In China's corruption crackdown, a few fallen giants may well be enough

Tim Collard says with its seemingly ambivalent approach to fighting corruption, Beijing is seeking as much to warn senior officials to behave as it is going all out to catch and punish offenders

PUBLISHED : Monday, 14 April, 2014, 4:28am
UPDATED : Thursday, 03 November, 2016, 8:29am

What are we to make of the mixed signals given by President Xi Jinping's leadership team on official corruption, and the enrichment of officials and their family, either directly at the state's expense or by extortion from business and the public? It was a nettle that Xi seemed keen to grasp at the very outset of his administration, announcing that "tigers" as well as "flies" would be caught up in the inexorable net of the party's disciplinary apparatus.

And it cannot be denied that radical steps have indeed been taken. First was the removal of Bo Xilai from his entrenched position of power; Bo's real crime was challenging the whole style and modus operandi of the leadership rather than corruption, but his family's financial affairs and his wife's bizarre behaviour provided the means of destroying him.

And now we see the forces of justice closing in on Zhou Yongkang and his network of cronies. Meanwhile, senior leaders placed reforming the "work style" of party cadres at the very top of the agenda for last month's National People's Congress session, and the president himself pointedly allowed himself to be seen eating simple food in a simple restaurant, without a champagne glass in sight.

However, this campaign is to be kept within strict bounds. Financial irregularities may only be uncovered by the top echelons of the party, not by ordinary people or - worse still - by foreigners.

When The New York Times was found to be conducting investigations into the mysterious wealth of relatives of Chinese leaders who have remained in good standing at home, their operations in China were severely hampered as a result of official displeasure.

More recently, a row has blown up within the Bloomberg operation, as one of their reporters was prevented by management from continuing his research into a similar story, explicitly because it looked likely to antagonise the Chinese, whose co-operation was needed for Bloomberg's financial information service. This kind of trimming is painful for Americans, but China won't mind that at all.

So is the Chinese government's attitude merely hypocritical? Are they simply using the anti-corruption campaign as an excuse to purge internal enemies, while allowing the favoured few to carry on as ever? I think it is more complicated than that.

Since cadres of officials first emerged during the Tang dynasty, it has always been understood that officials tended to use their positions to enrich both themselves and their dependants; "when a man becomes a minister, even his dogs and his chickens go to heaven", it was said.

Thus, in tackling corruption, the People's Republic has not only human greed but a thousand years of history to contend with. Besides, in those days, those who had been enriched by imperial service could easily be despoiled when they fell from favour; there were no facilities for hiding large amounts of money outside China, as there are now. The game has changed, and a corrupt official is now in a position to finance an independent power base from abroad. This may be what Bo was suspected of doing.

But it is also clear that, even on a much smaller scale, the use of official positions for self-enrichment is disruptive of society, creating perverse incentives. Part of China's banking problem is that some banks are deeply enmeshed with government and party structures, and make lending decisions for non-commercial reasons, resulting in large numbers of non-performing loans and the accumulation of capital in personal bank accounts rather than in the productive economy.

This, though hugely damaging, may appear almost like a victimless crime to the normal Chinese worker; not so the extortionate taxes, fees and other payments which are extracted every day from those trying to operate in a true market, selling things that people want to buy. It is clear that the elimination, or at least the drastic reduction, of official corruption is a real requirement, and that the leadership is genuinely committed to it.

But it is equally committed to ensuring that the party remains in complete control of the reform process.

Thus, the high-level corruption probes into the party's fallen giants might be interpreted as a shot across the bows: we are going to make an example of certain figures, to inspire public confidence and to make it clear what kind of practices we are looking to eradicate. In future, leading party figures must avoid these practices, or we might turn the spotlight on you. So long as that is understood, we are prepared not only to overlook what you may have done before now, but to defend you to the hilt against any outside attempt to reveal uncomfortable truths; for as long as you remain utterly loyal to the central leadership, that is.

And, given that no one really expects total transparency to prevail in China any time soon, this may prove quite a sensible compromise.

Tim Collard is a former UK diplomat specialising in China. He spent nine years as an analyst in Beijing