Scepticism greets new premier's attack on graft

PUBLISHED : Saturday, 29 March, 2003, 12:00am
UPDATED : Saturday, 29 March, 2003, 12:00am

Regional economists and businesspeople said yesterday they were sceptical that new Premier Wen Jiabao's warning to corrupt government officials this week would lead to a cleaner government on the mainland.

'We must grasp five major directions in our fight against corruption and building a clean government,' Mr Wen told the State Council on Thursday. He listed a detailed game plan, which includes focusing on civil service discipline and cutting back the bureaucracy.

Analysts are pleased that the new premier has made fighting corruption a priority, but are sceptical that he will make any difference.

'Corruption in China cuts across a broad spectrum of society and government,' said Liao Qun, chief economic strategist with Citic Ka Wah Bank in Hong Kong. 'It has historical roots and can't be solved easily. The key is to contain it and to not let it grow.

'Are the efforts enough? It's hard to say. The new government must do more in this area - this is for sure. If not, it will affect how people view the government, and the increasing income disparity will eventually drive the economy to its knees.'

Premier Wen said he believed the new State Asset Management Commission's plans to privatise state-owned enterprises would help fight official corruption. It is well known that many executives of state firms conspire with government officials to steal state assets, solicit kickbacks, and many other illegal activities.

Corruption is so rampant that mainland economist Hu Angang predicted last year that roughly 15 per cent of the nation's gross domestic product of US$1.2 trillion (HK$9.3 trillion) was corruption-related income.

'It's hard to say if Hu Angang is right or not,' said Mr Liao, who was a senior economist with Beijing's State Development Planning Commission in the early 1990s. 'Corruption may not be so bad in an inefficient economic system. But from a justice point of view, it is wrong. From a disparity point of view, it is wrong.'

According to a recent study of mainland bank deposits, 0.16 per cent of the population controls 65 per cent of the nation's US$1.5 trillion liquid assets. Compared to the rest of Asia, China has the highest concentration of wealth in the fewest hands, an indication that a small group of mainlanders - 2.4 million - were able to get rich quickly.

China economist Huang Yiping of Salomon Smith Barney in Hong Kong said he also did not expect much would happen in the anti-corruption front despite Premier Wen's tough talk.

'More transparency, anti-corruption, these things have been talked about in the past, but nothing changed,' said Mr Huang. 'However, China's entry to the World Trade Organisation may actually be a much bigger push factor, pressuring changes.

'The pressure to change is greater than in the past, and the leaders really feel the pressure, especially the social pressure, and they seem more willing to change. But we don't expect they will make dramatic changes.'

Premier Wen also said he would be watching property developers and their relationships with urban planning officials, who are infamous for their demands for kickbacks.

The premier also said he would keep an eye on corrupt judges, who conspire with lawyers to seek bribes in return for favourable judgments.

'To win a court case in China, you must hire a lawyer who is very close to a judge and make sure that your case is presented to the judge,' said a Beijing businessman.

'Every judge has a 'white glove' - a lawyer who helps him garner kickbacks. The judge never collects, but his lawyer collects on his behalf. This way, you can never trace the kickback directly to the judge.'