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    China's Corruption Conundrum

    By Michael Wolraich on Tue, 11/20/2012 - 3:27pm | Politics, World Affairs

    "We must be vigilant," proclaimed Xi Jinping, China's new paramount leader. In his inaugural speech to the 25-person Politburo, he warned that rampant graft and corruption would "doom the party and the state" if it continued unchecked.

    He has a point. From petty graft in far-flung villages to the regime-shaking Bo Xilai scandal, rampant corruption has fueled the social unrest that the long-toothed oligarchs fear so much. Payoffs have bumped China's vaunted high-speed trains off their shoddy tracks. Graft has nibbled away the roots of its famously fertile economy.

    So in light of the very big, very obvious problem, I reckon that Mr. Xi was sincere when he called for vigilance. I also reckon that his predecessor Hu Jintao was sincere in 2006 when he fretted that corruption was sapping the Communist Party's "vitality." And I reckon that Prime Minister Zhu Rongji was sincere in 2003 when he called corruption "relatively serious"--a euphemism, the Guardian tells us, "for a problem that is widely believed to be out of control."

    Judging by the death toll, these sincere leaders have done a heck of a job. China is "the global leader for the number of corrupt officials who are sentenced to death, and actually executed each year," a distinction that should make an enlightened autocrat's heart go pitter-patter.

    Except that all the killing does not seem to have stemmed the corruption, which Mr. Xi acknowledges to be worse than ever. The cadres' take-home message seems to have been "Don't get caught" or at least "Don't get caught without a powerful patron at your back." And so the corruption flows on.

    What is a self-respecting paramount leader to do? It must be tempting to just twist the knob a bit to the right: more executions, bigger fish. Show the cadres that you're one vigilant paramount leader.

    Only it won't work. There's no incentive structure. Imagine you're an ambitious young apparatchik, eager to ascend the party hierarchy. How do you make friends and allies? By executing corrupt officials? Pursuing the big fish? That's more likely to get you locked up on trumped-up charges. So at best, you look away. At worst, you grab your share, then look away.

    What China needs are folks with true incentives. It needs independent police and prosecutors whose careers depend on high-profile arrests and convictions, not on discretion and obedience. It needs investigative journalists who succeed by revealing shocking acts of corruption, not by spouting sweet government propaganda.

    But these are precisely the elements that leaders like Mr. Xi will never permit. The police and courts answer to the party. Journalists who dare to accused officials are arrested. It was an American newspaper, the New York Times, that exposed the riches of Prime Minister Wen Jibao's relatives. The Chinese authorities suppressed the news, naturally. They would have done the same with Bo Xilai if his once-loyal police chief hadn't run to the American embassy. The Communist Party will not allow anyone in China enough independence to seriously challenge its own corruption.

    And thus poor Mr. Xi is in a bit of a bind. For if he wants to save the party and the state from his dark prophecy of doom, he will have to expose both to a peril that he fears even more than corruption: Freedom.

    Michael Wolraich is the author of Blowing Smoke: Why the Right Keeps Serving Up Whack-Job Fantasies about the Plot to Euthanize Grandma, Outlaw Christmas, and Turn Junior into a Raging Homosexual

    Topics: 
    Politics
    World Affairs

    Comments

    China's wealthiest have been moving assets out of the country.  That could be in advance of the kind of reforms you're talking about, that are necessary but also unlikely, but are probably in response to a system where there's very little trust.  Some day, the party might decide to impoverish your family.

    Lots to think about here.  I don't know nearly as much about China as I probably should.


    by Michael Maiello on Tue, 11/20/2012 - 8:03pm

    I don't know all that much about China either. I've been thinking about the maxim that a sustainable modern economy requires political freedom. People say it often enough but rarely explain why they believe it. I've been wondering what makes it so.

    One economic problem that seems endemic to autocratic societies is corruption. We take that for granted, but when you think about it, there would seem to be no reason that a determined autocrat couldn't stamp out corruption. Autocracies tend to be pretty good at law and order. If they applied the same diligence to punishing corruption that they do to punishing crime and dissidence, you'd think they could suppress it. But China is clearly having trouble, despite the attention of its leaders and the harsh penalties.

    Meanwhile, I've been reading all about the muckrakers of the early 20th century and how they helped cleanse political and corporate corruption in the U.S. And thus came this blog post.

    Not sure about the wealthy moving out their money. Maybe they expect a crackdown. But doubt that it will be effective in the long term even if there is one.


    by Michael Wolraich on Tue, 11/20/2012 - 9:45pm

    So, ironic for me here, but Michael Mandelbaum, who is a Thomas Friedman pal (they co-wrote a book together) and a professor at Johns Hopkins argues that economic development precedes Democracy.  I interviewed him and reviewed his book Democracy's Good Name a long time ago and he argued that China was a likely near-future society because it was pushing a threshold of gross income per capita (emerging middle class) and has the basic social institutions that would engender enough trust between people to make the transition.

    He pointed out that complete autocracies, like Iraq, were bad candidates for effective democracy, given Hussein's domination of the culture.  I know I've borrowed this idea in posts here, quite frequently, but I think you see the essential weakness of it.  Really?  China, of all places, with its secret police and one party rule, is a place where trustworthy social capital has been hoarded?  Seems doubtful.  A country where you can be jailed and tortured for blogging is not a county where people feel free and trust their neighbors.

    I also think that poltical scientists tend to ignore economic cheats, which are hard to quantify.  But, Mandelbaum was right that capitalism and democracy are both based on a certain faith in our fellow citizens.

    I think, from what little I know, that China is in trouble in that regard.  I also realize, just typing this, that people in the U.S. have a lot to consider about trust and good faith as well.


    by Michael Maiello on Tue, 11/20/2012 - 10:15pm

    Interesting. I do think that China's achievements challenged some long-held assumptions. Before Deng, few people would have thought that a huge autocratic state could be as successful as it has been. It reminds me, come to think of it, of European fascist states in which totalitarian governments suppressed dissent but cooperated with business--sometimes quite effectively.

    My own view is that politics, institutions, culture, and economics must evolve roughly in tandem for a successful, stable modern state to emerge. Bestowing democracy on a feudal society does not tend to work very well. Conversely, economies and institutions cannot fully develop without democracy; China may be running up against those constraints right now.

    In short, I tend to agree with Mandlebaum that China is a good candidate for democracy because it has the other pieces in place. That said, I don't think that just because the other pieces are in place, democracy will necessarily follow, at least not in the near term.

    But I'll wait to see what Xi does before I indulge in too much cynicism.


    by Michael Wolraich on Wed, 11/21/2012 - 12:15am

    "It reminds me, come to think of it, of European fascist states in which totalitarian governments suppressed dissent but cooperated with business--sometimes quite effectively."

    Yeah, this is where I stop worrying about China and start worrying about us.


    by Michael Maiello on Wed, 11/21/2012 - 3:25am

    China's wealthiest have been moving assets out of the country.

    Yes, this is true, I've read it often enough. But the merely comfortable sending the kid to public high school in Iowa is a new one on me. (And what about all those tests showing Chinese kids getting a better education than American public schools?)


    by artappraiser on Fri, 11/23/2012 - 5:03pm

    Perhaps having a child fluent in English is considered a worthwhile trade off for any deficits in math.


    by ocean-kat on Fri, 11/23/2012 - 5:37pm

    Good assessment.

    Just what or who is more corrupt than Wall Street?

    Like Putin tellin' w what election corruption might boil down to. hahahahah


    by Richard Day on Wed, 11/21/2012 - 12:15am

    Wall Street is not exactly a bastion of the virtuous, true, but all you have to do is read about the rest of the world (or American history) to realize that most of our villainous financiers are relatively tame compared to other places and times.


    by Michael Wolraich on Wed, 11/21/2012 - 12:23am

    I do not think so Mike.

    I really don't.

    Wall Street controls the entire frickin world.

    But, it appears that regardless of TV crime shows and such...we do not murder the most corrupt. hahahaha

    Although we should. hahahahahahah


    by Richard Day on Wed, 11/21/2012 - 12:39am

    Grey lady is slandering the People's Republic again:

    A Chinese Education, for a Price
    By Dan Levin, New York Times, Nov. 21/22, 2012

    [....] Nearly everything has a price, parents and educators say, from school admissions and placement in top classes to leadership positions in Communist youth groups. Even front-row seats near the blackboard or a post as class monitor are up for sale.

    Zhao Hua, a migrant from Hebei Province who owns a small electronics business here, said she was forced to deposit $4,800 into a bank account to enroll her daughter in a Beijing elementary school. At the bank, she said, she was stunned to encounter officials from the district education committee armed with a list of students and how much each family had to pay. Later, school officials made her sign a document saying the fee was a voluntary “donation.” “Of course I knew it was illegal,” she said. “But if you don’t pay, your child will go nowhere.”

    [....]

    The costs can increase as college gets closer. Chinese news media reported recently that the going bribery rate for admission to a high school linked to the renowned Renmin University in Beijing is $80,000 to $130,000.

    [....]

    Some parents have found that the only way to preserve any integrity is to reject a Chinese education altogether. Disgusted by the endemic bribery, Wang Ping, 37, a bar owner in Beijing, decided to send her son abroad for his education. In August, she wept as she waved goodbye to her only child, whom she had enrolled at a public high school in Iowa.

    “China’s education system is unfair to children from the very beginning of their lives,” she said. “I don’t want my son to have anything more to do with it.” [....]


    by artappraiser on Fri, 11/23/2012 - 4:57pm