China must act tough on corruption
GROWING economic prosperity in China has given opportunity for the Chinese political elite to earn black money with political corruption believed to be slowly cracking through the walls of the tough and closed communist regime.
Though slowly, the communist party has started acting. This action is likely to send waves across the party leaders to keep themselves from any form of corruption or malpractices.
China scored 3.6 in Transparency International’s Corruption Perception Index in 2011 (ranked 75th out of 182 countries) on a scale of 0 to 10, where 0 means that a country is perceived as highly corrupt and 10 means that a country is perceived as very clean.
Transparency International reports shows 46 per cent of Chinese people think corruption has increased in the past three years, 29 per cent think it has stayed the same and 25 per cent think it has decreased.
Rising figures
The recent case of Bo Xilai is a sample test for the communist party’s efforts to control corruption.
Bo was one of the top political figures of the Chinese communist party and was speculated to be a future president or prime minister of the country.
The party finally banished him after he was involved in failed property deals with British businessman Neil Heywood, who was later killed.
Bo’s wife Gu Kailai has admitted that she and her husband killed the British citizen over the property deal dispute, and on August 20 a Chinese court handed Gu a suspended death sentence for the murder.
Bo, once a hero figure in Chongqing, himself acted tough against crime and corruption and managed to push Chongqing as an example of good governance.
Over the years, cases of frequent actions and crackdowns on lower ranking officials over corruption charges have had little impact on controlling the powerful leaders in accumulating wealth.
In 2007 Zhou Liangluo, chief of the Haidian district in Beijing, was detained for his alleged involvement in suspicious property deals while in Shanghai.
At the same time, Yin Guoyuan, a former deputy head of the housing bureau, was being investigated in a similar case.
The communist party’s own anti-corruption body,the Central Disciplinary Inspection Commission (CDIC)’s action in 2006 against the party’s Shanghai province chief Chen Liangyu, led to his arrest, dismissal and suspension from the Politburo for alleged misuse of pension funds.
An audit in 2005 found that the lottery had diverted 558m yuan ($72m) into subsidiaries, which paid some of the monetary bonuses to staff.
According to figures from the report by China’s Central Bank released last year, corrupt officials smuggled 800bn yuan ($120bn) out of the country and around 17,000 people fled abroad with money between the mid-1990s and 2008.
Action against corruption
In 2010, the country’s premier Wen Jiabao told CNN’s GPS program, “I believe corruption and inflation will have an adverse impact on stability of power in our country”.
Furthermore, vice president Xi Jinping warned recently that personal extravagance and government corruption could undermine the power of the party.
As top leadership expressed their concern over increasing corruption, state mechanisms were put in place to act swiftly.
The CDIC handled almost 140,000 corruption cases in 2010 and more than 145,000 people were punished, yet corruption involving top political leaders is on the rise.
And the political commitment to curb corruption is far below expectation compared to the rate in which cases of financial irregularities are coming out in public.
To adhere to international obligations, the country is setting up a separate anti-corruption agency by the end of this year when the new leadership team takes over.
This will fulfil China’s commitment to the international community under a 2003 UN convention to set up an independent agency that monitors corruption. However, it is unlikely that it will ever gain ‘independent’ status.
The Government’s ignorance to the proposal by some parliamentarians to enforce anti-corruption law is an indication of the inadequate political commitment to rein in increasing embezzlement of state treasury.
In one of his addresses earlier this year President Hu Jintao had stressed the need for greater efforts to fight corruption.
Yet the only initiative Hu took during his five-year tenure as President of the second largest economy in the world was to establish that corruption in one state must be monitored and investigated by anti-corruption officials from another state; an action the Government thought would be effective.
These reforms turned out to be unproductive, as investigating officers must inform the provincial political leaders if they want to investigate any alleged corruption.
In previous years, China focused on toughening penalties, even resorting to capital punishment, as a measure to curb corruption, which also failed.
Wider impacts
China’s domestic wealth has increased dramatically in the last few decades but millions of people remain beyond befitting from this growth.
It is estimated 54 million people are currently unemployed, posing a risk to the already volatile Chinese financial system.
Reform in employment figures, shrinking income disparity, balanced growth, more reforms in the financial system and public accountability are some of the urgent steps that Chinese leadership must take to prevent the amassed wealth from the economic boom falling over like a house of cards.
The recent announcement by the government to explore the Chinese domestic market for its ever growing manufactures gives little hint the country is doing its best to address the public aspiration of equality in terms of using the nation’s property.
Addressing public concern of balanced growth and economic equality will continue to be questioned unless the regime controls political and bureaucratic corruption.
Amidst all this, public disappointment is increasing towards the Government’s inability to act tough on political and bureaucratic leadership for their increased involvement in corruption and is undermining economic growth and the effectiveness of any reforms in the country.
Obligations
The Carnegie Endowment corruption report on China argues that corruption not only fuels social unrest and contributes to the rise in socioeconomic inequality, but holds major implications beyond its borders for foreign investment, international law, and environmental protection.
Additionally, it affects the economy of China’s trading partners along with those economies heavily relying on China.
Corruption will obviously have negative impacts on industrial and economic growth, which in turn will have negative impacts on the world’s major economies in Europe and Asia.
Europe is the largest trading part of China while most Asian economies rely on Chinese industrial production.
Additionally, political corruption in China will influence the political leadership in neighbouring countries to imitate.
Outside the boundary of conventional thoughts on corruption, China has greater obligation to act and curb corruption in order to build a fairer and clearer political and bureaucratic system in Asia.
Chinese efforts to curb corruption means ripping off the interests of people like Bo Xilai who use state funds for personal gain. However the real question remains: how may Bo’s are out there?
High profile arrests, increasing public concern, promulgating new anti-corruption laws and announcement to form an independent anti-corruption agency are symptoms that China is very serious in its determination to stop corruption, which will help build more transparent and accountable government.
First Published in Our World Today