Corruption in China
Encyclopedia
The People's Republic of China
suffers from widespread corruption
. For 2010, China was ranked 78 of 179 countries in Transparency International's
Corruption Perceptions Index
, ranking slightly above fellow BRIC
nations India
and Russia
, but below Brazil
and most developed countries. Means of corruption include graft, bribery, embezzlement, backdoor deals, nepotism, patronage, and statistical falsification.
Cadre corruption in post-1949 China lies in the "organizational involution" of the ruling party, including the Chinese Communist Party's policies, institutions, norms, and failure to adapt to a changing environment in the post-Mao era caused by the market liberalization reforms initiated by Deng Xiaoping
. Like other socialist economies that have gone through monumental transition, such as post-Soviet Eastern Europe
and Central Asia, post-Mao China has experienced unprecedented levels of corruption, making corruption one of the major hindrances to the PRC's social and economic development.
Public surveys on the mainland since the late 1980s have shown that it is among the top concerns of the general public. According to Yan Sun, Associate Professor of Political Science at the City University of New York
, it was corruption, rather than democracy as such, that lay at the root of the social dissatisfaction that led to the Tiananmen protest movement of 1989. Corruption undermines the legitimacy of the CCP, adds to economic inequality, undermines the environment, and fuels social unrest.
Since then, corruption has not slowed down as a result of greater economic freedom, but instead has grown more entrenched and severe in its character and scope. In popular perception, there are more dishonest CCP officials than honest ones, a reversal of the views held in the first decade of reform of the 1980s. China specialist Minxin Pei argues that failure to contain widespread corruption is among the most serious threats to China's future economic and political stability. Bribery, kickbacks, theft, and misspending of public funds costs at least three percent of GDP.
"government of the law". Profit (li) was despised as preoccupation of the base people, while the true Confucians were supposed to be guided in their actions by the moral principle of justice (yi). Thus, all relations were based solely on mutual trust and propriety. As a matter of course, this kind of moral uprightness could be developed only among a minority. The famous attempt of Wang Anshi
to institutionalize the monetary relations of the state, thus reducing corruption, were met with sharp criticism by the Confucian elite. As a result, corruption continued to be widespread both in the court (Wei Zhongxian
, Heshen
) and among the local elites, and became one of the targets for criticism in the novel Jin Ping Mei
. Another kind of corruption came about in Tang
China, developed in connection with the imperial examination system
.
, the Chinese Nationalist Party, is often credited as being an important component in the defeat of the KMT by the Communist
People's Liberation Army
. Though the Nationalist Army was initially better equipped and had superior numbers, the KMT's rampant corruption damaged its popularity, limited its support base, and helped the communists in their propaganda war.
See History of the Republic of China
, and Black gold (politics)
for more on these topics.
Official deviance and corruption have taken place at both the individual and unit level since the founding of the PRC. Initially the practices had much to do with the danwei system, an outgrowth of communist wartime organs. In the PRC the reforms of Deng Xiaoping were much criticized for making corruption the price of economic development. Corruption during Mao's
reign also existed, however.
Emergence of the private sector inside the state economy in post-Mao China has tempted CCP members to misuse their power in government posts; the powerful economic levers in the hands of the elite has propelled the sons of some party officials to the most profitable positions. For this, the CCP has been called the "princelings' party" (taizidang), a reference to familiar patterns of corruption in some periods of Imperial China. Attacking corruption in the Party was one of the forces behind the Tiananmen protests of 1989.
In 2010, in a rare move due to its perceived impact on stability, Li Jinhua, vice-chairman of the national committee of the Chinese People’s Political Consultative Conference and former long-serving auditor general of the National Audit Office, fired a warning shot in the People's Daily, calling for better legal structures and greater supervision over the business dealings of officials and their children. He said the rapidly growing wealth of Communist officials’ children and family members "is what the public is most dissatisfied about".
The politically unchallenged regime in China creates opportunities for cadres to exploit and control the rapid growth of economic opportunities; and while incentives to corruption grow, effective countervailing forces are absent.
Both structural and non-structural corruption has been prevalent in China. Non-structural corruption exists around the world, and refers to all activities that can be clearly defined as "illegal" or "criminal," mainly including different forms of graft: embezzlement, extortion, bribery etc. Structural corruption arises from particular economic and political structures; this form is difficult to root out without a change of the broader system.
Weak state institutions are blamed for worsening corruption in reform-era China. New Left scholars on China criticise the government for apparent "blind faith" in the market, and especially for its erosion of authority and loss of control of local agencies and agents since 1992. Others also see strong links between institutional decline and rising corruption. Corruption in China results from the Party-State's inability to maintain a disciplined and effective administrative corps, according to Lü Xiaobo, Assistant Professor of Political Science at Barnard College
. The Chinese reform-era state has also been an enabling factor, since state agencies have been granted regulatory power without institutional constraints, allowing them to tap into new opportunities to seek profits from the rapid growth in businesses and the economy. This takes place at both the departmental and individual level. Corruption here is part of the dilemma faced by any reforming socialist state, where the state needs to play an active role in creating and regulating markets, while at the same time its own intervention places extra burdens on administrative budgets. Instead of being able to reduce the size of its bureaucratic machinery (and therefore opportunities for corruption), it is instead pressed to expand further. Officials then cash in on the regulatory power by "seeking rents."
’s Development Research Center asked 4,586 business executives (87 percent in nonstate firms) to rate their local officials in terms of integrity. Almost one-quarter said that their local officials were “bad”; 12 percent said they were “very bad.”
In a commercial environment, corruption may be prevalent because many employees aren't loyal to their employers, seeing themselves as "free-agent entrepreneurs" first and foremost. They use their employers as a way to make money, both for themselves and for their "guanxi
social-circle network." The imperative of maintaining this social circle of benefits is seen as a primary goal for many involved in corruption.
Official corruption is among the populace's greatest gripes against the regime. One folk saying vividly illustrates how the public sees the issue, according to Yan Sun: "If the Party executes every official for corruption, it will overdo a little; but if the Party executes every other official for corruption, it cannot go wrong." In contemporary China, bribe taking has become so entrenched that one party secretary in a poor county received repeated death threats for rejecting over 600,000 Renminbi
in bribes during his tenure. In 1994 in another area officially designated "impoverished," a delegation of the UN Food and Agriculture Organization arrived for a conference on development, but upon seeing rows of imported luxury cars outside the conference site asked the local officials "Are you really poor?" A rare online opinion poll in 2010 by the People’s Daily found that 91% of respondents believe all rich families in China have political backgrounds.
Graft is the most common and refers to bribery, illicit kickbacks, embezzlement, and theft of public funds. Graft involves something of value given to, and accepted by, public officials for dishonest or illegal purposes. It include officials spending fraudulently or using public funds for their own benefit.
Rent-seeking refers to all forms of corrupt behaviour by people with monopolistic power. Public officials, through granting a license or monopoly to their clients, get "rents"—additional earnings as a result of a restricted market. Rent-seeking happens when officials grant rents to those in their favor. This is akin to cronyism
. In the Chinese case, public officials are both rent-generators and rent-seekers, both making rent opportunities for others and seeking such opportunities to benefit themselves. This may include profiteering by officials or official firms, extortion in the form of illicit impositions, fees, and other charges.
Prebendalism refers to when incumbents of public office get privileges and perquisites through that office. Controlling an office entitles the holder to rents or payments for real or fake activities, and organizations are turned from places of work into "resource banks" where individuals and groups pursue their own interests. Prebendal corruption doesn't necessarily need to be about monetary gain, but may include usurpation of official privilege, backdoor deals, clientelism, cronyism, nepotism.
Corruption in the PRC has developed in two major ways. In the first mode, corruption is in the form of ostensibly legal official expenditure, but is actually wasteful and directed toward private benefits. For example, the increasing number of local governments building massive administrative office buildings that resemble luxurious mansions. At the same time, many corrupt local officials have turned their jurisdictions into virtual “mafia states,” where they collude with criminal elements and unsavory businessmen in illegal activities.
While the state and its bureaucrats are major players in the reform-era economy, new interests and concentrations of economic have been created, without legitimate channels between administrators and entrepreneurs. A lack of regulation and supervision has meant these roles are not clearly demarcated (Lü Xiaobo in his text titles one section "From Apparatchiks to Entrepreneurchiks"). Illicit guandao enterprises formed by networks of bureaucrats and entrepreneurs are allowed to grow, operating behind a facade of a government agency or state-owned enterprise, in a realm neither fully public nor private.
The PLA has also become a major economic player, and participant in large and small scale corruption at the same time. Inconsistent tax policy, and a politicised and poorly organised banking system, create ample opportunities for favouritism, kickbacks, and "outright theft," according to Michael Johnston, Professor of Political Science at Colgate University in Hamilton, New York.
Corruption has also taken the form of collusion between CCP officials and criminal gangs. Often hidden inside legitimate businesses, gangs had infiltrated public offices and worked closely with the police. The Telegraph quoted an employee of a state company saying: "In fact, the police stations in Chongqing were actually the centre of the prostitution, gambling and drugs rackets. They would detain gangsters from time to time, and sometimes send them to prison, but the gangsters described it as going away for a holiday. The police and the mafia were buddies." In some cases, innocents were hacked to death and dismembered by roaming gangs whose presence was allowed by regime officials, according to the Telegraph.
China's housing boom, and the shift of central government policy towards social housing, are providing officials to siphon off properties for personal gain. The Financial Times cites a number of public scandals involving local officials in 2010: for example, in province, eastern China, a complex of 3,500 apartments designated as social housing in Rizhao, Shandong, was sold to local officials at prices 30-50 per cent below market values. It said in Meixian, Sha’anxi, around 80 per cent of the city’s first social housing development, called Urban Beautiful Scenery, went to local officials. In Xinzhou, Shanxi, a new complex of 1,578 apartments on the local government’s list of designated social housing was almost entirely reserved for local officials, many were 'flipped' for tidy profits even before construction was completed. Jones Lang LaSalle said that transparency about the plans for affordable housing was severely lacking.
Others, including local officials, play down the negative impacts of corruption, and local cadres frown on anticorruption efforts for three reasons: a preoccupation with rooting out corruption may lead to cautiousness about new practices; corruption may act as a "lubricant" to "loosen up" the bureaucracy and facilitate commercial exchanges; and thirdly, corruption is a necessary trade-off and inevitable part of the process of reform and opening up. They argue that the destructiveness of corruption in the Chinese context helps transfer or reallocate power from officials, perhaps even enabling the rise of a "new system" and acting as a driving force for reform.
Nevertheless, the deleterious effects of corruption were documented in detail in Minxin Pei's report. The amount of money stolen through corruption scandals has risen exponentially since the 1980s, and corruption in China is now more concentrated in the sectors the state is heavily involved with. These include infrastructure projects, real estate, government procurement, and financial services. The lack of a competitive political process means these are high-risk areas for fraud, theft, and bribery; Pei estimates the cost of corruption could be up to $86 billion per year.
Corruption in China also harms Western business interests, in particular foreign investors. They risk human rights, environmental, and financial liabilities, at the same time squaring off against rivals who engage in illegal practices to win business.
Long term, corruption has potentially "explosive consequences," including widening income inequalities within cities and between city and countryside, and creating a new, highly-visible class of "socialist millionaires," which further fuels resentment from the citizenry.
Ordinary Chinese are sometimes the victims in official corruption, as in the case of Hewan village in Jiangsu province, where 200 thugs were hired to attack local farmers and force them off their land so Party bosses could build a petrochemical plant. Sun Xiaojun, the party chief of Hewan village, was later arrested. One farmer died. Officials themselves are increasingly victims of official corruption when they target each other out of jealousy, hunger for promotion: there have been high-profile cases of mainland bureaucrats employing hit men or launching acid attacks on rivals. In August 2009, a former director of the Communications Bureau in Hegang, Heilongjiang, who hired hitmen to kill his successor, supposedly because of the latter's ingratitude was given the death penalty.
In 2004, the CCP devised strict regulations on officials assuming posts in business and enterprise. The Central Committee for Discipline Inspection and the Central Organisation Department issued a joint circular instructing Party committees, governments and related departments at all levels not to give approval for Party and government officials to take up concurrent posts in enterprises.
Such measures are largely ineffective, however, due to the insufficient enforcement of the relevant laws. Further, because the Central Commission of Discipline Inspection largely operates in secrecy, it is unclear to researchers how allegedly corrupt officials are disciplined and punished. The odds for a corrupt official to end up in prison are less than three percent, making corruption a high-return, low risk activity. This leniency of punishment has been one of the main reasons corruption is such a serious problem in China.
While corruption has grown in scope and complexity, anti-corruption policies, on the other hand, have not changed much. Communist-style mass campaigns with anti-corruption slogans, moral exhortations, and prominently-displayed miscreants, are still a key part of official policy, much as they were in the 1950s.
In 2009, according to internal Party reports, there were 106,000 officials found guilty of corruption, an increase of 2.5 percent on the previous year. The number of officials caught embezzling more than one million yuan (US$146,000) went up by 19 percent over the year. With no independent oversight like NGOs or free media, corruption has flourished.
These efforts are punctuated by an occasional harsh prison term for major offenders, or even executions. But rules and values for business and bureaucratic conduct are in flux, sometimes contradictory, and “deeply politicized.” In many countries systematic anti-corruption measures include independent trade and professional associations, which help limit corruption by promulgating codes of ethics and imposing quick penalties, watchdog groups like NGOs, and a free media. In China, these measures do not exist as a result of the CCP’s means of rule.
Thus, while Party disciplinary organs and prosecutorial agencies produce impressive statistics on corruption complaints received from the public, few citizens or observers believe corruption is being systematically addressed.
There are also limits to how far anti-corruption measures will go. For example, when Hu Jintao
's son was implicated in a corruption investigation in Namibia
, Chinese Internet portals and Party-controlled media were ordered not to report on it.
At the same time, local leaders engage in "corruption protectionism," as coined by the head of the Hunan
provincial Party Discipline Inspection Commission; apparatchiks thwart corruption investigations against the staff of their own agencies, allowing them to escape punishment. In some cases this has impelled high-ranking officials to form special investigative groups with approval from the central government to avoid local resistance and enforce cooperation. However, since in China vertical and horizontal leadership structures often run at odds with one another, CCP anti-corruption agencies find it hard to investigate graft at the lower levels. The goal of effectively controlling corruption thus remains elusive to the ruling Party.
In many such cases, the origins of anti-corruption measures are a mystery. When Chen Liangyu
was ousted, analysts said it was because he lost a power struggle with leaders in Beijing. Chen was Shanghai's party secretary and member of the powerful Politburo. In 2010 a re-release of the Communist Party of China 52 code of ethics
was published.
Prominent individuals implicated in corruption in China include: Wang Shouxin
, Yang Bin
, Chen Liangyu
, Qiu Xiaohua (the nation's chief statistician, who was sacked and arrested in connection with a pension-fund scandal), Zheng Xiaoyu
, Lai Changxing
, Lan Fu
, Xiao Zuoxin
, Ye Zheyun, Chen Xitong
, Tian Fengshan
, Zhu Junyi
.
Researchers
Authors who have written about corruption in China include: Liu Binyan
, Robert Chua
, Wang Yao, Li Zhi
, Lü Gengsong
, Xi Jinping
, Jiang Weiping
.
Whistleblowers
The strict controls placed on the media by the Chinese government limit the discovery and reporting of corruption in China. Nevertheless, there have been cases of whistleblowers publicising corruption in China.
See Media of the People's Republic of China
for a discussion on the media in China, including topics such as censorship and controls.
Anti-corruption organizations
Cases
Society
International corruption index
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
suffers from widespread corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
. For 2010, China was ranked 78 of 179 countries in Transparency International's
Transparency International
Transparency International is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. It publishes an annual Corruption Perceptions Index, a comparative listing of corruption worldwide...
Corruption Perceptions Index
Corruption Perceptions Index
Since 1995, Transparency International publishes the Corruption Perceptions Index annually ranking countries "by their perceived levels of corruption, as determined by expert assessments and opinion surveys." The CPI generally defines corruption as "the misuse of public power for private...
, ranking slightly above fellow BRIC
BRIC
In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development...
nations India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
and Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, but below Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
and most developed countries. Means of corruption include graft, bribery, embezzlement, backdoor deals, nepotism, patronage, and statistical falsification.
Cadre corruption in post-1949 China lies in the "organizational involution" of the ruling party, including the Chinese Communist Party's policies, institutions, norms, and failure to adapt to a changing environment in the post-Mao era caused by the market liberalization reforms initiated by Deng Xiaoping
Deng Xiaoping
Deng Xiaoping was a Chinese politician, statesman, and diplomat. As leader of the Communist Party of China, Deng was a reformer who led China towards a market economy...
. Like other socialist economies that have gone through monumental transition, such as post-Soviet Eastern Europe
Eastern bloc
The term Eastern Bloc or Communist Bloc refers to the former communist states of Eastern and Central Europe, generally the Soviet Union and the countries of the Warsaw Pact...
and Central Asia, post-Mao China has experienced unprecedented levels of corruption, making corruption one of the major hindrances to the PRC's social and economic development.
Public surveys on the mainland since the late 1980s have shown that it is among the top concerns of the general public. According to Yan Sun, Associate Professor of Political Science at the City University of New York
City University of New York
The City University of New York is the public university system of New York City, with its administrative offices in Yorkville in Manhattan. It is the largest urban university in the United States, consisting of 23 institutions: 11 senior colleges, six community colleges, the William E...
, it was corruption, rather than democracy as such, that lay at the root of the social dissatisfaction that led to the Tiananmen protest movement of 1989. Corruption undermines the legitimacy of the CCP, adds to economic inequality, undermines the environment, and fuels social unrest.
Since then, corruption has not slowed down as a result of greater economic freedom, but instead has grown more entrenched and severe in its character and scope. In popular perception, there are more dishonest CCP officials than honest ones, a reversal of the views held in the first decade of reform of the 1980s. China specialist Minxin Pei argues that failure to contain widespread corruption is among the most serious threats to China's future economic and political stability. Bribery, kickbacks, theft, and misspending of public funds costs at least three percent of GDP.
Imperial China
The spread of corruption in traditional China is often connected to the Confucian concept of renzhi, "government of the people" as opposed to the legalistLegalism (Chinese philosophy)
In Chinese history, Legalism was one of the main philosophic currents during the Warring States Period, although the term itself was invented in the Han Dynasty and thus does not refer to an organized 'school' of thought....
"government of the law". Profit (li) was despised as preoccupation of the base people, while the true Confucians were supposed to be guided in their actions by the moral principle of justice (yi). Thus, all relations were based solely on mutual trust and propriety. As a matter of course, this kind of moral uprightness could be developed only among a minority. The famous attempt of Wang Anshi
Wang Anshi
Wang Anshi was a Chinese economist, statesman, chancellor and poet of the Song Dynasty who attempted controversial, major socioeconomic reforms...
to institutionalize the monetary relations of the state, thus reducing corruption, were met with sharp criticism by the Confucian elite. As a result, corruption continued to be widespread both in the court (Wei Zhongxian
Wei Zhongxian
Wei Zhongxian is considered by most historians as the most powerful and notorious eunuch in Chinese history. Originally a hoodlum and gambler, his initial name was Wei Si . He took the step of becoming a eunuch and entering palace service to escape from his creditors, taking the name Li Jinzhong...
, Heshen
Heshen
Heshen or Hešen , from the Manchu Niohuru clan, was a Manchu official of the Qing Dynasty, a favourite of the Qianlong Emperor. Born Shanbao , his given name was later changed to Heshen. His courtesy name was Zhizhai . He was a member of the Plain Red Banner, as well as one of the most corrupt...
) and among the local elites, and became one of the targets for criticism in the novel Jin Ping Mei
Jin Ping Mei
Jin Ping Mei, or The Plum in the Golden Vase is a Chinese naturalistic novel composed in the vernacular during the late Ming Dynasty. The author was Lanling Xiaoxiao Sheng , "The Scoffing Scholar of Lanling", a clear pseudonym, and his identity is otherwise unknown...
. Another kind of corruption came about in Tang
Tang Dynasty
The Tang Dynasty was an imperial dynasty of China preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire...
China, developed in connection with the imperial examination system
Imperial examination
The Imperial examination was an examination system in Imperial China designed to select the best administrative officials for the state's bureaucracy. This system had a huge influence on both society and culture in Imperial China and was directly responsible for the creation of a class of...
.
Republican era
The widespread corruption of the KuomintangKuomintang
The Kuomintang of China , sometimes romanized as Guomindang via the Pinyin transcription system or GMD for short, and translated as the Chinese Nationalist Party is a founding and ruling political party of the Republic of China . Its guiding ideology is the Three Principles of the People, espoused...
, the Chinese Nationalist Party, is often credited as being an important component in the defeat of the KMT by the Communist
Communist Party of China
The Communist Party of China , also known as the Chinese Communist Party , is the founding and ruling political party of the People's Republic of China...
People's Liberation Army
People's Liberation Army
The People's Liberation Army is the unified military organization of all land, sea, strategic missile and air forces of the People's Republic of China. The PLA was established on August 1, 1927 — celebrated annually as "PLA Day" — as the military arm of the Communist Party of China...
. Though the Nationalist Army was initially better equipped and had superior numbers, the KMT's rampant corruption damaged its popularity, limited its support base, and helped the communists in their propaganda war.
See History of the Republic of China
History of the Republic of China
The History of the Republic of China begins after the Qing Dynasty in 1912, when the formation of the Republic of China put an end to over two thousand years of Imperial rule. The Qing Dynasty, also known as the Manchu Dynasty, ruled from 1644 to 1912...
, and Black gold (politics)
Black gold (politics)
Black gold is a term used in the Republic of China to refer to political corruption. The term refers to the obtaining of money through a dark, secretive, and corrupt method ....
for more on these topics.
In the PRC
Getting high quality, reliable, and standardised survey data on the severity of corruption in the PRC is enormously difficult. However, a variety of sources can still be tapped, which "present a sobering picture," according to Minxin Pei.Official deviance and corruption have taken place at both the individual and unit level since the founding of the PRC. Initially the practices had much to do with the danwei system, an outgrowth of communist wartime organs. In the PRC the reforms of Deng Xiaoping were much criticized for making corruption the price of economic development. Corruption during Mao's
Mao Zedong
Mao Zedong, also transliterated as Mao Tse-tung , and commonly referred to as Chairman Mao , was a Chinese Communist revolutionary, guerrilla warfare strategist, Marxist political philosopher, and leader of the Chinese Revolution...
reign also existed, however.
Emergence of the private sector inside the state economy in post-Mao China has tempted CCP members to misuse their power in government posts; the powerful economic levers in the hands of the elite has propelled the sons of some party officials to the most profitable positions. For this, the CCP has been called the "princelings' party" (taizidang), a reference to familiar patterns of corruption in some periods of Imperial China. Attacking corruption in the Party was one of the forces behind the Tiananmen protests of 1989.
In 2010, in a rare move due to its perceived impact on stability, Li Jinhua, vice-chairman of the national committee of the Chinese People’s Political Consultative Conference and former long-serving auditor general of the National Audit Office, fired a warning shot in the People's Daily, calling for better legal structures and greater supervision over the business dealings of officials and their children. He said the rapidly growing wealth of Communist officials’ children and family members "is what the public is most dissatisfied about".
The politically unchallenged regime in China creates opportunities for cadres to exploit and control the rapid growth of economic opportunities; and while incentives to corruption grow, effective countervailing forces are absent.
Both structural and non-structural corruption has been prevalent in China. Non-structural corruption exists around the world, and refers to all activities that can be clearly defined as "illegal" or "criminal," mainly including different forms of graft: embezzlement, extortion, bribery etc. Structural corruption arises from particular economic and political structures; this form is difficult to root out without a change of the broader system.
Weak state institutions are blamed for worsening corruption in reform-era China. New Left scholars on China criticise the government for apparent "blind faith" in the market, and especially for its erosion of authority and loss of control of local agencies and agents since 1992. Others also see strong links between institutional decline and rising corruption. Corruption in China results from the Party-State's inability to maintain a disciplined and effective administrative corps, according to Lü Xiaobo, Assistant Professor of Political Science at Barnard College
Barnard College
Barnard College is a private women's liberal arts college and a member of the Seven Sisters. Founded in 1889, Barnard has been affiliated with Columbia University since 1900. The campus stretches along Broadway between 116th and 120th Streets in the Morningside Heights neighborhood in the borough...
. The Chinese reform-era state has also been an enabling factor, since state agencies have been granted regulatory power without institutional constraints, allowing them to tap into new opportunities to seek profits from the rapid growth in businesses and the economy. This takes place at both the departmental and individual level. Corruption here is part of the dilemma faced by any reforming socialist state, where the state needs to play an active role in creating and regulating markets, while at the same time its own intervention places extra burdens on administrative budgets. Instead of being able to reduce the size of its bureaucratic machinery (and therefore opportunities for corruption), it is instead pressed to expand further. Officials then cash in on the regulatory power by "seeking rents."
Public perceptions
Opinion surveys of Party officials and Chinese citizens over recent years set identify corruption as one of the public's top concerns. Every year researchers at the Central Party School, the CCP organ that trains senior and midlevel officials, survey over 100 officials at the school. Between 1999 to 2004 respondents ranked corruption as either the most serious or second most serious social problem. Similarly, in late 2006 the State CouncilState Council
State Council may refer to:In politics:* State Council of the Soviet Union, was the chief administrative authority of the Union of Soviet Socialist Republics...
’s Development Research Center asked 4,586 business executives (87 percent in nonstate firms) to rate their local officials in terms of integrity. Almost one-quarter said that their local officials were “bad”; 12 percent said they were “very bad.”
In a commercial environment, corruption may be prevalent because many employees aren't loyal to their employers, seeing themselves as "free-agent entrepreneurs" first and foremost. They use their employers as a way to make money, both for themselves and for their "guanxi
Guanxi
Guanxi describes the basic dynamic in personalized networks of influence, and is a central idea in Chinese society. In Western media, the pinyin romanization of this Chinese word is becoming more widely used instead of the two common translations—"connections" and "relationships"—as neither of...
social-circle network." The imperative of maintaining this social circle of benefits is seen as a primary goal for many involved in corruption.
Official corruption is among the populace's greatest gripes against the regime. One folk saying vividly illustrates how the public sees the issue, according to Yan Sun: "If the Party executes every official for corruption, it will overdo a little; but if the Party executes every other official for corruption, it cannot go wrong." In contemporary China, bribe taking has become so entrenched that one party secretary in a poor county received repeated death threats for rejecting over 600,000 Renminbi
Renminbi
The Renminbi is the official currency of the People's Republic of China . Renminbi is legal tender in mainland China, but not in Hong Kong or Macau. It is issued by the People's Bank of China, the monetary authority of the PRC...
in bribes during his tenure. In 1994 in another area officially designated "impoverished," a delegation of the UN Food and Agriculture Organization arrived for a conference on development, but upon seeing rows of imported luxury cars outside the conference site asked the local officials "Are you really poor?" A rare online opinion poll in 2010 by the People’s Daily found that 91% of respondents believe all rich families in China have political backgrounds.
Means
Broadly defined, three types of corruption are common in China: graft, rent-seeking, and prebendalism.Graft is the most common and refers to bribery, illicit kickbacks, embezzlement, and theft of public funds. Graft involves something of value given to, and accepted by, public officials for dishonest or illegal purposes. It include officials spending fraudulently or using public funds for their own benefit.
Rent-seeking refers to all forms of corrupt behaviour by people with monopolistic power. Public officials, through granting a license or monopoly to their clients, get "rents"—additional earnings as a result of a restricted market. Rent-seeking happens when officials grant rents to those in their favor. This is akin to cronyism
Cronyism
Cronyism is partiality to long-standing friends, especially by appointing them to positions of authority, regardless of their qualifications. Hence, cronyism is contrary in practice and principle to meritocracy....
. In the Chinese case, public officials are both rent-generators and rent-seekers, both making rent opportunities for others and seeking such opportunities to benefit themselves. This may include profiteering by officials or official firms, extortion in the form of illicit impositions, fees, and other charges.
Prebendalism refers to when incumbents of public office get privileges and perquisites through that office. Controlling an office entitles the holder to rents or payments for real or fake activities, and organizations are turned from places of work into "resource banks" where individuals and groups pursue their own interests. Prebendal corruption doesn't necessarily need to be about monetary gain, but may include usurpation of official privilege, backdoor deals, clientelism, cronyism, nepotism.
Corruption in the PRC has developed in two major ways. In the first mode, corruption is in the form of ostensibly legal official expenditure, but is actually wasteful and directed toward private benefits. For example, the increasing number of local governments building massive administrative office buildings that resemble luxurious mansions. At the same time, many corrupt local officials have turned their jurisdictions into virtual “mafia states,” where they collude with criminal elements and unsavory businessmen in illegal activities.
While the state and its bureaucrats are major players in the reform-era economy, new interests and concentrations of economic have been created, without legitimate channels between administrators and entrepreneurs. A lack of regulation and supervision has meant these roles are not clearly demarcated (Lü Xiaobo in his text titles one section "From Apparatchiks to Entrepreneurchiks"). Illicit guandao enterprises formed by networks of bureaucrats and entrepreneurs are allowed to grow, operating behind a facade of a government agency or state-owned enterprise, in a realm neither fully public nor private.
The PLA has also become a major economic player, and participant in large and small scale corruption at the same time. Inconsistent tax policy, and a politicised and poorly organised banking system, create ample opportunities for favouritism, kickbacks, and "outright theft," according to Michael Johnston, Professor of Political Science at Colgate University in Hamilton, New York.
Corruption has also taken the form of collusion between CCP officials and criminal gangs. Often hidden inside legitimate businesses, gangs had infiltrated public offices and worked closely with the police. The Telegraph quoted an employee of a state company saying: "In fact, the police stations in Chongqing were actually the centre of the prostitution, gambling and drugs rackets. They would detain gangsters from time to time, and sometimes send them to prison, but the gangsters described it as going away for a holiday. The police and the mafia were buddies." In some cases, innocents were hacked to death and dismembered by roaming gangs whose presence was allowed by regime officials, according to the Telegraph.
China's housing boom, and the shift of central government policy towards social housing, are providing officials to siphon off properties for personal gain. The Financial Times cites a number of public scandals involving local officials in 2010: for example, in province, eastern China, a complex of 3,500 apartments designated as social housing in Rizhao, Shandong, was sold to local officials at prices 30-50 per cent below market values. It said in Meixian, Sha’anxi, around 80 per cent of the city’s first social housing development, called Urban Beautiful Scenery, went to local officials. In Xinzhou, Shanxi, a new complex of 1,578 apartments on the local government’s list of designated social housing was almost entirely reserved for local officials, many were 'flipped' for tidy profits even before construction was completed. Jones Lang LaSalle said that transparency about the plans for affordable housing was severely lacking.
Effects
Whether the effects of corruption in China are solely positive or negative is a subject of hot debate. Corruption favors the most connected and unscrupulous, rather than the efficient, and also creates entry barriers in the market for those without such connections. Favors are sought for inefficient subsidies, monopoly benefits, or regulatory oversight, rather than productive activity. Bribes also lead to a misdirection of resources into wasteful or poor-quality projects. Further, since corrupt payments are usually done secrecy, they are more likely to be used in the same way, driving the proceeds of illegal transactions into foreign bank accounts. Such capital flight costs national growth. Centralised corruption also carries with it the same defects, according to Yan. Rent seeking, for example, is costly to growth because it prevents innovation. Rent seeking activities are also self-sustaining, since such activity makes it seem more attractive compared to productive activity. Corruption is never a better option to honest public policy, Yan Sun argues, and it distorts and retards development.Others, including local officials, play down the negative impacts of corruption, and local cadres frown on anticorruption efforts for three reasons: a preoccupation with rooting out corruption may lead to cautiousness about new practices; corruption may act as a "lubricant" to "loosen up" the bureaucracy and facilitate commercial exchanges; and thirdly, corruption is a necessary trade-off and inevitable part of the process of reform and opening up. They argue that the destructiveness of corruption in the Chinese context helps transfer or reallocate power from officials, perhaps even enabling the rise of a "new system" and acting as a driving force for reform.
Nevertheless, the deleterious effects of corruption were documented in detail in Minxin Pei's report. The amount of money stolen through corruption scandals has risen exponentially since the 1980s, and corruption in China is now more concentrated in the sectors the state is heavily involved with. These include infrastructure projects, real estate, government procurement, and financial services. The lack of a competitive political process means these are high-risk areas for fraud, theft, and bribery; Pei estimates the cost of corruption could be up to $86 billion per year.
Corruption in China also harms Western business interests, in particular foreign investors. They risk human rights, environmental, and financial liabilities, at the same time squaring off against rivals who engage in illegal practices to win business.
Long term, corruption has potentially "explosive consequences," including widening income inequalities within cities and between city and countryside, and creating a new, highly-visible class of "socialist millionaires," which further fuels resentment from the citizenry.
Ordinary Chinese are sometimes the victims in official corruption, as in the case of Hewan village in Jiangsu province, where 200 thugs were hired to attack local farmers and force them off their land so Party bosses could build a petrochemical plant. Sun Xiaojun, the party chief of Hewan village, was later arrested. One farmer died. Officials themselves are increasingly victims of official corruption when they target each other out of jealousy, hunger for promotion: there have been high-profile cases of mainland bureaucrats employing hit men or launching acid attacks on rivals. In August 2009, a former director of the Communications Bureau in Hegang, Heilongjiang, who hired hitmen to kill his successor, supposedly because of the latter's ingratitude was given the death penalty.
Countermeasures
The CCP has tried a variety of anti-corruption measures, constructing a variety of laws and agencies in an attempt to stamp out corruption.In 2004, the CCP devised strict regulations on officials assuming posts in business and enterprise. The Central Committee for Discipline Inspection and the Central Organisation Department issued a joint circular instructing Party committees, governments and related departments at all levels not to give approval for Party and government officials to take up concurrent posts in enterprises.
Such measures are largely ineffective, however, due to the insufficient enforcement of the relevant laws. Further, because the Central Commission of Discipline Inspection largely operates in secrecy, it is unclear to researchers how allegedly corrupt officials are disciplined and punished. The odds for a corrupt official to end up in prison are less than three percent, making corruption a high-return, low risk activity. This leniency of punishment has been one of the main reasons corruption is such a serious problem in China.
While corruption has grown in scope and complexity, anti-corruption policies, on the other hand, have not changed much. Communist-style mass campaigns with anti-corruption slogans, moral exhortations, and prominently-displayed miscreants, are still a key part of official policy, much as they were in the 1950s.
In 2009, according to internal Party reports, there were 106,000 officials found guilty of corruption, an increase of 2.5 percent on the previous year. The number of officials caught embezzling more than one million yuan (US$146,000) went up by 19 percent over the year. With no independent oversight like NGOs or free media, corruption has flourished.
These efforts are punctuated by an occasional harsh prison term for major offenders, or even executions. But rules and values for business and bureaucratic conduct are in flux, sometimes contradictory, and “deeply politicized.” In many countries systematic anti-corruption measures include independent trade and professional associations, which help limit corruption by promulgating codes of ethics and imposing quick penalties, watchdog groups like NGOs, and a free media. In China, these measures do not exist as a result of the CCP’s means of rule.
Thus, while Party disciplinary organs and prosecutorial agencies produce impressive statistics on corruption complaints received from the public, few citizens or observers believe corruption is being systematically addressed.
There are also limits to how far anti-corruption measures will go. For example, when Hu Jintao
Hu Jintao
Hu Jintao is the current Paramount Leader of the People's Republic of China. He has held the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang...
's son was implicated in a corruption investigation in Namibia
Nuctech
Nuctech is a company created in 1997 as an offshoot of Beijing's Tsinghua University. The company was headed by Hu Haifeng, son of President of the People's Republic of China Hu Jintao until 2008.-History:...
, Chinese Internet portals and Party-controlled media were ordered not to report on it.
At the same time, local leaders engage in "corruption protectionism," as coined by the head of the Hunan
Hunan
' is a province of South-Central China, located to the south of the middle reaches of the Yangtze River and south of Lake Dongting...
provincial Party Discipline Inspection Commission; apparatchiks thwart corruption investigations against the staff of their own agencies, allowing them to escape punishment. In some cases this has impelled high-ranking officials to form special investigative groups with approval from the central government to avoid local resistance and enforce cooperation. However, since in China vertical and horizontal leadership structures often run at odds with one another, CCP anti-corruption agencies find it hard to investigate graft at the lower levels. The goal of effectively controlling corruption thus remains elusive to the ruling Party.
Political incentives for cracking down
Prominent anti-corruption cases in China are often an outgrowth of factional struggles for power in the CCP, as opponents use the "war of corruption" as a weapon against rivals in the Party or corporate world. Often, too, the central leadership's goal in cracking down on corruption is to send a message to those who step over some "unknown acceptable level of graft" or too obviously flaunt its benefits. Another reason is to show an angry public that the Party is doing something about the problem.In many such cases, the origins of anti-corruption measures are a mystery. When Chen Liangyu
Chen Liangyu
Chen Liangyu was a politician of the People's Republic of China from the ruling Communist Party, and the disgraced CPC Shanghai Committee Secretary, or the city's first-in-charge....
was ousted, analysts said it was because he lost a power struggle with leaders in Beijing. Chen was Shanghai's party secretary and member of the powerful Politburo. In 2010 a re-release of the Communist Party of China 52 code of ethics
Communist Party of China 52 code of ethics
The Communist Party of China 52 code of ethics or was issued on February 23, 2010 to fight widespread corruption within the Communist Party of China...
was published.
Individuals
ImplicatedProminent individuals implicated in corruption in China include: Wang Shouxin
Wang Shouxin
Wang Shouxin - a middle-level cadre of the Chinese Communist Party who became known for the biggest corruption scandal of PRC ever known as of 1979.Working in Heilongjiang province, she embezzled at least 536 000 yuan of state property...
, Yang Bin
Yang Bin
Yang Bin is a Chinese-Dutch businessman who was formerly listed as the second richest man in China by Forbes for 2001. He once held assets in the horticulture and real estate industries, owning stakes in the Euro-Asia Agricultural Holdings and Holland Village, China. His fall from grace came in...
, Chen Liangyu
Chen Liangyu
Chen Liangyu was a politician of the People's Republic of China from the ruling Communist Party, and the disgraced CPC Shanghai Committee Secretary, or the city's first-in-charge....
, Qiu Xiaohua (the nation's chief statistician, who was sacked and arrested in connection with a pension-fund scandal), Zheng Xiaoyu
Zheng Xiaoyu
Zheng Xiaoyu was director of the State Food and Drug Administration of the People's Republic of China. He was sentenced to death in the first instance trial at Beijing No.1 Intermediate Court on May 29, 2007...
, Lai Changxing
Lai Changxing
Lai Changxing began as a Chinese businessman and entrepreneur from Jinjiang, Fujian, People's Republic of China. He was the founder and Chairman of the lucrative Yuanhua Group in the Special Economic Zone of Xiamen. At his height he has been credited with converting China from communism to...
, Lan Fu
Lan Fu
Lan Fu is a former deputy mayor of Xiamen Municipality, China. He was convicted in 2000 on corruption charges related to a US$6 billion smuggling racket and is currently serving a life sentence in prison....
, Xiao Zuoxin
Xiao Zuoxin
Xiao Zuoxin is a former mayor of Fuyang, Anhui, China. He and his wife were convicted of corruption on November 29, 2000. He is currently serving life imprisonment. His wife, Zhou Jimei, was sentenced to death....
, Ye Zheyun, Chen Xitong
Chen Xitong
Chen Xitong was a member of the Politburo of the Communist Party of China and the Mayor of Beijing until he was removed from office on charges of corruption in 1995.-Biography:...
, Tian Fengshan
Tian Fengshan
Tian Fengshan is a former Chinese official and was charged for significant corruption.-Biography:He became a member of Communist Party of China in 1970....
, Zhu Junyi
Zhu Junyi
Zhu Junyi was a government official in Shanghai, China. Prior to his arrest during an investigation into corruption in Shanghai in 2006, he had been in charge of the Shanghai Municipal Bureau of Labour and Social Security, Shanghai's municipal pension system.-Biography:Zhu attended the Changle...
.
Researchers
Authors who have written about corruption in China include: Liu Binyan
Liu Binyan
Liu Binyan was a Chinese author and journalist, as well as a political dissident.Many of the events in Liu's life are recounted in his memoir, A Higher Kind of Loyalty.-Early life:...
, Robert Chua
Robert Chua
Robert Chua Wah-Peng was born in Singapore on 20 May 1946.Robert Chua's 46 years television experience spans from Australia, Singapore, Hong Kong to China...
, Wang Yao, Li Zhi
Li Zhi (dissident)
Li Zhi was sentenced to eight years imprisonment in December 2003 in the People's Republic of China for trying to join the Democracy Party of China, which is a banned organization in communist China, and for criticizing corruption...
, Lü Gengsong
Lü Gengsong
Lü Gengsong is a Chinese writer and civil rights activist. He is mostly recognized as the author of the book "Corrupted Officials in China", which appeared in Hong Kong in 2000...
, Xi Jinping
Xi Jinping
Xi Jinping is a high ranking politician of the People's Republic of China. He currently serves as the top-ranking member of the Secretariat of the Communist Party of China, the country's Vice President, Vice-Chairman of the Central Military Commission, President of the Central Party School and the...
, Jiang Weiping
Jiang Weiping
Jiang Weiping is a veteran mainland Chinese journalist known internationally for his arrest by the Communist Party of China in 2001. During his career, he received several awards from local and provincial governments for his journalism and reporting. In 1999, he began publishing a series of...
.
Whistleblowers
The strict controls placed on the media by the Chinese government limit the discovery and reporting of corruption in China. Nevertheless, there have been cases of whistleblowers publicising corruption in China.
See Media of the People's Republic of China
Media of the People's Republic of China
Media of the People's Republic of China primarily consists of television, newspapers, radio, and magazines. Since 2000, the Internet has also emerged as an important communications medium....
for a discussion on the media in China, including topics such as censorship and controls.
See also
- Crime in the People's Republic of ChinaCrime in the People's Republic of ChinaCrime is present in various forms in the People's Republic of China. Common forms of crime include drug trafficking, money laundering, fraud, human trafficking, corruption, black marketeering, and circulation of fake currencies.-History:...
Anti-corruption organizations
- Anti-Corruption and Governance Research CenterAnti-Corruption and Governance Research CenterThe Anti-Corruption and Governance Research Center of Tsinghua University was established in November 2000. It is China's first university-based institute devoted to anti-corruption research....
, School of Public Policy and Management, Tsinghua UniversityTsinghua UniversityTsinghua University , colloquially known in Chinese as Qinghua, is a university in Beijing, China. The school is one of the nine universities of the C9 League. It was established in 1911 under the name "Tsinghua Xuetang" or "Tsinghua College" and was renamed the "Tsinghua School" one year later...
, Beijing - International Association of Anti-Corruption AuthoritiesInternational Association of Anti-Corruption AuthoritiesInternational Association of Anti-Corruption Authorities is a non-governmental organization established as a result of the special meeting held at the UN Office in Vienna on 19–20 April 2006. Its headquarters is in Beijing, China...
(IAACA) in BeijingBeijingBeijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's... - Three-anti/five-anti campaignsThree-anti/five-anti campaignsThe Three-anti Campaign and Five-anti Campaign were reform movements originally issued by Mao Zedong a few years after the founding of the People's Republic of China in an effort to rid Chinese cities of corruption and enemies of the state...
(1951/1952) - Central Commission for Discipline Inspection of the Communist Party of China
- Ministry of Supervision of the People's Republic of ChinaMinistry of Supervision of the People's Republic of ChinaThe Ministry of Supervision of the People's Republic of China is responsible for maintaining an efficient, disciplined, clean and honest government, and educate public servants about their duty and discipline...
- National Bureau of Corruption Prevention (NBCP) (website) (Chinese Wikipedia)
- Independent Commission Against Corruption (Hong Kong)Independent Commission Against Corruption (Hong Kong)The Independent Commission Against Corruption of Hong Kong was established by Governor Murray MacLehose on 15 February 1974, when Hong Kong was under British rule. Its main aim was to clean up endemic corruption in the many departments of the Hong Kong Government through law enforcement,...
- Commission Against Corruption (Macau)Commission Against Corruption (Macau)The Commission Against Corruption of the Macau was established with the Special Administrative Region in 1999 after China resumes sovereignty, pursuant to article 59 of the its Basic Law and modelled after the Independent Commission Against Corruption of Hong Kong.The CCAC replaced the High...
Cases
- Shanghai pension scandalShanghai pension scandalThe Shanghai pension scandal was a corruption case in Shanghai, China, in the which resulted in the dismissal of several senior Chinese Communist Party officials from 2006 onwards...
- Allegations of corruption in the construction of Chinese schoolsAllegations of corruption in the construction of Chinese schoolsThe Sichuan schools corruption scandal was a series of allegations of corruption against officials involved in the construction of schools in regions affected by the 2008 Sichuan earthquake...
of the 2008 Sichuan earthquake2008 Sichuan earthquakeThe 2008 Sichuan earthquake or the Great Sichuan Earthquake was a deadly earthquake that measured at 8.0 Msand 7.9 Mw occurred at 14:28:01 CST... - Chongqing gang trialsChongqing gang trialsThe Chongqing gang trials were a series of triad-busting trials in the city of Chongqing that began in October 2009 and is ongoing as of July 2010...
- P Chips Frauds
- S-Chips ScandalsS-Chips ScandalsS-Chips Scandals relates to corporate scandals surrounding Chinese companies listed on the Singapore Exchange. Embezzlement, forgery, accounting fraud had been the order of the day. Frauds were perpetrated by Chinese citizens and facilitated by mostly Singaporean and Malaysian securities promoters...
- China Stock Frauds
Society
- GuanxiGuanxiGuanxi describes the basic dynamic in personalized networks of influence, and is a central idea in Chinese society. In Western media, the pinyin romanization of this Chinese word is becoming more widely used instead of the two common translations—"connections" and "relationships"—as neither of...
(personal relationships in Chinese culture) - Capital punishment in the People's Republic of ChinaCapital punishment in the People's Republic of ChinaCapital punishment in the People's Republic of China is currently administered for a variety of crimes, but the vast majority of executions are for cases of either aggravated murder or large scale drug trafficking...
- Prostitution in the People's Republic of ChinaProstitution in the People's Republic of ChinaShortly after taking power in 1949, the Communist Party of China embarked upon a series of campaigns that purportedly eradicated prostitution from mainland China by the early 1960s. Since the loosening of government controls over society in the early 1980s, prostitution in mainland China not only...
- Law enforcement in the People's Republic of ChinaLaw enforcement in the People's Republic of ChinaLaw enforcement in the People's Republic of China consists of an extensive public security system and a variety of enforcement procedures are used to maintain order in the country...
- Penal system in the People's Republic of ChinaPenal system in the People's Republic of ChinaHard labor still was the most common form of punishment in China in the 1980s. The penal system stressed reform rather than retribution, and it was expected that productive labor would reduce the penal institutions' cost to society. Even death sentences could be stayed by two-year reprieve...
International corruption index
- Corruption Perceptions IndexCorruption Perceptions IndexSince 1995, Transparency International publishes the Corruption Perceptions Index annually ranking countries "by their perceived levels of corruption, as determined by expert assessments and opinion surveys." The CPI generally defines corruption as "the misuse of public power for private...
- List of countries by Corruption Perceptions Index
External links
- Transparency International - international research and policies
- Chinese National Integrity System Study
- Promoting Transparent Procurement and strengthening Corporate Responsibility in China
- Systemic Corruption in the Construction Sector brings Chinese and International Experts Together
- China's Governance Crisis Report