china and alternatives to democratic means of combating corruption

7/27/2019 China and Alternatives to Democratic Means of Combating Corruption

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China and alternatives to Democratic means of combating Corruption

Introduction

Corruption is a universal phenomenon which every society on Earth must deal with. And China

is no exception. The post-Mao economic reforms have brought both a great deal of growth and

corruption into Chinese society. China today is one of the more corrupt countries on the planet,

ranking 75 out of 183 according to the corruption perception index, with a score of 3.6 on a

scale of 1 to 10 with 10 being the least corrupt. [Corruption Perception Index] Corruption, which

we will define as misuse of public authority for private gains, is frequently identified as one of the

biggest problems in governing China today: indeed, Chinese president Hu Jintao has stated

that corruption could be fatal to the continued rule of the Chinese Communist Party. [Badkar]

In general, countries which are found to be the least corrupt also tend to be mature democracies.

[Corruption and Democracy] This suggests that one possible path in ending the extreme levels of

corruption is democratization. This however, comes into direct conflict with the Chinese

Communist Partys continued political monopoly. A key question which is central to Chinas

political future is therefore: can Chinas corruption be reined in without full democratization?

It is, therefore, instructive to examine governments which are less than full democracies and

which have managed to rein in corruption in their societies as possible models for China to

follow. If it is determined that China could not effectively adapt the models laid out by other

societies in retaining both less than democratic governments and generally non-corrupt

societies, then full Democracy might be the only path for China to avoid the extreme levels of

corruption it faces today.


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The cases to examine:

In order to determine which countries we should look at as possible models for China to follow,

we will examine every country which has both significantly (which we will define somewhat

arbitrarily as having better than 5.0 on a scale from 1-10 under the CPI) less corruption than

China is, and is classified as more authoritarian than flawed democracy under the Democracy

Index published by the Economists Intelligence Unit. [Democracy Index] The results are, in order

of their CPI score:

Country Democracy Index CPI

Bhutan Hybrid Regime 5.7

UAE Authoritarian regime 6.8

Qatar Authoritarian regime 7.2

Hong Kong Hybrid Regime 8.4

Singapore Hybrid Regime 9.2

It should be noted that the fact that there are only 5 countries which fit our criteria indicate the

rarity of states which have achieved incorrupt societies while having less than democratic

governmental forms and implies that it is quite difficult to do so. This is a fact that China itself

can attest to, with its numerous anti-corruption drives [Becker, 10] but constant high levels of

corruption.


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Of the 5 countries we have identified, one, Bhutan, is a rapidly democratizing country and

therefore not a model worth examining. Two others, the UAE and Qatar, are amongst what are

commonly known as Gulf Oil Monarchies. [Davison] Those states have cultures, institutions,

and economic contexts which are completely different from and cannot be copied by China. Not

only that, but the Arab Spring have also cast severe doubts on both the immediate and long

term political stability of those regimes. Therefore, they should not be considered to be

instructive examples for Chinas future.

The two cases which remain are both majority (almost entirely in case of Hong Kong) ethnically

Chinese. Both are culturally and geographically proximately close to that of the Peoples

Republic. Not only that, but both have managed to curb corruption to the point where they are

less corrupt than that of first world democracies such as Germany, the UK, and the US. They

are, in other words, perfect cases to study if one wants a China without either corruption or full

democracy. This is especially true of Singapore, which we will focus on, since it developed anti-

corruption measures under a de facto one party system. Indeed, Chinas current leader Xi Ji

Ping have specifically studied Singapore as a possible model for China to follow. [Hartcher]

Hong Kong, Singapore and Anti-Corruption Bureaus

Remarkably, both Singapore and Hong Kong took very similar path towards achieving non-

corrupt societies. Both entities suffered greatly from corruption in the post war era. Both

societies then went on to form efficient anti-corruption strategies with an anti-corruption bureau

(ACB) at its center. Both are among the least corrupt places on earth largely thanks to the

efforts of their ACBs.


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We will first give an examination over those agencies as to why they are successful and then

determine if such models can be applied to China. The following conditions are identified as

necessary for ACBs to be successful in Hong Kong and Singapore. [Heilbrunn]

1) Political Will: The political elite of the country must be truly committed to ending corruption in

their country. They must, necessarily, be willing to stop protect their clients from persecution by

the ACB. They must also be willing to draft legislations which support anti-corruption measures

and close legal loopholes. They must also be willing to fund the ACB adequately as well as

provide them with enough authority to do their job. And crucially, they must not use the ACB as

a tool to attack political opponents as that will weaken the credibility of the agency and lead to

its ultimate failure.

2) Independence of the bureau: The ACB must not be under the jurisdiction of the police, as it is

the police which is often the cause of corruption in the first place. The ACB must also be free of

interference of dependence from other bureaucratic organizations.

3) The anti-corruption agency itself must be incorruptible, this is especially important and is

identified as the cause of the failure of Thailands ACB [Heilbrunn]

4) The ACB must be only a part of a concerted drive towards anti-corruption. For instance, the

bureaucracy must be streamlined to reduce rent. At the same time public awareness must be

raised as to the harms of corruption and a sense of responsibility not to participate in it be

instilled.


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ACB and China

To examine whether China can fulfill the conditions listed above, we will consider those

requirements in context of Chinas political system.

Accompanying strategies

Both Hong Kong and Singapore used their ACBs as only the center-piece of a comprehensive

anti-corruption strategy. Hong Kong for instance, conducted a 3 prong attack on corruption.

They combined enforcement by the ACB with efforts to prevent corruption, and by conducting

public awareness campaigns to raise cooperation with the ACB as well as educating the public

on the harms of corruption. [Heilbrunn, 5]

Therefore, we must examine whether the second and third portions of the strategy can be

conducted in conjecture with the first when it comes to China. In order for the ACB to be

effective, China must reign in opportunities for corruption or else the ACB risk being simply

swamped by the sheer number of corruption cases it must handle.

It follows that China must reduce rent extraction as those represent a significant portion of

corruption. This is perhaps the most important of the state controlled banks, which is today

heavily corrupt. In 2003, and state owned banks gave out and took in around 2/3 of all loans

and deposits in China respectively. In the same year it is estimated that on the average, firms

must kickback around 8.8% if loans taken back to those banks in order to acquire credit. [Pei,

106] Around 2/3 of all banking loans were given to SOEs under party control, often because of

the connections between SOE affiliates and banks. This resulted in a huge percentage of non-

performing loans, more than 40% by some measures. This is despite reforms to the banking

system in the late 90s, which indicates a failure of reforms to curb corruption in this sector.


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While it is possible that further reforms might bring about more accountability in the banks, it

must be acknowledged that the CCP is reluctant to give up any power over such commanding

heights of the economy; therefore privatization is unlikely, eliminating an avenue of reform. As

long as the party keeps control of this vital sector, current forms corruption is likely to be

entrenched in it, it will have significant problems in effectively preventing corruption as all

sectors of the economy are ultimately tied to it.

Political Will at the top

In China, political will does exist at the top for effective anti-corruption measures at least on the

superficial level, the Chinese leadership at the Politburo level have repeatedly emphasised the

need to reduce corruption and launched anti-corruption campaigns on a regular basis. [Becker,

17] yet at the same time, it is undeniable that party leaders at the very top have either protected

corrupted figures directly or at have relatives who are major business figures which therefore

inevitably results in conflict of interest. They have also sometimes taken direct part in the

corruption themselves.

A good example of investigation into the former is the Lai Changxing affair, Lai was a smuggler

who had connections with numerous members of the Communist party elite, many of whom

were implicated in aiding and abetting his smuggler activities. [Oliver, 10] The government was

able to assemble a task force to prosecute many of those officials, while some officials were

punished (i.e the deputy mayor of Xiamen was sentenced to death), many of those suspected

were protected by men at the very top of the CCP. Liu Huqing, song of a PLA general, for

instance, was believe to be protected by premier Li Ping during the investigations, while

suspected politburo member Jia Qinglin was believed to have being protected by Jiang Zemin


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himself. [Oliver, 210]

What this establishes is a precedent in which, despite rhetoric from the top about ending

corruption, even members of the standing committee protects their clients and friends from

corruption persecution, even in very highly publicized cases. Any anti-corruption agency on the

Singapore model would presumably need to be dependent on political power at the center,

because thats precisely the case with Singapores CIPBwhich is under the Prime Ministers

office, thus making it extremely doubtful that there wouldnt be political interference with the

agency from party chiefs.

A case of party chiefs directly involving themselves in corruption is the case of Shanghai mayor

and Politburo member Chen Liangyu. Chen was convicted of taking bribes, financial fraud and

other charges. While on the surface it was a triumph to convict such a high ranking leader of

corruption, the case was tainted by rumors that it was done for political purposes. [Brown]

Specifically, that Chen was an ally of former president Jiang Zhemin and current president Hu

Jintao was taking an opportunity to purge a political opponent. While it is hard to decipher to

what degree it was political, the mere impression that the case was politically motivated

undermines the credibility of anti-corruption efforts. One of the fundamental requirements for

effectiveness of ACBs is for investigations not to be political. Nor is Chen the only case of this,

recently Bo Xilai was dismissed on corruption charges in what is widely regarded as a political

move.

Singapore managed to avoid similarly pitfalls; this might be because the PAP rapidly started to

build up an effective and comprehensive anti-corruption strategy as soon as they took power in

1959. The previously ineffective CPIB (Singapores ACB) was given more powers starting in

1960, when they were granted the power to arrest persons and numerous anti-corruption


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legislations were also enacted to support them. In 1963 the CPIB was transferred to the prime

Ministers office to give it more independence. The CPIB was able to make one of its first high

profile case in 1966 when it removed Tan Kia Gan, the minister for national development from

the government. Later it was able to achieve numerous other high profile conviction such as the

imprisoning the minister of state for bribery, all without the implications of being a tool for

attacking political opponents. [Jon] Every single time it does so credibility is improved with the

public: which is fundamental in improving its effectiveness even further.

If we were to use 1979, the year which usually is acknowledged to mark the beginning of reform

and opening in China, as analogous to 1959 in Singapore, then China have already gone for

more than 40 years without enacting an effective ACB and accompanying anti-corruption

measures. What this means is that corruption has entrenched itself in the power elite unchecked.

Ultimately without democratization the ACB will have to report to someone in the CCP, probably

the standing committee. Since even presidents and premiers have shown themselves willing to

protect their relatives and clients from anti-corruption charges, and even Politburo members are

themselves corrupt, it is highly unlikely for the political will to manifest for allowing true

independence and effectiveness of the ACB anymore than that of current anti-corruption

measures. It is also hard to see the ACB not being used as a political tool for attacking

opponents of individual party chiefs or party factions, simply because current anti-corruption

measures are already being used for that purpose. The ACB would therefore simply become

part of the existing corrupted political framework. Not only that, but even if central politburo are

committed towards using the ACB effectively, they would still lack the credibility to mount an

effective anti-corruption campaign due to past failures and past misdeeds. This would still

undermine the potential ACB since the lack of credibility means that there would be limited

cooperation from the population in its efforts. It is the case that the corruption at the very highest

levels of the CCP has became so entrenched in the last 40 years that having the CCP


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leadership policing itself as the PAP effectively did is unlikely. In many ways, creating a new

ACB is simply too late, the CCP missed the opportunity for that at the start of the reform period.

This nulls conditions 1 and 3 on our list of preconditions.

The Question of Authority

It should be noted that China already has several anti-corruption agencies, the party disciplinary

commissions, the Ministry of Supervision, and the Procuratorate. Thus far, Chinas attempt at

creating an agency on Hong Kongs model has resulted in the National Corruption Prevention

Bureau. The NCPB however, is under the control of the ministry of supervision and therefore

unlikely to become truly independent and effective. [Becker]

Even if an ACB is created directly independently of any existing ministries or agencies, it still

has to engage in tug of wars with existing anti-corruption agencies. This is particularly important

in the area of jurisdiction and information gathering. [Becker] While perhaps not insurmountable,

it does add yet another stumbling block for any potential ACBs in establishes independence as

per condition 2.

Fragmented authoritarianism: Central-local conflict and agency independence

Both Hong Kong and Singapores Anti-corruption efforts were fairly centralized. [Heilbrunn]

Therefore, we must consider the question, how would Chinas ACB function away from the

urban center of Beijing? Indeed, if Chinas past experience is any indication, since Chinas

leadership likes to experiment locally in one area before implementing new policies elsewhere,

that an ACB will start at the local level. Indeed, China is already trying an ACB at the local level

in Guangdong. [Offices to unite in fight against graft]


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The issue with this is the nature of Chinas fragmented Authoritarian system in which different

government ministries and agencies end up fighting and bargaining with each other for power

and influence. What this means is that if new ACBs are created at a local level, they simply

become a player in local politics and are unlikely to gain enough authority to be effective. For

instance, the ACB would still depend on the court system to convict suspect they investigate

and persecution when the court system itself in China is quite corrupt. In this case the ACB

might very well end up having to negotiate and bargain with the courts in order to do its job,

which dilutes the agencys credibility since an effective ACB would need to be above those

types of politics. It also produces an interesting catch-22 situation: the ACB needs incorrupt

courts in order to function, yet a non-corrupt court system needs the ACB to function effectively

in order to rid it of corruption. Therefore the ACB at the local level seems unlikely to be

independent.

Conclusion

Hong Kong and Singapore both turned their societies from dens of corruption into two of the

cleanest in the world and are judged to be the only realistic models for China to follow. Both

cities adopted an anti-corruption bureau as a center part of their strategy. However, we have

seen that this same strategy is unlikely to be effectively implemented in China. The CCPs

desire to control the banking sector means it will have difficulty in reducing the opportunity for

corruption as part of a comprehensive strategy. If the ACB is to be tied to the center as in the

case of Singapore, then the already corrupt individuals at the center will likely use the ACB to

attack political opponents and also protect their allies from investigation. Due to bureaucratic

infighting and Chinas political model, the ACB is also unlikely to be independent.


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Therefore, there are no existing models for China to follow which would allow it to retain both an

authoritarian regime and to reign in corruption. While we cannot rule out that China might be

able to discover other methods for controlling corruption, authoritarian regimes over the last

decades have being trying to do so with remarkably few successes. The fact that China cannot

follow any of those successes means we must conclude, by the process of elimination, that it is

most likely that China must at least reach the level of flawed democracies in order to reduce its

corruption to manageable levels.


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Reference

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Nov,8, 2012http://finance.yahoo.com/news/hu-jintao-says-corruption-could-042509527.html

[2] Rock, Michael. Corruption and Democracy, Economic and Social Affairs, Aug 2007 Nov 2012http://www.un.org/esa/desa/papers/2007/wp55_2007.pdf

[3] Transparency international. "Corruption Perception Index Results." Transparency international, 2011.Web. Nov 4, 2012

[4] Economical Intelligence Unit. Democracy Index The Economist, 2011. Web. Nov 4, 2012 https://www.eiu.com/public/topical_report.aspx?campaignid=DemocracyIndex2011

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[6] Davison, Christopher Yes, the Gulf Monarchies are in trouble Foreign Policy Nov 13 2012 Web. Nov,14, 2012http://mideast.foreignpolicy.com/posts/2012/11/13/gulf_autocracy_in_question

[7] Quah, Jon, Combating Corruption Singapore Style: Lessons for other Asian countries MarylandSeries in Contemporary Asian Studies (2007) 1-48 Web Nov, 17, 2012http://digitalcommons.law.umaryland.edu/cgi/viewcontent.cgi?article=1188&context=mscas

[8] Hartcher, Peter Singapore a Model for Chinese Democracy, National Times, Oct 30 2012 Web. Nov,18, 2012 http://www.smh.com.au/opinion/politics/singapore-a-model-for-chinese-democracy-20121029-28fkc.html

[9] Pei, Minxin, Chinas Trapped Transition: The Limits of Developmental Autocracy, USA, First HarvardUniversity Press 2006 Print

[10] August, OliverInside the Red Mansion, on the Trail of Chinas Most Wanted Man, New YorkHoughton Mifflin 2007. Print

[11] Brown, Kerry Shanghai, and the Fall of Chen Liangyu: Corruption, Politics, or Both? ChatamHouse(Oct 2006) Webhttp://www.chathamhouse.org/sites/default/files/public/Research/Asia/bnchina1006.pdf

[12] Quah, Jon Corruption in Asian Countries Can it be Minimized Public Administration Review (Nov-Dec 1999) pp 483-494 Nov, 18, 2012,http://www.jstor.org/stable/pdfplus/3110297.pdf?acceptTC=true

[13] Heilbrunn, John Anti-Corruption Commissions Panacea or Real Medicine to Fight Corruption WorldBank pp 1-22 Institute (2004) Nov, 18, 2012,http://siteresources.worldbank.org/WBI/Resources/wbi37234Heilbrunn.pdf

[14] Unknown, Offices to unite in fight against graft China Daily Sept, 11, 2012 Web. Sept 11,2012http://www.chinadaily.com.cn/china/2012-09/11/content_15748648.htm
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