Crony Communism in China
By MINXIN PEI
OCTOBER 17, 2014
CLAREMONT, Calif. — When Xi Jinping launched his anti-corruption campaign shortly after becoming the general secretary of the Chinese Communist Party in late 2012, most observers thought he would merely go through the motions, jailing a few senior officials and then carrying on business as usual. His predecessors, after all, had used anti-corruption investigations largely to eliminate their political opponents and consolidate power. Disciplinary actions would spike during the year following a new leader’s appointment and fall the year after that.
But Mr. Xi’s campaign goes well beyond any immediate desire to establish his political supremacy. It is unprecedented in sweep and ambition, taking on the class of 5,000 or so very senior officials who operate the most vital organs of the C.C.P., the government, the military and state-owned enterprises. Its goal is no less than to upend the unspoken system by which China’s elites have been governing since the Tiananmen crackdown in 1989: a self-reinforcing web of relations based on patronage and corruption. As a leader driven by a historic mission to safeguard the C.C.P.’s rule against all odds, Mr. Xi sees endemic corruption as a serious threat to the regime’s long-term survival.
But corruption has penetrated so very deeply into the party-state that it has become the glue that holds it together. And so Mr. Xi’s campaign, which is meant to ensure the C.C.P.’s longevity, seems to pose an existential threat to it in the short or medium term.
Reliable data measuring corruption are scarce, yet several indicators, including the sums pilfered by officials, support the consensus among China watchers that corruption has increased significantly in the last two decades. According to corruption cases reported in the most authoritative official media, the median amount of bribes rose from just over $91,000 in 2000 to $225,000 in 2009, a 100 percent increase (after adjusting for inflation).
JEAN JULLIEN
Unscrupulous officials have been stealing more since the early 1990s thanks partly to a large increase in infrastructure spending. Lucrative contracts for roads, ports and railways are opportunities for them to enrich themselves or their cronies. Investment in infrastructure, real estate and other fixed assets rose from an average of 36 percent of G.D.P. during 1980-1991 to more than 41 percent during 1992-2011.
Based on the data for 2011, investment in infrastructure accounts for about one-third of total fixed-asset investment. Sixteen heads of transportation departments in 11 provinces have received severe punishment (one was executed) for corruption in the last two decades. Last year, China’s longtime railway minister, Liu Zhijun, was given a suspended death sentence for accepting more than $10 million in bribes.
Another source of windfall profit has been privatization — which is euphemistically called “property rights reform,” because of a lingering ideological squeamishness about turning nominally state-owned assets into private property. Since the early 1990s, the Chinese government has progressively relaxed its control over the disposal of land and mining resources, for example, allowing local officials unprecedented freedom to transfer these valuable assets to family members and friends. In a major scandal involving Zhou Yongkang, the recently retired internal security czar, his elder son purchased two oil blocks from the state-owned energy giant China National Petroleum Corporation for about $3.2 million and quickly resold them for a profit of more than $80 million. Cao Yongzheng, a crony of Mr. Zhou’s who claims to be able to predict the future, seems to have been given, most likely as a reward for some services, an oil block that brought him nearly $100 million a year, according to an investigation by the highly respected Chinese business publication Caixin.
Based on reports from the offices of provincial and municipal prosecutors, between one-third and two-thirds of all corruption cases in China today involve multiple officials and businessmen. In the 1980s, most corruption was committed by individuals acting alone. This newer, collusive form of corruption is far more pernicious because it is harder to detect and to stop, and it corrodes the institutional integrity of the state.
It also threatens the party’s control over local elites: Colluding officials typically promote and protect each other in a tight patronage network. In the city of Maoming, in Guangdong Province, more than 240 local officials, including three consecutive party chiefs, the executive vice mayor, the municipal police chief, the anti-corruption chief and many heads of the city’s agencies, were implicated in a corruption scandal in 2009-2012. In an unfolding mega-scandal in the coal-rich province of Shanxi, four of the area’s 13 most senior officials have been detained for “serious violations of discipline and the law,” a.k.a. graft, including the province’s anti-corruption chief himself.
Such endemic corruption has fortuitously created a rare opportunity for Mr. Xi to make an immediate mark after rising to the top. Fighting corruption is now one of the three pillars of his domestic strategy, along with economic reform and the containment of pro-democracy forces. This war serves several objectives for him. As ever, it can help remove rivals and reimpose discipline on a ruling party that has become too soft. It can also intimidate a reluctant bureaucracy to carry out economic reforms that might undercut its power and privileges. And it can help Mr. Xi win popular support by going some ways toward repairing the C.C.P.’s tarnished image as a decadent regime out of touch with the masses.
To drive this message home, Mr. Xi is pursuing a multipronged approach. Its most potent component is the investigation and prosecution of a very large number of senior officials, who once enjoyed de facto immunity. In the last 23 months, 50 so-called tigers or senior officials with vice ministerial ranks and above have fallen into Mr. Xi’s dragnet, compared with only 30 in the five years prior to his appointment as C.C.P. chief. Mr. Xi’s hunt has captured some supersized cats, including Mr. Zhou, who in addition to being the internal security czar was also a former member of the Politburo Standing Committee, the party’s top decision-making body. Another unprecedented move was the prosecution of the top general Xu Caihou, a newly retired vice chairman of the Central Military Commission and a former Politburo member.
The clean-up campaign has introduced procedural changes that make it much harder for local elites to cover up corruption. The Central Commission for Discipline Inspection, the party’s internal anti-corruption agency — which is headed by Mr. Xi’s ally, Wang Qishan — increasingly relies on special inspection teams to ferret out corrupt officials in the provinces through extended confidential interviews and investigations. Local anti-corruption agencies must now report the results of any investigation they conduct to a higher-level anti-corruption agency.
Mr. Xi’s campaign also imposes austerity measures, eliminating many of the lavish perks China’s ruling elites have come to take for granted. New regulations prohibit officials from accepting extravagant gifts, entertainment and travel accommodations. The result has been a steep fall in the sale of French Cognac and Swiss watches, as well as widespread resentment among officials.
Comprehensive and bold, Mr. Xi’s strategy is risky precisely because it is needed: Corruption permeates the institutional fabric of China’s party-state; it is the proverbial grease that oils the vast Chinese bureaucracy. After Tiananmen and the collapse of the Soviet Union, the C.C.P. was left with little ideological appeal, and as a survival strategy, it began rewarding loyalists with lucrative positions, securing their support with material benefits. This made good political sense, but the C.C.P. did too little to limit the leeway of its minions, and they soon developed a sense of entitlement. They also began to follow a new modus vivendi, with officials at all levels trading favors to resolve their differences over personnel matters or the distribution of economic spoils. They maintained stability and cohesion within their ranks by way of oligarchic horse-trading.
But now Mr. Xi’s war on corruption is challenging this post-Tiananmen elite bargain. By imposing austerity measures and penalties for corruption on the bureaucracy of the Chinese party-state, Mr. Xi risks alienating, even antagonizing, the country’s most powerful political force.
At the moment, Mr. Xi has the public’s support and political momentum, and the bureaucracy is smart enough not to push back. Most of the battle-tested apparatchiks are feigning compliance and hunkering down. Some local officials are deliberately slowing down the pace of their work — like approving projects or executing routine administrative tasks — apparently to pressure him into ending or softening his anti-corruption campaign. If the economy flags, their calculation seems to be, Mr. Xi will have to shift his attention to reviving growth, a pillar of the party’s legitimacy.
Defeating such passive resistance may require Mr. Xi to adapt his strategy. So far, he has relied on his control of the military to deter any challenge. But he will need to broaden his base of support, both inside the C.C.P. and in Chinese society. That means quickly promoting reformers within the party to positions of power and granting more autonomy to the judiciary to prosecute corrupt officials. It may also mean something more radical: allowing the media and civil society to act as citizen watchdogs, even though so far the Xi administration has seemed intent on curtailing those groups’ freedoms.
Whether or not Mr. Xi modifies his approach to fighting corruption, it is clear he has already changed the rules of the game in China, particularly within the Communist Party. Less clear is whether the importance of prestige will turn out to be a stronger glue for the party than the bonds of venality that have been holding it together to date.
Minxin Pei is a professor of government at Claremont McKenna College.
http://mobile.nytimes.com/2014/10/18/opinion/crony-communism-in-china.html?referrer=
