Why China’s Corruption Won’t Stop

Why China’s Corruption Won’t Stop

The Communist Party is failing to heed demands for political reform.

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A paramilitary policeman stands guard in front of the Great Hall of the People, the venue of the 18th National Congress of the Communist Party of China, in Beijing. Reuters/Petar Kujundzic

Failing to tackle corruption “could cause the collapse of the party and the fall of the state,” warned Hu Jintao, the outgoing general secretary of the Chinese Communist Party, at the Eighteenth Party Congress in November 2012. By January, the newly appointed party chief, Xi Jinping, publicly pledged zero tolerance for corruption, vowing to prosecute both “tigers” and “flies”—i.e., top officials and lowly bureaucrats alike.

Both leaders were trying to temper public anger over the issue of corruption, which had led to massive demonstrations all over the country. Still, one wonders how sincere Xi is about tackling corruption. After all, Bloomberg News reported last June that the wealth of Xi’s extended family amounts to billions in minerals and real estate, including a stake in a rare-earth company that alone is worth $1.73 billion. So would Xi start by putting members of his own family in the dock?

This is not the first time that China’s leaders have promised to crack down on corruption. Some twenty-five years ago, former Communist Party General Secretary Hu Yaobang began an anti-corruption campaign by investigating the finances of the children of high-ranking party officials. Hu’s investigation angered the top leaders, including Deng Xiaoping, who pushed for his downfall. When he died in April 1989, some 100,000 students marched to Tiananmen Square on the night before his funeral to mourn him and to voice their grievances against inflation and corruption. The demonstrators camped out in the square, and hundreds of thousands more joined them later. In the end, Deng rejected their demands and ordered the bloody Tiananmen Square massacre.

Deng had used force to save the Chinese Communist Party. Likewise, Xi—even as he publicly pledged to end corruption—delivered an entirely different message behind closed doors to the party cadres in Guangdong Province last December. There, he urged the party to heed the “deeply profound” lessons of the Soviet Union. To avoid the prospect of a similar demise, Xi insisted, the CCP should maintain absolute control over the military. Since Xi will not enact democratic reforms for fear of leading the party down the Soviet path to extinction, his only option is repression. To Xi, as to Deng, the survival of the Communist Party takes precedence over everything else.

But the corruption within the party is pervasive. In the past, the public has mostly witnessed corruption at the local level. However, shortly before the convening of the Eighteenth Party Congress, a factional struggle broke out at the highest level of the establishment over the slate of candidates for top party positions that were to be confirmed there. Incriminating evidence of corruption was leaked from different sides of the internal conflict. In the early spring of 2012, the party chief of Chongqing, Bo Xilai, who was also a member of the Chinese Communist Party Political Bureau, was accused of collaborating with his wife in the murder of British businessman Neil Heywood, with whom she’d had a disagreement over the amount of money owed to him for his alleged services in laundering $1.2 billion out of the country.

In June 2012, as mentioned earlier, an account of Xi Jinping’s multibillion-dollar family wealth was compiled by Bloomberg News. And in October, The New York Times obtained information that family members of Wen Jiabao, the popular outgoing premier affectionately known as “Grandpa Wen” and an outspoken critic of official corruption, had accumulated a fortune of $2.7 billion.

On the local level, party leaders have no qualms about privatizing state industries by dismissing workers and picking the enterprises clean of their assets. They confiscate farmland, sell it to developers and use the money to acquire mansions. Most use public funds to purchase fancy European sedans. Many are into collecting gold and diamond-studded Swiss watches like Omega and Patek Philippe, which have price tags ranging from $5,000 to $40,000. One of the popular sports on the Internet in China is exposing officials who have been seen wearing expensive watches worth far more than they could afford on their salaries. The railway minister, for example, was caught wearing a different Swiss watch on four separate occasions, worth $60,000 in total.

A small-town party chief from Guangdong Province, Li Weimin, used funds pilfered from the municipal budget to go on gambling sprees in Macao’s casinos, losing $12 million. He is just one of a growing number of party officials from China, where gambling is illegal, whose extravagant misuse of pillaged public funds has made Macao the biggest gambling market in the world, with annual revenues surpassing those of Las Vegas and Atlantic City combined.

It is common for Chinese officials to have a mistress through an arrangement known as bao er nai: setting up a “second wife” in a separate household. In the most notorious case, Pang Jiayu, the former deputy head of the political advisory body in Shaanxi Province, had no fewer than eleven paramours when he was expelled from the party. A study by Renmin University showed that 95 percent of the corrupt officials netted in Beijing’s crackdowns in 2012 had mistresses. Recently, photos of three party officials from Anhui Province participating in a sex orgy went viral on the Internet.

There is no end of the scandalous exposés and sleazy dealings besmirching the party’s image. Under investigation for acquiring sixty-seven real estate properties with a total value of $250 million, a municipal official from Maoming City in Guangdong Province was defiant: “You think I’m corrupt? But who isn’t corrupt? Can you tell me of one person on my official level who isn’t? China is a system in which corrupt officials promote corrupt officials. I don’t have to tell you this! But do you have the guts to go after the really big ones?”

The biggest source of corruption is nepotism. As the ancient adage has it: “Once an official reaches a high position, his wife and sons are bestowed with honorific titles, his dogs and chickens are elevated to the sky.” The worst examples of this nepotism are the so-called princelings, the children of prominent Communist officials who have acquired their positions and wealth not by merit but because their parents are high up in the political establishment. Currently, princelings hold positions as CEOs or members of the board of directors in all the major state-owned energy, financial, heavy industry and natural resource companies. Ostensibly making a government salary, they control billions in assets. Bloomberg News tracked the descendants of the “Eight Immortals” of the Chinese Communist Party (Deng Xiaoping and his seven strongest supporters in the party, who led the reform movement in the late 1970s). Three among them—Gen. Wang Zhen’s son, Wang Jun; Deng Xiaoping’s son-in-law, He Ping; and Chen Yuan, the son of Mao’s economic czar Chen Yun—headed or ran state-owned companies with combined assets of $1.6 trillion in 2011, the equivalent of one-fifth of China’s annual economic output. Princelings hold four of the seven seats on the standing committee of the CCP’s Political Bureau, the highest decision-making body in the land. In short, communist China has developed a new aristocratic class, deriving its power and wealth through inheritance.

Party officials and their family members have reaped the spoils of China’s prosperity and amassed unbelievable riches, creating a deeply polarized China. There are 251 billionaires in the country today, compared with only fifteen six years ago; 0.4 percent of China’s families own over 70 percent of its wealth. In 2012, there were more than 500 corporate CEOs in the National People’s Congress out of a total of 2,987 delegates. The top seventy members of this body are worth $89.8 billion. In contrast, the worth of all 535 members of the US Congress, the president, his cabinet and the nine Supreme Court Justices is only $7.5 billion.

The officials themselves know their privileges can’t last, and thus they are moving their families and their substantial bank accounts out of the country, mostly to the United States and Canada. Since the mid-1990s, at least 18,000 officials have escaped from China, taking a minimum of $120 billion with them. Others, commonly known as “naked officials,” have set up their families in comfortable circumstances abroad and stayed behind, ready to take flight whenever the wind shifts. Roughly 90 percent of the members of the CCP Central Committee Politburo and the Central Commission for Discipline Inspection have family working or living overseas.

* * *

Corruption has seriously undermined the party’s authority. In the past year and a half, popular unrest has risen to unprecedented levels. At the end of 2011, villagers in Wukan, Guangdong Province, incensed by developers who were grabbing village-owned farmland with the help of corrupt local officials, stormed government offices and the police station and drove the party officials and the police out of the village. The uprising was so popular that, rather than forcibly putting it down and making martyrs out of the village leaders, the party backed off and allowed residents to hold their first-ever secret-ballot election and choose their own governing committee. The success at Wukan inspired the residents of neighboring Haimen, where 30,000 took to the streets to protest the building of a coal-fired power plant. In the village of Xibian in Fujian Province, several hundred people protested illegal land sales; a crowd surrounded the local government office waving banners reading “Learn From Wukan.” Demonstrations elsewhere have emulated Wukan’s tactics, featuring signs like “Return My Human Rights” and “Open Elections.” These people see political reform as an antidote to the party’s corrupt rule.

Meanwhile, Chinese citizens can’t find safe milk products for their children or breathe clean air because of corrupt and uncaring officials. The public is demanding accountability, and that voice is amplified by millions of participants in online forums. Adding fuel to the public anger is censorship. Southern Weekly’s editors went online in January to denounce the Central Propaganda Department for censoring an editorial calling for the country to be ruled by its Constitution and replacing it with a piece glorifying the party. Almost overnight, Southern Weekly became a rallying point for free speech. Demonstrators appeared in front of the journal’s headquarters with placards demanding, “Get rid of censorship. The Chinese people want freedom.” The last time the country saw such public demand for free speech was when the party fired the editor in chief of the popular journal World Economic Herald, which became one of the many grievances that sparked the massive protests in Tiananmen Square in 1989. (In the wake of Tiananmen, the World Economic Herald was completely shut down.)

Public anger and resistance have placed the Communist Party on the defensive. The first thing Xi Jinping did as the new party boss to respond to the popular fury was to order “four dishes and one soup” for all future official functions instead of the standard twelve-course banquets featuring delicacies like bird’s-nest and shark-fin soup. In a nation where the cost of corruption is measured in the billions, this proposal comes across as a bad joke.

* * *

Despite the rising public demand for democracy, the Communist Party remains a formidable obstacle. Unlike most dictatorships that rule by the military and the secret police, the CCP is infinitely more resourceful—a powerful organization capable of shaping every aspect of Chinese society without using violence. All important government decisions have to be sanctioned by the party. For instance, China has a set of labor laws protecting workers; however, a judge’s decision adhering to the letter of the law can be reversed if the party secretary at the judicial court handling the case considers the ruling detrimental to the meeting of national production targets. The party stands above the government, feeling no need to abide by its laws.

In everyday life, the system is designed to eliminate as much as possible the distance between the party and the people. Schools, media, sports and social clubs, and residential, entertainment and religious associations are all under the supervision of specific government bureaus and corresponding party branches. Every individual, whether at work or at play, whether in the office or at home, is overseen by the party in some way. With such a tight grip, no opposition can emerge. Unregistered organizations like Falun Gong or underground Christian churches, which are not under the party’s control, must be crushed.

The vigilance of party members is essential to maintaining the party’s effectiveness. Their training starts in elementary school, when all students are members of the Young Pioneers, whose role is to indoctrinate children with the concept of loyalty to the party and the motherland. It continues in high school, where young people with promising qualities are recruited into the Communist Youth League, which is under the direct supervision of the Communist Party. By the time select members are accepted into the party itself, they can be trusted for their loyalty and depended upon for their organizational skills.

In the past, the party could always count on outstanding people to join it. Besides, party membership is virtually required for advancement in government and civil service jobs, which are the ones most coveted in China. Currently, there are 82.6 million party members, amounting to 6.1 percent of China’s population. Since China’s transformation into a market economy, however, the party has been drifting away from its ideological moorings. Staying on course is difficult in the environment of a rapidly expanding economy driven by individual greed, which saps the discipline of its members. Moreover, without external opposition to challenge its authority, the party has become complacent. Internally, it lacks a self-correcting mechanism to rectify its mistakes.

What does this bode for the CCP’s future? In the summer of 2012, the reissued Chinese edition of Alexis de Tocqueville’s 1856 study of the French Revolution (The Old Regime and the Revolution) became an instant bestseller and sparked a heated public debate. The book even elicited a recommendation by Wang Qishan, China’s vice premier and a member of the CCP Politburo Standing Committee; he is also in charge of the latest anti-corruption campaign. In an interview with the Chinese press, Wang argued that reform is necessary but also cautioned that it takes time, and that in France overthrowing the autocratic monarchy by violent means had many negative consequences.

The mere fact that the Chinese are discussing their problems in terms of the French Revolution is momentous: it seems to imply that they see China today as resembling France in 1789, when public disgust with the regime’s corruption and decay led to revolution. Chinese people from all walks of life—intellectuals, professionals, laborers and farmers—have been agitating for political reform and demanding, at the very least, a constitutional government and the rule of law. Yet this is exactly what the one-party system cannot accede to, even though without real reform, the Communist Party’s future looks bleak. If it eventually collapses—which now seems a real possibility—China faces a daunting challenge: without a viable opposition group, trained and ready to take power and govern, the country will almost certainly slip into anarchy. The only hope is that, given the party’s decaying discipline and weakening capacity to enforce compliance, a larger civic space beyond its control will emerge and grow, in which the opposition can develop into a political force with a responsible, mature leadership capable of ushering in democracy.

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