I don't think this can really be a complete description of the situation. You can't stop smuggling as a phenomenon, because you can't oversee everything that happens everywhere. So, as much as you might wish it would, the law doesn't really apply to random smugglers.

But by the time you're one of the 100 richest men in China, the law certainly does apply to you. A ban on trade that's "less than 100% effective" is more than enough to stop someone from doing so much trade that they become personally more powerful than the court, as long as "less than 100%" still means "more than 0%".