Xi Jinping

China's austerity drive has merits beyond showing leadership

PUBLISHED : Sunday, 11 August, 2013, 12:00am
UPDATED : Sunday, 11 August, 2013, 1:22am

China's austerity campaign - unlike those in the West which have been triggered by budgetary shortfalls - is driven largely by the new leadership's determination to address what it sees as the slipping moral standards of the Communist Party elite.

President Xi Jinping's first move as party chief was to bar lavish banquets, red-carpet receptions, wasteful travel and other trappings of corruption that have stained the public's perception of the government.

We have to learn from China. Not everything, not all the time, but certainly on this occasion. It is a remarkable shift in Chinese politics. It goes beyond plain restrictions of the menu to a few dishes. It is not just about frugality for the sake of it.

It is pure leadership by example, having recognised that moral standards of the elites have declined. It is a bold move in the right direction. With rising income inequality, politics could evolve into a class struggle, not too different from the social circumstances of the civil war that raged between the Chinese Communist Party and the Kuomintang.

Politics aside, there are merits in a frugal government.

First, government expenditure will drop. There is less pressure to raise revenue through taxation on businesses and people. Nobody likes to pay more tax.

Second, without feeling pressured to tag individual performance to economic growth, it lessens the possibility of corruption. Officials will not feel compelled to work in cahoots with foreign and domestic investors.

Third, the tone helps to set the right expectations and attract the right talent to the government. With the right job scope and ideals, it is hoped that people with good morals will join the fight against corruption and promote policies and programmes that ensure sustainable and peaceful development.

Fourth, the agencies will focus on core work with a smaller budget. This will institutionalise and compel officials to work within limits but think out of the box; to do more with less.

Finally, officials can now have more private time with their family with fewer official functions. There is also room for social and community work.

While the merits are clear, there will be short-term pain. Credit is tightened, businesses feel the chill. But for China and the world, short-term pain will pay off in the long run.

Looking at Singapore where I live, are there lessons that we can learn from China? Are we prepared to go on an austerity drive with certain objectives in mind?

Chin Wei, Singapore