Accounts from Xi's anti-corruption drive

 •  Filed under China

The latest issue of The Economist describes how much harder it is to recruit people for local public sector jobs:

Since 2013, seven of the 13 members of Shanxi’s Communist Party committee (the province’s leaders, basically) have been arrested or charged with “infractions of party discipline”, a term that usually means taking bribes. In all, 50 high-ranking officials have been placed under investigation for graft. For its size, the province has had more leaders arrested or jailed than anywhere else.

... Wang Rulin, Shanxi’s party chief, complains that he cannot fill about 300 local-government posts because people are too scared to apply—or they think that party jobs are not worth having now they have to be clean. One executive in the coal industry complains that officials “used to take money and help us; now they don’t take money and don’t help either.”

In an earlier article, The Economist reported the new ban on playing golf:

China’s Communist Party has banned its 88m members from playing [golf]. The order was made public on October 21st after approval by the party’s Central Committee and endorsement by Wang Qishan ... Its aim is to “uphold the principle that Party discipline is stricter than the law”—that is, to show that party members are selfless sorts who would rather sit through a four-hour meeting about raising crop yields than do anything bourgeois or fun. The new rules also bar party members from “excessive eating and drinking” and “improper sexual relationships”.

Daniel A. Bell describes the extension of the goals of the Chinese government - economic growth alone is no longer the main metric for the assessment of public officials:

Over the past several decades, government officials could be promoted based on economic performance above all else. Today, the country’s problems are much more diverse: rampant pollution, growing inequality, precarious social welfare, not to mention massive corruption.

Here things become more complicated for a political system that prides itself on the meritocratic selection and promotion of leaders. Should government officials be assessed according to their ability to deliver economic growth, to improve social welfare, to reduce corruption, to deal with the environment, to reduce the gap between rich and poor, or to achieve some combination of these goals?

It is impossible to resolve such issues in a noncontroversial way, and there are bound to be many winners and losers no matter what the decision.

In The politics of China’s anti-corruption campaign William H. Overholt describes how the government is restructuring itself in response to a demand for oversight and punishment:

In China, the scale of graft has become potentially fatal for the regime. Some claim that China’s authoritarian system inevitably causes extreme corruption and a democratic China would be much cleaner. But poor democracies typically have much more crippling corruption than China. In these countries, there are few or no political contributions other than bribes or candidate self-funding and the complexity of democratic judicial systems makes it difficult to convict criminals, which empowers wealthy criminality.

... Realising the magnitude of opposition, China’s leaders achieved a working consensus to restructure China’s top political leadership to confront and defeat recalcitrant interest groups. They streamlined the Politburo Standing Committee from nine to seven and removed the extreme factions from the top leadership. ...

... This is one of the most audacious gambits in modern history: taking on all the most powerful groups at once, while betting on leadership unity, a technocratic economic strategy, an anti-corruption campaign as the core political weapon and a huge wave of popular political support.


Recent cases

FT: China anti-corruption watchdog targets People’s Daily

China’s anti-corruption watchdog has taken on People’s Daily, the flagship newspaper of the ruling party, accusing it of taking bribes to bury news and using the threat of exposure to blackmail.

WSJ: Governor of Key China Province Under Investigation

Chinese officials are investigating what they called suspected serious violations by the governor of the country’s Fujian province, the first time a standing governor has faced public allegations of malfeasance during the country’s nearly three-year-old discipline campaign.

FT: China detains ‘Kamikaze Squad’ billionaire in insider trading inquiry

Zexi is one of only 28 hedge fund managers in China with at least Rmb10bn under management, the official Securities Times reported in July. Five of the company’s fund products ranked among the top 20 in China by total return in 2015, according to ZCMall, an online wealth management platform. One of them, known as “Phase 3”, took the top spot with a 377 per cent return in the year to October 23.

Following a bull market in which the Shanghai Composite rose 153 per cent in a year to touch a seven-year high on June 9, the index tumbled 45 per cent by August 26. It has since recovered 19 per cent. In August and September, more than 10 top executives at Citic Securities, China’s largest brokerage, were arrested on suspicion of insider trading related to the market decline.

FT: China detains AgBank president amid anti-corruption campaign

Since ascending to the top of China’s political system in late 2012, President Xi Jinping has engaged in a ferocious anti-corruption campaign that has gone further and continued for longer than any since the founding of the People’s Republic in 1949. More than 100,000 people have been indicted for graft, while the party has banned cadres from fine dining, luxury hotels and, most recently, golf.

The Communist party’s anti-graft agency, the Central Commission for Discipline Inspection, said on Saturday it was launching an inspection tour of China’s financial regulatory agencies as well as the big four state-owned commercial banks, including AgBank. Previous tours have covered energy, telecommunications and media sectors.