Sadly the child beggars are controlled by gangs.  

The gangs pay off the cops so their beggars aren't bothered and complaints are ignored.

There are also very few laws protecting children here (ones that are enforced anyway).

The only thing that we can really do is (as mean as this sounds) is to not give them any money.  If the gangs learn that they can't make a profit from these kids (many of whom are kidnap victims) then they will stop using them.  But since that is unlikely to happen, then it will just continue until the Chinese people as a whole say enough is enough.

Jesus, that's the saddest thing I think I've ever heard. I'm so incredibly happy that I've never run into anything like this. 

the police are too busy monitoring foreigners use of gps. 

"grunt ... why you bookmark burger joint?" "grunt.. why you bookmark pyros?" 

"grunt ... you guilty of mapping, give me 30krmb"

 The cops already know about it, so there is nothing you can do.Unfortunately those kids may starve to death if they did not beg. The gangs might do something even worse than let them go hungry, if they don't get any money.

 It is a different country and culture. I would bet that five year olds have been begging in China for thousands of years. If you were to take a video and get it to the Oprah Winfrey Show some external pressure may fall on the local police. You  should try that.

 If you do send a video to her, please let me know how it turns out.

  The least anyone can do is to be angry and not become complacent about such things. When people give in they become party to such injustice.

Sadly as it has already been mentioned this is China. It is true many children are bought,  kidnapped victims, or abandoned. Thy are controlled by the gangs who often and always watch your behavior from near by. Once they observe anyone handing over money they wil approach the child once you have walked away, to retrieve the money. Children are often given flowers or trinkets to sell, and often they grab hold of the legs pleading for money. This is because if they are not seen to work or beg hard enough they are beaten and refused food. No money no food. it's that simple. Police take no notice of these goings on, as they are receiving payments to  turn an blind eyes. It is harsh but as already mentioned it is best not to give. Remember if you give then you are contributing to their exploitation. Sad but this is China, and in China anything goes. And those who care can do nothng.

There seems to be a lot of "thumbs down" in this particular rubric but nonetheless,

what most of the posters have written above is very, very, very sadly true.

This is common in Cambodia, Philippines, Thailand, India, Sri Lanka, Russia, Romania, South America, particularly in Brazil. Just a few of the countries I can remember of. I traveled in mostly all poor Asian countries and yes, that's a common problem. 

I share the same solution: never handle money to the kids. Never, ever! Buy them food or clothes if you have time. But money not at all. Don't buy them expensive clothes or shoes or they will be taken and resold for money. Think of how better your help it can be so uninteresting that it cannot be taken from them.