to the wrong people?"

Here are a few of the scams and thefts that have come to light:

1 – Around midnight on May 8, nine purses and jewellery boxes on loan from a private Hong Kong museum were stolen by a thief who dug his way past the Forbidden City's 240 guards, 3,700 cameras and 1,600 anti-theft alarms. The thief, a 28-year-old unemployed man who said he needed money, was captured at an Internet café three days later.

2 – May 11. Rui Chenggang, a prominent anchor on state-run CCTV news, alleges on his blog that one of the buildings inside the Forbidden City walls – the 269-year-old Palace of Established Happiness – had been converted into a private establishment for "the 500 richest people in the world." The museum denied the existence of a VIP club, but acknowledged that the Palace of Established Happiness, which is in an area closed to the general public, "is mainly used to receive distinguished guests from home and abroad."

3 – May 13. Amid a growing furor over the private club, the deputy curator of the Palace Museum presents the misprinted banner (which the semi-official Global Times newspaper suggested was "treasonous") to Beijing's Public Security Bureau, sending waves of derision across the Chinese Internet. The museum's administration spent three disastrous days denying any error had been made before finally admitting that the slip "seriously harmed the museum's reputation… . We are sorry for not making a timely correction and for blaming the error on subordinates."

4 – July 4. Staff using the wrong settings on a pressure-testing device smashes a 1,000-year-old Southern Song dynasty treasure – the Celadon Plate With a Mouth in the Shape of Mallow Petals – into six pieces. The museum tries to hush up the incident, until a whistleblower posts details of the $3-million accident on their microblog. Once more, the Palace Museum is forced to apologize.

5 – Aug. 2. The same whistleblower alleges that other ancient artifacts – including 10 important Buddha statues – have been damaged in recent years by poor handling and storage. Termites originally discovered in 2006 are also said to be back – some of the palace's iconic red pillars are "completely hollowed out" according to one Chinese media report – threatening the very foundations of the Forbidden City.

6 – Aug. 9. Caixin reports on a scam that saw tour guides and Forbidden City staff work together to bring thousands of tourists in a side door and pocketing the ticket money. Caught on video in 2009, the ringleaders offered 200,000 yuan (about $30,000) to try and keep the scam out of the media. In the museum's telling, it paid 80,000 yuan to the witness in exchange for information that helped police crack the case. "The corruption started long time ago, now it's just starting to become visible from outside," said Zhu Dake, a professor in the institute of cultural criticism at Shanghai's Tongji University.

7 – Aug. 5. Chinese Internet users uncover that five Song Dynasty letters, purchased by the Palace Museum in 1997, were sold at three times the buying price in a 2005 auction. The museum claims that the initial sale never went through (and therefore that it never owned nor resold the letters) although the 1997 purchase of the documents is "mistakenly" included by staff in a book on the museum's history.

8 – Aug. 18. Someone claiming to be a Forbidden City employee sends a letter to the Beijing Times, claiming that more than 100 rare books have gone missing from the Palace Museum's collection and that staff have been instructed not to investigate where they are or how they could have been lost. The museum administration admitted in a response that "by 2009, more than 100 out of 200,000 volumes [in its collection]could not be accounted for. The checking has not been completed as yet so these books can still not be firmly identified as lost."

9 – Aug. 17. A former Bank of China official, accused the Palace Museum of not paying tax on ticket revenues from exhibitions held outside the main gate. (The Forbidden City sits in the heart of Beijing, on the north edge of Tiananmen Square.) The museum responded that the exhibitions were not under its administration, but an article in the Global Times quotes a lawyer suggesting the museum's "main manager" could face up to seven years in jail if the tax-evasion allegations were proven.

10 – Aug. 24. Eight paintings are discovered to have disappeared from the rostrum overlooking Tiananmen Square, the place from where Mao Zedong proclaimed the birth of the People's Republic in 1949. "I've heard about all these [scandals]and read about them on the Internet," said Kevin Qu, an independent guide who gives English-language tours of the palace complex. "I choose not to tell the tourists about them, though, because I don't consider them honourable parts of our history."

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