A total of 67 people were arrested and 12 entertainment venues involved in the illegal sex trade were shut down late Sunday night after China Central Television (CCTV) revealed a dozen hotels in Dongguan, South China's Guangdong Province, offered sex services.

All local police station heads who were in charge of the districts where the illicit entertainment venues were operating have been suspended pending further investigation.

Undercover CCTV reporters went to hotels in five areas of Dongguan, a city which has been infamous for its large scale illegal sex industry for over a decade. The video taken by a hidden camera showed hotel managers organizing young women to appear in front of the reporter for selection.

The selected women would presumably offer sex services for fees ranging from hundreds to thousands of yuan. The video also showed similar "beauty show" activities taking place in KTV rooms. In one KTV room, two girls danced naked for customers.

"You just lie down there and the lady will serve you all around," one female manager told a reporter in the video, referring to the hotels' sexual bath services.

According to China's Law on Penalties for Administration of Public Security, prostitutes and customers are subject to detention and fines. Organizers are subject to criminal penalties.

However, hotel managers didn't seem worried about possible police raids or penalties. "We are fine. Being open to you now is proof," one female manager of a hotel in Humen, which is administered by Dongguan, assured the reporter. A clerk from another hotel said it is safe to buy sex there. "No police are coming, we would have been put out of business long ago if they had come."

A CCTV reporter called the police twice to report prostitution in two separate hotels. The phone operator promised to send police to investigate, but no police showed up.

Dongguan has long been known as China's "capital of sex," a moniker which was denied by its mayor Yuan Baocheng in an interview last year.

Comments online excoriated the inaction by local police, and some suggested that China should also set up special "sex zones."

Sociologist Li Yinhe believes that sometimes police are reluctant to respond because they are short of manpower, not necessarily because they are in league with people in the industry.

Li has been studying the sex life of Chinese society for years. She said it is hard to take away the sex industry in Dongguan because the demand is too strong. "Prostitution is all over the country. It booms in Dongguan because control over it is relatively loose there," Li said.

In 2010 Dongguan police paraded arrested sex workers on the street to humiliate them. The action was criticized by the public and by the Ministry of Public Security.

Li said the current anti-prostitution law does not help solve the problem and instead makes the situation worse. "It allows criminal organizations to take control of the industry because the government chooses to ignore it," said Li.

Li said legalization might help to solve the prostitution matter, but the biggest obstacle is attitudes toward morality. She said that part of the problem is that China declared the elimination of prostitution as a goal. "Legalizing prostitution is not permitted to be discussed," Li said.

While a few scholars have taken a liberal attitude toward sex workers' rights, they remain in the minority and have been sharply criticized.

National People's Congress deputy Chi Susheng, from Heilongjiang Province, has been fighting to legalize prostitution for many years.

In a recent discussion on sohu.com, she said her aim is to better prevent AIDS and other STDs among sex workers.