Corinna-Barbara Francis, China researcher at Amnesty International, said that abolishing or significantly reforming re-education through labor would prove daunting because it provides the police an easy way to deal with perceived troublemakers, but also because it can be lucrative for those who work within a sprawling system that includes more than 300 camps. In addition to the profits earned from the inmate labor, prison employees often solicit bribes for early release, or for better treatment, from the families of those incarcerated. “Given the serious money being made in these places, the economic incentive to keep the system going is really powerful,” she said.

During labor shortages, inmates say Masanjia officials simply buy small-time offenders from other cities on a sliding scale that begins at 800 renminbi, or about $130, for six months of labor. They include people like Zhang Ling, a 25-year-old from the eastern coastal city of Dalian who said she was among a group of 50 young women rounded up by the police last May during a crackdown on illegal pyramid sales schemes and then sold to Masanjia. While there, she sewed buttons on military uniforms but was released 10 months early after a brother paid for her release.

Masanjia officials did not respond to faxes and phone calls requesting an interview. Approached one recent afternoon, a half-dozen guards on a cigarette break outside the women’s work camp refused to answer any questions. One guard, however, made a point of correcting the way a question was phrased. “There are no prisoners here,” she said sternly. “They are all students.”

Sears Holdings, the owner of Kmart, declined to make an executive available for an interview. But in a brief statement, a company spokesman, Howard Riefs, said an internal investigation prompted by the discovery of the letter uncovered no violations of company rules that bar the use of forced labor. He declined to provide the name of the Chinese factory that produced the item, a $29.99 set of Halloween decorations called “Totally Ghoul” that include plastic spiders, synthetic cobwebs and a “bloody cloth.”

Although he was released from Masanjia in 2010, Mr. Zhang, the man who said he wrote the letter, has vivid memories of producing the plastic foam headstones, which were made to look old by painting them with a sponge. “It was an especially difficult task,” he said. “If the results were not to the liking of the guards, they would make us do them again.” He estimated that inmates produced at least 1,000 headstones during the year he worked on them.

His letter-writing subterfuge was complicated and risky. Barred from having pens and paper, Mr. Zhang said he stole a set from a desk one day while cleaning a prison office. He worked while his cellmates slept, he said, taking care not to wake those inmates — often drug addicts or convicted thieves — whose job it was to keep the others in line. He would roll up the letter and hide it inside the hollow steel bars of his bunk bed, he said.