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Why Xi's Anti-Corruption Campaign Won't Work
Chinese President Xi Jinping outside the Great Hall of the People on May 6, 2013 in Beijing, China. (Feng Li/Getty Images)

Why Xi's Anti-Corruption Campaign Won't Work

John Lee

Another week and another senior official is caught by President Xi Jinping’s anti-corruption campaign. Wang Baoan, Director of the National Bureau of Statistics, was arrested for ‘serious disciplinary violations’ last Tuesday. The precise nature of the alleged violations have not been revealed but they are likely related to his previous role as deputy minister in the Ministry of Finance. Given that there is an estimated 99% conviction rate once one is arrested and investigated for ‘disciplinary violations’, Wang’s chances for acquittal are not looking good.

Xi’s anti-corruption campaign might be ruthless in that those accused are denied due process with which to defend themselves, but the common wisdom is that this is exactly what China and the Communist Party needs. According to data produced by organizations such as Transparency International, China rates poorly on all matters related to corruption. Crooked officials and Party members have become the number one complaint of citizens in the country.

Isn’t Xi responding as any good President of the country, and General Secretary of the Party ought to? Perhaps, but the campaign will never extend deep or far enough to really sweep away corruption in China to any significant extent no matter how many Chinese Communist Party members are demoted or placed in already crowded Chinese jails.

Xi’s anti-corruption campaign is not a new idea, but this time it’s different

Anti-corruption campaigns are hardly new in China. But Xi has taken it to a new level.

Under the current President, targets are secretly chosen and swiftly investigated by the Central Discipline Inspection Commission, the country’s most powerful and feared Star Chamber. Striking without warning is a big part of the scare tactic. On the day he was arrested, Wang was wearing his National Bureau of Statistics hat and in fine and feisty spirit at a press conference, dismissing bearish comments on the Chinese economy by hedge fund billionaire George Soros. Presumably, he had no idea what was to occur just hours later.

The Commission is answerable to Xi personally, and acts on behalf of the Party rather than the state. The clear message is that Xi runs the Party, and the Party still rules over China.

Since 2013, over 200,000 officials and Party members have been investigated, with a 99% rate of conviction. Compare this to the few thousand that were brought down each year in the previous Hu Jintao era. Those caught in the present era include not just lowly officials but heavyweights at the highest levels such as Zhou Yongkang, a former member of the all-powerful Politburo Standing Committee and then head of China’s fearsome security and law enforcement institutions. The former Chongqing chief, Bo Xilai, was jailed by the same process in 2013. There has been hundreds of other senior officials, bureaucrats and executives from powerful state-owned-enterprises or SOEs targeted. As Xi promised, it has been a case of not only swatting ‘flies’ but killing ‘tigers’.

In walking this line, Xi has accumulated respect and resentment in equal measure, with the latter likely to be the stronger and lasting sentiment. In Chinese politics, enemies have longer memories than friends even if the President’s detractors are quiet for the moment. Even so, one might expect that the campaign will enhance the standing and legitimacy of the Party, albeit at great personal risk to Xi and his presidency.

Corruption is part and parcel of the authoritarian model

It’s not that simple. China’s political-economy has been deliberately designed to ensure that Party members and officials are the primary beneficiaries of economic growth and opportunity. From this century onward, the Party’s strategy to remain in power is based largely on becoming the primary dispenser of commercial and career opportunity in the country.

This was a lesson learned from the countrywide riots in 1989 which almost unwound the authoritarian system. The key to remaining in power is to prevent the emergence of a genuinely independent middle and elite class which no longer views the Party as necessary or relevant to their own advancement – something occurring in the 1980s. In any rapidly industrialising society, it is the urban elites that decide the fate of authoritarian regimes. Co-opt and even create the elite class by making the authoritarian system work for them, and the future of CCP rule is that much more assured.

The problem is that too successful or comprehensive an anti-corruption campaign undermines this whole political strategy. Business and political success is widely viewed as interchangeable. A large number of those entering politics, or just joining the Party, do so on the expectation that they will benefit materially. This is the true social and political contract between the CCP and the country’s elites.

Take the 2015 National’s People’s Congress gathering which includes the Chinese People’s Consultative Political Conference in March 2015. Some 203 lawmakers and/or representatives were ranked amongst the richest 1,271 people in China with a combined net worth of $463.8 billion, according to the Hurun Report which tracks the rich in China.

Putting aside the mega-rich, well over 98% of the senior management of SOEs are card carrying Party members in the country’s state-dominated model. Over 90% of the approximately 85 million Party members are business elites. This is no coincidence since the point of Party membership and offering one’s loyalty is to access commercial benefits and opportunities that would not otherwise be available. It is no wonder that there is an estimated waiting list of one hundred million additional people wanting to join.

In a model where political position or connection is more decisive than any other factor in terms of material advancement, corruption is part and parcel of how things work within a political-economy where land, capital and even labour is still controlled or supervised by political entities, and for political purposes. Killing ‘tigers’ and swatting ‘flies’ might present as a morally attractive headline. But the relevance and popularity of the CCP depends on producing opportunities for these same tigers and flies to enrich themselves. Otherwise, why would elites and wannabes care how China is ruled and by whom? They may even demand rule-of-law rather than the rule-of-Party which currently exists.

In short, Xi cannot truly clean up the system without undermining the authority of his beloved Party. He can use the palpable fear he has generated to restrict ostentatious display of outrageous wealth, restrict capital flight out of the country, or eliminate political opponents or else keep them anxious and cowed.

But he cannot clean up China or the Party if that were ever his intention in the first place.

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