China has waged a campaign against public corruption for the past two years and there is no sign of abatement. At first, there was speculation it was a cover for a power struggle and therefore would be short-lived. Increasingly, it appears to be a means of forging a new social contract for the post-Deng era.
The social contract forged by Deng Xiaoping traded market-driven economic growth for political stability. Some individuals and families amassed huge fortunes in the process. Many were private entrepreneurs whose gains were made through fair market competition, but others were public officials who captured economic benefits through the exercise of political influence. The rise of this public corruption has incensed the public.
Some commentators allege that corruption might be inherent to Chinese culture because, for over two thousand years, the traditional Chinese economy was quite corrupt despite failing to grow.
But the public corruption that existed in traditional China is fundamentally different in nature from that which has appeared in a modernising China.
Traditional China had an agrarian economy. Its defining characteristic was a large collection of geographically dispersed village communities founded upon kinship relations.
In 221 BC, at the end of the Warring States period, China became a unified, centralised, bureaucratic imperial state that became the main glue holding together the diffusion of local agrarian economies. The latter were not economically integrated even up until Deng’s reforms.