Xi’s crackdown on corruption ‘will help boost China’s economy’
Study finds anti-graft measures have made it easier for small businesses to compete
China’s drive to clamp down on corruption might be bad for profits at upscale restaurants and casinos, but ultimately it is going to help the nation’s economy, a recent study has concluded.
President Xi Jinping’s signature campaign since taking office in 2012 stands to improve allocation of resources and help small companies – the backbone of the entrepreneurial economy – obtain easier access to finance, according to the research led by Mariassunta Giannetti, finance professor at Stockholm School of Economics.
Xi made the topic an important part of his address to the Communist Party congress in October, at which he consolidated his position as the most powerful Chinese leader in decades.
The crackdown, launched only days after he came into power in late 2012, has snared more than 1.5 million officials including Bo Xilai, the former Chongqing party boss who was seen as a possible future leader.
The research found that the amount large companies spent on meals and gifts to attract the favour of government officials – commonly detailed in an accounting line known as “entertainment expenses” in China – dropped as a ratio of their sales in the two years after the campaign began.