Wednesday, April 29, 2020

SOURCE:

https://www.tandfonline.com/doi/full/10.1080/10670564.2012.734080

Party Manages Cadre: limits of Local People's Congress supervision and reform in China

Along with shareholders and government administration, the third source of political control of Chinese listed firms is the Communist Party of China (CPC). The firm’s party committee, which is commonly staffed with hand-picked executives, channels state policy into corporate practice. The party committee has control over the board of directors (“the party supervises the cadre”), although the party committee does not have the power to decide on the appointment and dismissal of key personnel.

In 1995, the CCCPC institutionalized the leadership recruitment via the Interim Regulation on the Recruitment of Party Cadre and State Leadership (The Department of Organization of the CCCPC 1995). The worldview, “party manages cadre and government leaders” was listed as the top principle. This principle implies that leaders are responsible to the party only, not the public.

At the provincial level, Department of Supervision handles official businesses jointly with the provincial CPC Commission for Discipline Inspection to implement the system of one set of working mechanism and two organs, and performs two kinds of functions, i.e. the Party discipline inspection and governmental administrative supervision.

The main responsibilities are responsible for carrying out the decisions of the CPC Central Committee, CPC Central Commission for Discipline Inspection and the Provincial Party Committee on enhancing the Party work style and clean government building, implementing the supervision within the prescribed limit of Party constitution, maintaining the Party constitution and internal laws and regulations of the Party, inspecting the execution of the Party's routes, guidelines, policies and decisions.

China's Company Law (Article 17) provides that “the activities of the local branch units of the Chinese Communist Party (CCP) shall be carried out in accordance with the Constitution of the CCP,” which grants the local party committee the rights “to supervise party cadres and any other personnel.” The principle that the Party manages cadres, mainly refers to how the party committees at various levels adhere to and implement the cadre line and policies, select and employ cadres strictly in accordance with the principles of the Party.

The Party Constitution says that one important obligation of Party members is to play a "vanguard role" in production, work, study and social life. The CPC has boosted training to Party cadres and members since the concept of "pro-learning Party" was conceived at the 16th Party Congress held in 2002. The concept requires the CPC to keep pace with time through constant learning.

In the past, CPC members in non-state-owned companies were not willing to identify themselves as Party members. Now, Party members tend to identify themselves as a CPC members. The reason for the change is the central leadership's emphasis on Party governance in companies and the Party members' exemplary and significant role in the work.

The education given to Communist cadres entails Party spirit, Marxism theory and Party-building practices. This particularly capitalizes on its rich "red resources" as being a red base of China's Communism. For Party spirit education, trainees are asked to ponder over questions such as: how to hold on to Communist ideals and beliefs in the new era; how to improve relations with the masses; and how to exercise self-discipline and avoid corrupt practices.

The 17th National Congress of the Communist Party of China in October 2007 put forward a plan to firmly encourage, support and guide the development of non-government-owned businesses. With the continuous deepening of reform and opening up and the gradual improvement of the socialist market economy, non-public companies are increasingly demonstrating their unique advantages and huge potential to develop.

The open recruitment of Party secretaries (also known as "red CEOs") for private enterprises normalized a system to hire leading posts for Party organizations in non-public companies. In reality, some heads for Party organizations in private firms struggle for power with enterprise managers, and cannot correctly understand and properly handle the relationship between themselves and business owners. In addition, some of them lack knowledge of the market economy as well as business management knowledge. Although they can do Party work, they are less flexible. Finally, some of them cannot correctly understand and properly handle the relationship between the Party building and helping businesses make profits. These are the constraints of Party building in the non-public enterprises.

On 05 June 2015 Chinese President Xi Jinping called for the strengthening of Communist Party leadership at state-owned enterprises (SOEs). In October 2016 Xi Jinping stressed the Communist Party of China's (CPC) unswerving leadership over state-owned enterprises (SOEs) during a national meeting on building the role of the Party within SOEs. “Party leadership and building the role of the party are the root and soul for state-owned enterprises,” said Xi, who is also the party's general secretary. While ordering strengthened grassroots Party organs in SOEs, the president warned that the leading role of Party organizations in SOE personnel selection must not change and efforts should be made to cultivate a number of quality corporate executives.

The distinction between China's state-owned and private firms is not always as clear-cut as it might seem. A company's formal status can be misleading. And the Communist Party is everywhere: article 19 of China's company law states that a party cell must be set up in every firm above a certain size. Larger firms must have a Party cell, whose leader reports directly to the Party at the municipal or provincial level. Party organs at non-state-run firms served as the party’s fortress and political core for employees.

China's Communist party is making clear that it expects to dictate business decisions — not only at state-owned enterprises, but also at private companies and joint ventures with foreign partners. Under President Xi Jinping, the party has become more assertive. China's Communist party is writing itself into the articles of association of many of the country's biggest companies in a blow to investor hopes.

A push to establish the Communist Party in Chinese state enterprises is rolling through Hong Kong, raising corporate-governance concerns. China will continue to “deepen” reform of state-owned enterprises and experiment with new ownership structures, but strengthening ruling Communist Party leadership remains the guiding principle. The state-owned enterprises in China contain 10,000,000 Communist Party members and 800,000 party committees.

Multinationals operating in China have party committees. Party consultants help private companies integrate party work. The old rule that any organisation with three or more party members should set up a party cell is being enforced. China's Communist party is making clear that it expects to dictate business decisions — not only at state-owned enterprises, but also at private companies and joint ventures with foreign partners.

The presence of party units has long been a fact of doing business in China, where the law requires companies, including foreign firms, to set up a party organization. Many executives had long seen the measure as symbolic. Party cells in foreign firms were well-received as a way of helping them understand Chinese policies and resolving disputes, CCP Organization Department deputy head Qi Yu told a news conference on the sidelines of the party’s 19th National Congress in Beijing. “Senior executives at some foreign invested companies say party organizations can help them to understand in a timely manner Chinese policies, to resolve salary disputes and to provide positive energy for the company’s development,” Qi said.

The education campaign which kicked off in February 2016 sought to encourage all Party members to study theoretical and practical issues related to Party-building. As the 19th Session of the National Congress of the Communist Party of China (CPC) approaches, Party-building activities of all kinds were held at CPC branches nationwide. Previously 'Party activities' simply meant attending meetings and studying reading materials, and some members did not actively get involved. Now there are various forms of Party work and Party members call early to ask about the activity every month.

Classes focus on studying the speeches of General Secretary of the CPC Central Committee Xi Jinping and enhancing the members' Party spirit. They boost this spirit by singing red songs; visiting patriotic sites like Lugou Bridge, where Japan's full-scale invasion of China kicked off; visiting an exhibition named "The Road of Rejuvenation" about China's rise; and watching anti-corruption documentaries.

While members could easily skip Party branch activities before, they are now required to take part in each session. They do not only need to show up for classes and meetings, but also need to study for enough hours and take notes in a special notebook. The regular activities no doubt remind people that they are a Party member and enhance their sense of identity.

By 2017 West Nanjing Road subdistrict in central Shanghai, which is home to a large number of regional headquarters of leading multinationals, had witnessed the development of Party organizations. The Party working committee in the subdistrict was responsible for the operation of 93 Party organizations in multinational companies, including eight general branches, 51 independent branches and 34 united branches. In total, these Party organizations oversee 1,587 Party members in 289 multinational companies.

In July 2017, executives from more than a dozen top European companies in China met in Beijing to discuss their concerns about the growing role of the party in their local operations. One senior executive whose company was represented at the meeting said that some firms were under “political pressure” to revise terms of their joint ventures with state-owned partners to allow the party the final say over business operations and investment decisions. Party officials are tightening their control over state-owned enterprises and want a voice in how some foreign companies are run.

At least 32 Chinese companies with shares traded in Hong Kong have proposed changes to their legal structure to make the party an adviser to their board. Financial commentators complain this might hurt shareholders.

According to the Party constitution, as long as there are three Party members, a primary Party organization should be formed. But in foreign countries, this will depend on each country's laws and regulations. Party members at overseas branches are required to hand in a report about their thoughts every three months, participate in a group Party activity and hold a Party meeting once every half-year, then report their activities to the university's politics department.

Zheng Xuexuan, vice president of the China State Construction Engineering Corporation, the largest construction company in China by revenue with projects worldwide, wrote on Guangming Daily that the need for Party building in overseas branches is urgent. "When employees leave their hometown and motherland for a long time and live in a strange environment … it is easy for their thoughts to fluctuate, posing challenges to the ideological and political work," he wrote.

Many State-owned enterprises (SOEs) that are dual-listed or listed in multiple markets must further strengthen their efforts on communication and explanatory work to gain more recognition and support over the matter of putting the Party construction clauses in writing in company articles, a senior official at the country's securities market watchdog said.

"Putting contents on the Communist Party of China's (Party) construction into company's articles of association is an important step for the fusion of the leadership of the Party into corporate governance and efforts in building a modern enterprise system with Chinese characteristics," said Yan Qingmin, vice-chairman of the China Securities Regulatory Commission, at a May 2018 industry meeting.

By June 2018 the government was pushing domestically listed companies to strengthen Party building, according to an amendment on governance regulations for domestically listed companies. Domestic listed companies should take on social responsibilities, even though the economic returns may not be evident in the short term. China's securities watchdog, the China Securities Regulatory Commission (CSRC), was seeking public opinion about the amendment, according to a statement published on the official website of the CSRC on 15 June 2018.

According to the new amendment, State-owned listed companies should include Party-building work in their corporate statutes, and companies should integrate Party leadership and corporate governance.

Dong Shaopeng, an expert advisor for the CSRC, told the Global Times on 18 June 2018 that leading companies in any country should take on social responsibility, including political responsibilities. "Companies have social attributes. They should not ignore social interests in the course of their development," he said.

According to Dong Shaopeng, Party building is not just about developing Communist Party members within the companies or planning activities. "It's about letting outstanding people, those with good political awareness and good technical abilities, bring their talent into full play in the management structure and production chain of companies," he said.

Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology, said that Party member workers can help set a good example for other workers and spark their enthusiasm for work.

According to a report from Shanghai-based thepaper.cn on 18 June 2018, a listed company Party-building alliance was launched on 15 June 2018 in Wenling of East China's Zhejiang Province to promote the upgrading of listed companies.

Party Manages Cadre

In 1995, the CCCPC institutionalized the leadership recruitment via the Interim Regulation on the Recruitment of Party Cadre and State Leadership (The Department of Organization of the CCCPC 1995). The worldview, “party manages cadre and government leaders” was listed as the top principle. This principle implies that leaders are responsible to the party only, not the public.

China's Company Law (Article 17) provides that “the activities of the local branch units of the Chinese Communist Party (CCP) shall be carried out in accordance with the Constitution of the CCP,” which grants the local party committee the rights “to supervise party cadres and any other personnel.” The principle that the Party manages cadres, mainly refers to how the party committees at various levels adhere to and implement the cadre line and policies, select and employ cadres strictly in accordance with the principles of the Party.

The education given to Communist cadres entails Party spirit, Marxism theory and Party-building practices. This particularly capitalizes on its rich "red resources" as being a red base of China's Communism. For Party spirit education, trainees are asked to ponder over questions such as: how to hold on to Communist ideals and beliefs in the new era; how to improve relations with the masses; and how to exercise self-discipline and avoid corrupt practices.

According to the new amendment, State-owned listed companies should include Party-building work in their corporate statutes, and companies should integrate Party leadership and corporate governance.

Monday, April 27, 2020

When will Covid-19 Outbreak End in India? Researchers risk a May Date

SOURCE:
( A ) https://www.medicinenet.com/script/main/art.asp?articlekey=228841

( B ) https://www.indiatoday.in/coronavirus-outbreak/story/when-will-covid-19-outbreak-end-in-india-researchers-risk-a-may-date-1671533-2020-04-27

Coronavirus Outbreak

When will Covid-19 outbreak end in India? Researchers risk a May date

When will Covid-19 Outbreak End in India? Researchers risk a May Date

Prabhash K Dutta

New Delhi

April 27, 2020

Researchers in Singapore have prepared a mathematical model to predict when Covid-19 pandemic will end in different countries. The model predicts India will see 97 per cent decline by May 22.

Nationwide coronavirus lockdown has left people struggling to maintain supplies of essentials in their homes. As India prepares for graded lifting of coronavirus lockdown, researchers in Singapore have predicted that Covid-19 will end by 97 per cent in the country by May 22. (Photo: PTI)

HIGHLIGHTS

Researchers in Singapore have predicted end of Covid-19 outbreak in India by May 22
End dates for India, 97 per cent by May 22, 99 per cent by June 1 and 100 per cent by July 26
SIR model developed by researchers predict Covid-19 to continue in world till early December

Sitting in homes due to lockdown forced by novel coronavirus pandemic, millions of people in India and across the world have this question on top of their mind: when will Covid-19 end?

Researchers in Singapore have risked answering this question.

On the basis of the pattern of spread of Covid-19 from China to the rest of the world and slowing down, the researchers in Singapore have a predicted date for 131 countries each when novel coronavirus outbreak will end there.

Covid-19 will end in India around May 21-22, the researchers said. This is the time when novel coronavirus infection will be 97 per cent down compared to April 20, which they found as the turning date.

This is close to what the Indian Council for Medical Research (ICMR) hinted last week. ICMR director Dr Balram Bhargava had said, "One can say we have been able to flatten the curve."

The ICMR said the positivity rate has been stable at around 4.5 per cent in India in recent weeks. This stable rate of spread of Covid-19 could be a signal of India having passed the turning date, estimated by the Singaporean researchers.

Their mathematical model predicts that by June 1, India will have cured 99 per cent of Covid-19 cases. And, the novel coronavirus will be eliminated by July 26 from India, the researchers estimated.

Covid-19 progress graph for India based on SIR

model, developed by researchers in Singapore

This will, however, sounds optimistic given the scale of the surge in big Indian states and cities - Mumbai and Pune in Maharashtra, Delhi, Jaipur in Rajasthan and Indore in Madhya Pradesh among others. On the other hand, four states though smaller in size of the population -- Goa, Tripura, Manipur and Arunachal Pradesh -- have become free of Covid-19.

However, there is strong corroboration for the model, called the SIR (susceptible-infected-recovered) model. It estimated February 8 to be turning date for China, and February 27 as End-97 per cent date.

On the ground, China on February 19 reported the lowest number of fresh coronavirus infection in a month, indicated that the country was past the turning date.

The SIR model had March 4 as End-99 per cent date for China, which on March 7 reported 99 fresh Covid-19 cases, the first below 100 daily cases since the outbreak.

April 9 was End-100 per cent date for China. It has not happened in a strict sense of the term as China continues to report new cases. But, it was on April 8 that China allowed people to leave Wuhan, the Covid-19 ground zero, for the first time since it enforced lockdown in January.

Also, China has said that almost all the new Covid-19 cases in recent weeks are imported. On April 25, China said it recorded just one local novel coronavirus infection case in 10 days. Others were imported Covid-19 cases.

The SIR model is very close to the ground situation in China. This research prediction brings some hope for Indians.

However, the researchers have themselves warned that "the model behind our prediction is only theoretically suitable for one-stage epidemic. The prediction is also conditioned by the quality of the data."

According to this mathematical model, Covid-19 will end in early December this year.

But this does not come without a note of caution. "The reality is the future is always uncertain. No one predicted the Covid-19 outbreak in October or November 2019, although Bill Gates famously warned about the potential damage of a global infectious disease to the world during a TED Talk in 2015," Jianxi Luo, the writer of the research paper said.

Read | Coronavirus cases in India cross 27,000-mark, 872 deaths: 10 points

Also read | Covid Toes among kids: New symptom of novel coronavirus infection

More on Covid-19 | How coronavirus behaves in body and why Covid-19 is difficult to treat

Watch | From the rooftops: How Indians are spending time at home

Sunday, April 26, 2020

CHINA ECONOMICS Corruption in China (r)

SOURCE:
https://en.wikipedia.org/wiki/Corruption_in_China

Corruption in China

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Corruption in China post-1949 refers to the abuse of political power for private ends typically by members of the Communist Party of China, who hold the majority of power in the country. Corruption is a very significant problem in China,^[1] impacting all aspects of administration, law enforcement,^[2] healthcare^[3] and education.^[4] Since the Chinese economic reforms began, corruption has been attributed to "organizational involution"^[5] caused by the market liberalization reforms initiated by Deng Xiaoping. Like other socialist economies that have undertaken economic reforms, such as post-Soviet Eastern Europe and Central Asia, reform-era China has experienced increasing levels of corruption.^[6]

Transparency International's 2017 Corruption Perception Index ranks the country 77th place out of 180 countries.^[7] Means of corruption include graft, bribery, embezzlement, backdoor deals, nepotism, patronage, and statistical falsification.^[8]

Public surveys on the mainland since the late 1980s have shown that it is among the top concerns of the general public. According to Yan Sun, Associate Professor of Political Science at the City University of New York, it was cadre corruption, rather than a demand for democracy as such, that lay at the root of the social dissatisfaction that led to the Tiananmen Square protests of 1989.^[6] Corruption undermines the legitimacy of the CPC, adds to economic inequality, undermines the environment, and fuels social unrest.^[9]

Since the Tiananmen Square Massacre, corruption has not slowed down as a result of greater economic freedom, but instead has grown more entrenched and severe in its character and scope. Business deals often involve corruption.^[10] In popular perception, there are more dishonest CPC officials than honest ones, a reversal of the views held in the first decade of reform of the 1980s.^[6] China specialist Minxin Pei argues that failure to contain widespread corruption is among the most serious threats to China's future economic and political stability.^[9] He estimates that bribery, kickbacks, theft, and waste of public funds costs at least three percent of GDP.

Cadre corruption in China has been subject to significant media attention since Communist Party General Secretary Xi Jinping announced his anti-corruption campaign following the 18th National Congress which was held in November 2012.^[11] Many high ranking government and military officials have been found guilty of corruption because of this campaign.

Imperial China

The spread of corruption in traditional China is often connected to the Confucian concept of renzhi (人治; rénzhì; 'Rule of the people') as opposed to the legalist "rule of law" (法治; Fǎzhì). Profit was despised as preoccupation of the base people, while the true Confucians were supposed to be guided in their actions by the moral principle of justice (义; 義; yì). Thus, all relations were based solely on mutual trust and propriety. As a matter of course, this kind of moral uprightness could be developed only among a minority. The famous attempt of Wang Anshi to institutionalize the monetary relations of the state, thus reducing corruption, were met with sharp criticism by the Confucian elite. As a result, corruption continued to be widespread both in the court (Wei Zhongxian, Heshen) and among the local elites, and became one of the targets for criticism in the novel Jin Ping Mei. Another kind of corruption came about in Tang China, developed in connection with the imperial examination system.

In the late Ming dynasty, robust international trade brought an influx of silver into China, enriching merchants and becoming a target of government officials. In the early 1600s, literary works like The Book of Swindles created typologies of fraud, including categories such as "Government Underlings" and "Corruption in Education."^[12]

Republican Era

The widespread corruption of the Kuomintang, the Chinese Nationalist Party, is often credited as being an important component in the defeat of the KMT by the Communist People's Liberation Army. Though the Nationalist Army was initially better equipped and had superior numbers, the KMT's rampant corruption damaged its popularity, limited its support base, and helped the communists in their propaganda war.

PEOPLE'S REPUBLIC OF CHINA

Getting high quality, reliable, and standardised survey data on the severity of corruption in the PRC is enormously difficult. However, a variety of sources can still be tapped, which "present a sobering picture," according to Minxin Pei, an academic with expertise on Chinese affairs.^[13]

Official deviance and corruption have taken place at both the individual and unit level since the founding of the PRC. Initially the practices had much to do with the danwei (simplified Chinese: 单位; traditional Chinese: 單位; pinyin: dān wèi) (literally, "unit") system, an outgrowth of communist wartime organs.^[14] In the PRC the reforms of Deng Xiaoping were much criticized for making corruption the price of economic development. Corruption during Mao's reign also existed, however.^[15]

Emergence of the private sector inside the state economy in post-Mao China has tempted CPC members to misuse their power in government posts; the powerful economic levers in the hands of the elite has propelled the sons of some party officials to the most profitable positions. For this, the CPC has been called the "princelings' party" (Chinese: 太子党; pinyin: taizidang), a reference to nepotistic corruption in some periods of Imperial China. The relatives of several prominent political leaders are reported to have generated large personal wealth in business, including relatives of former Premier Wen Jiabao,^[16] Current CPC general secretary Xi Jinping,^[17] and former Chongqing party secretary Bo Xilai.^[18] Attacking corruption in the Party was one of the forces behind the Tiananmen protests of 1989.^[19]

The politically unchallenged regime in China creates opportunities for cadres to exploit and control the rapid growth of economic opportunities; and while incentives to corruption grow, effective countervailing forces are absent.^[20]

Both structural and non-structural corruption has been prevalent in China. Non-structural corruption exists around the world, and refers to all activities that can be clearly defined as "illegal" or "criminal," mainly including different forms of graft: embezzlement, extortion, bribery etc. Structural corruption arises from particular economic and political structures; this form is difficult to root out without a change of the broader system.^[14]

Weak state institutions are blamed for worsening corruption in reform-era China. New Left scholars on China criticise the government for apparent "blind faith" in the market, and especially for its erosion of authority and loss of control of local agencies and agents since 1992. Others also see strong links between institutional decline and rising corruption.^[21] Corruption in China results from the Party-State's inability to maintain a disciplined and effective administrative corps, according to Lü Xiaobo, Assistant Professor of Political Science at Barnard College. The Chinese reform-era state has also been an enabling factor, since state agencies have been granted regulatory power without institutional constraints, allowing them to tap into new opportunities to seek profits from the rapid growth in businesses and the economy. This takes place at both the departmental and individual level.^[22] Corruption here is part of the dilemma faced by any reforming socialist state, where the state needs to play an active role in creating and regulating markets, while at the same time its own intervention places extra burdens on administrative budgets. Instead of being able to reduce the size of its bureaucratic machinery (and therefore opportunities for corruption), it is instead pressed to expand further. Officials then cash in on the regulatory power by "seeking rents."^[23]^[24]

In 2010, in a rare move due to its perceived impact on stability, Li Jinhua, vice-chairman of the National Committee of the Chinese People’s Political Consultative Conference (NCCPPCC) and former long-serving auditor general of the National Audit Office, fired a warning shot in the People's Daily, calling for better legal structures and greater supervision over the business dealings of officials and their children. He said the rapidly growing wealth of Communist officials’ children and family members "is what the public is most dissatisfied about".^[19]

According to a January, 2014 investigation by the International Consortium of Investigative Journalists more than a dozen family members of China's top political and military leaders are linked to offshore companies based in the British Virgin Islands. The report shows that the brother-in-law of China's current Paramount leader, Xi Jinping and the son-in-law of former premier Wen Jiabao are amongst those making use of offshore financial havens to avoid tax and transfer money overseas.^[25] ^[26] The Golden Shield Project has blocked foreign news sites that have reported on the scandal.^[27]

Among the targets of the anti-corruption campaign since 2012 are Yao Gang, Vice-Chairman at the China Securities Regulatory Commission (CSRC), China’s top security regulator.^[28]^[29] He was investigated by the Communist Party of China's anti-graft agency in November 2015, after a stock market rout rocked global markets.^[30]

PUBLIC PERCEPTIONs

Opinion surveys of Party officials and Chinese citizens over recent years set identify corruption as one of the public's top concerns. Every year researchers at the Central Party School, the CPC organ that trains senior and midlevel officials, survey over 100 officials at the school. Between 1999 and 2004 respondents ranked corruption as either the most serious or second most serious social problem.^[9] Similarly, in late 2006 the State Council’s Development Research Center asked 4,586 business executives (87 percent in nonstate firms) to rate their local officials in terms of integrity. Almost one-quarter said that their local officials were “bad”; 12 percent said they were “very bad.”^[9]

In a commercial environment, corruption may be prevalent because many employees are not loyal to their employers, seeing themselves as "free-agent entrepreneurs" first and foremost.^[31] They use their employers as a way to make money, both for themselves and for their "guanxi social-circle network." The imperative of maintaining this social circle of benefits is seen as a primary goal for many involved in corruption.^[31]

Official corruptions are among the populace's greatest gripes against the regime. One folk saying vividly illustrates how the public sees the issue, according to Yan Sun: "If the Party executes every official for corruption, it will overdo a little; but if the Party executes every other official for corruption, it cannot go wrong."^[6] In contemporary China, bribe taking has become so entrenched that one party secretary in a poor county received repeated death threats for rejecting over 600,000 Renminbi in bribes during his tenure. In 1994, in another area officially designated "impoverished," a delegation of the UN Food and Agriculture Organization arrived for a conference on development, but upon seeing rows of imported luxury cars outside the conference site asked the local officials "Are you really poor?"^[6] A rare online opinion poll in 2010 by the People’s Daily found that 91% of respondents believe all rich families in China have political backgrounds.^[19]

The high corruption rates in China has been blamed by many as a result of the political system in which public service officials are not elected by the general public.

Means

Broadly defined, three types of corruption are common in China: graft, rent-seeking, and prebendalism.^[32]

Graft is the most common and refers to bribery, illicit kickbacks, embezzlement, and theft of public funds. Graft involves something of value given to, and accepted by, public officials for dishonest or illegal purposes. It includes officials spending fraudulently or using public funds for their own benefit.^[32]

Rent-seeking refers to all forms of corrupt behaviour by people with monopolistic power. Public officials, through granting a license or monopoly to their clients, get "rents"—additional earnings as a result of a restricted market. Rent-seeking happens when officials grant rents to those in their favor.^[32] This is akin to cronyism. In the Chinese case, public officials are both rent-generators and rent-seekers, both making rent opportunities for others and seeking such opportunities to benefit themselves. This may include profiteering by officials or official firms, extortion in the form of illicit impositions, fees, and other charges.^[32]

Prebendalism refers to when incumbents of public office get privileges and perquisites through that office.^[32] Controlling an office entitles the holder to rents or payments for real or fake activities, and organizations are turned from places of work into "resource banks" where individuals and groups pursue their own interests. Prebendal corruption doesn't necessarily need to be about monetary gain, but may include usurpation of official privilege, backdoor deals, clientelism, cronyism, nepotism.^[32]

Corruption in the PRC has developed in two major ways. In the first mode, corruption is in the form of ostensibly legal official expenditure, but is actually wasteful and directed toward private benefits. For example, the increasing number of local governments building massive administrative office buildings that resemble luxurious mansions.^[13] At the same time, many corrupt local officials have turned their jurisdictions into virtual “mafia states,” where they collude with criminal elements and unsavory businessmen in illegal activities.^[13]

While the state and its bureaucrats are major players in the reform-era economy, new interests and concentrations of economic power have been created, without legitimate channels between administrators and entrepreneurs.^[20] A lack of regulation and supervision has meant these roles are not clearly demarcated (Lü Xiaobo in his text titles one section "From Apparatchiks to Entrepreneurchiks").^[33] Illicit guandao enterprises formed by networks of bureaucrats and entrepreneurs are allowed to grow, operating behind a facade of a government agency or state-owned enterprise, in a realm neither fully public nor private.^[20] More recently, Ben Hillman has shown how official corruption is facilitated by intrastate patronage networks. According to Hillman, patronage networks 'grease the wheels' of a dysfunctional bureaucracy while simultaneously extracting spoils for the private benefit of their members. Patronage networks also protect transgressors from intrusion by the Party-state's disciplinary agencies. Hillman's study of patronage networks helps to explain how corruption and economic development have been able to coexist in China.^[34]

The PLA has also become a major economic player, and participant in large- and small-scale corruption at the same time. Inconsistent tax policy, and a politicised and poorly organised banking system, create ample opportunities for favouritism, kickbacks, and "outright theft," according to Michael Johnston, Professor of Political Science at Colgate University in Hamilton, New York.^[20]

Corruption has also taken the form of collusion between CPC officials and criminal gangs. Often hidden inside legitimate businesses, gangs had infiltrated public offices and worked closely with the police.^[35] The Telegraph quoted an employee of a state company saying: "In fact, the police stations in Chongqing were actually the centre of the prostitution, gambling and drugs rackets. They would detain gangsters from time to time, and sometimes send them to prison, but the gangsters described it as going away for a holiday. The police and the mafia were buddies." In some cases, innocents were hacked to death and dismembered by roaming gangs whose presence was allowed by regime officials, according to the Telegraph.^[35]

Some officials have been complicit in sex trafficking in China.^[36]^[37]

Housing[edit]

China's housing boom, and the shift of central government policy towards social housing, are providing officials more ways to siphon off properties for personal gain. The Financial Times cites a number of public scandals involving local officials in 2010: for example, in province, eastern China, a complex of 3,500 apartments designated as social housing in Rizhao, Shandong, was sold to local officials at prices 30-50 per cent below market values. It said in Meixian, Shaanxi, around 80 per cent of the city’s first social housing development, called Urban Beautiful Scenery, went to local officials. In Xinzhou, Shanxi, a new complex of 1,578 apartments on the local government’s list of designated social housing was almost entirely reserved for local officials, many were 'flipped' for tidy profits even before construction was completed. Jones Lang LaSalle said that transparency about the plans for affordable housing was severely lacking.^[38]

Effects

Whether the effects of corruption in China are solely positive or negative is a subject of hot debate. Corruption favors the most connected and unscrupulous, rather than the efficient, and also creates entry barriers in the market for those without such connections. Favors are sought for inefficient subsidies, monopoly benefits, or regulatory oversight, rather than productive activity.^[39] Bribes also lead to a misdirection of resources into wasteful or poor-quality projects. Further, since corrupt payments are usually done in secrecy, they are more likely to be used in the same way, driving the proceeds of illegal transactions into foreign bank accounts. Such capital flight costs national growth.^[39] Centralised corruption also carries with it the same defects, according to Yan. Rent seeking, for example, is costly to growth because it prevents innovation. Rent seeking activities are also self-sustaining, since such activity makes it seem more attractive compared to productive activity. Corruption is never a better option to honest public policy, Yan Sun argues, and it distorts and retards development.^[40]

Others, including local officials, play down the negative impacts of corruption, and local cadres frown on anti-corruption efforts for three reasons: [a] a preoccupation with rooting out corruption may lead to cautiousness about new practices; [b] corruption may act as a "lubricant" to "loosen up" the bureaucracy and facilitate commercial exchanges; [c] and thirdly, corruption is a necessary trade-off and inevitable part of the process of reform and opening up.^[41] They argue that the destructiveness of corruption in the Chinese context helps transfer or reallocate power from officials, perhaps even enabling the rise of a "new system" and acting as a driving force for reform.^[42]

Nevertheless, the deleterious effects of corruption were documented in detail in Minxin Pei's report. The amount of money stolen through corruption scandals has risen exponentially since the 1980s, and corruption in China is now more concentrated in the sectors the state is heavily involved with.^[9] These include infrastructure projects, real estate, government procurement, and financial services. The lack of a competitive political process means these are high-risk areas for fraud, theft, and bribery; Pei estimates the cost of corruption could be up to $86 billion per year.^[9]

Corruption in China also harms Western business interests, in particular foreign investors. They risk human rights, environmental, and financial liabilities, at the same time squaring off against rivals who engage in illegal practices to win business.^[9]

Long term, corruption has potentially "explosive consequences," including widening income inequalities within cities and between city and countryside, and creating a new, highly visible class of "socialist millionaires," which further fuels resentment from the citizenry.^[20]

Ordinary Chinese are oftens the victims in official corruption, as in the case of Hewan village in Jiangsu province, where 200 thugs were hired to attack local farmers and force them off their land so Party bosses could build a petrochemical plant. Sun Xiaojun, the party chief of Hewan village, was later arrested. One farmer died.^[43] Officials themselves are increasingly victims of official corruption when they target each other out of jealousy, hunger for promotion: there have been high-profile cases of mainland bureaucrats employing hit men or launching acid attacks on rivals. In August 2009, a former director of the Communications Bureau in Hegang, Heilongjiang, who hired hitmen to kill his successor, supposedly because of the latter's ingratitude, was given the death penalty.^[44]

Counter Measures

The CPC has tried a variety of anti-corruption measures, constructing a variety of laws and agencies in an attempt to stamp out corruption, but almost none have been proven to be even mildly effective.

In 2004, the CPC devised strict regulations on officials assuming posts in business and enterprise. The Central Commission for Discipline Inspection and the Central Organization Department issued a joint circular instructing Party committees, governments and related departments at all levels not to give approval for Party and government officials to take up concurrent posts in enterprises.^[45] Law 395 related to the illicit enrichment of public officials was also enacted.

In 2007 Chinese authorities established a National Corruption Prevention Bureau, focused primarily on gathering information and intra-agency coordination. Unlike the Ministry of Supervision, Procuratorate, or CCDI, the NCPB was focused on "implementing preventive measures, monitoring the transfer of assets across organizations, facilitating and promoting information sharing between agencies, and policing corrupt practices within the non-governmental sphere, including private enterprises, social organizations and NGOs."^[46] The lack of independence of the NCPB however meant that its impact on actual corruption was limited.

The Anti-Unfair Competition Law prohibits commercial bribery punishable by economic and administrative sanctions. It is prohibited to give or receive bribes in the course of selling or purchasing goods. In case of misconduct, companies are fined in between 10.000 RMB and 200.000 RMB The Criminal Law of China prohibits giving and receiving property to obtain an undue benefit, with penalties including fines, confiscation of property, imprisonment or death. Such measures are largely ineffective, however, due to the insufficient enforcement of the relevant laws.^[13] Further, because the Central Commission for Discipline Inspection largely operates in secrecy, it is unclear to researchers how allegedly corrupt officials are disciplined and punished. The odds for a corrupt official to end up in prison are less than three percent, making corruption a high-return, low risk activity. This leniency of punishment has been one of the main reasons corruption is such a serious problem in China.^[13]

While corruption has grown in scope and complexity, anti-corruption policies, on the other hand, have not changed much.^[20] Communist-style mass campaigns with anti-corruption slogans, moral exhortations, and prominently displayed miscreants, are still a key part of official policy, much as they were in the 1950s.^[20]

In 2009, according to internal Party reports, there were 106,000 officials found guilty of corruption, an increase of 2.5 percent on the previous year. The number of officials caught embezzling more than one million RMB (US$146,000) went up by 19 percent over the year. With no independent oversight like NGOs or free media, corruption has flourished.^[47]

These efforts are punctuated by an occasional harsh prison term for major offenders, or even executions. But rules and values for business and bureaucratic conduct are in flux, sometimes contradictory, and “deeply politicized.”^[20] In many countries systematic anti-corruption measures include independent trade and professional associations, which help limit corruption by promulgating codes of ethics and imposing quick penalties, watchdog groups like NGOs, and a free media. In China, these measures do not exist as a result of the CPC’s means of rule.^[20]

Thus, while CPC disciplinary organs and prosecutorial agencies produce impressive statistics on corruption complaints received from the public, few citizens or observers believe corruption is being systematically addressed.^[20]

There are also limits to how far anti-corruption measures will go. For example, when Hu Jintao's son was implicated in a corruption investigation in Namibia, Chinese Internet portals and Party-controlled media were ordered not to report on it.^[48]

At the same time, local leaders engage in "corruption protectionism," as coined by the head of the Hunan provincial Party Discipline Inspection Commission; apparatchiks thwart corruption investigations against the staff of their own agencies, allowing them to escape punishment. In some cases this has impelled high-ranking officials to form special investigative groups with approval from the central government to avoid local resistance and enforce cooperation.^[49] However, since in China vertical and horizontal leadership structures often run at odds with one another, CPC anti-corruption agencies find it hard to investigate graft at the lower levels. The goal of effectively controlling corruption thus remains elusive to the ruling Party, and only a propaganda tool to mislead the Chinese public on
its false promises.^[49]

Political Incentives for Cracking down

Prominent anti-corruption cases in China are often an outgrowth of factional struggles for power in the CPC, as opponents use the "war of corruption" as a weapon against rivals in the Party or corporate world.^[48]^[50] Often, too, the central leadership's goal in cracking down on corruption is to send a message to those who step over some "unknown acceptable level of graft" or too obviously flaunt its benefits. Another reason is to show an angry public that the Party is doing something about the problem.^[48]

In many such cases, the origins of anti-corruption measures are a mystery. When Chen Liangyu was ousted, analysts said it was because he lost a power struggle with leaders in Beijing. Chen was Shanghai's party secretary and member of the powerful Politburo.^[48] In 2010, a re-release of the Communist Party of China 52 code of ethics was published.

Individuals


Implicated

Prominent individuals implicated in corruption in China include: Wang Shouxin, Yang Bin, Chen Liangyu, Qiu Xiaohua (the nation's chief statistician, who was fired and arrested in connection with a pension-fund scandal),^[51] Zheng Xiaoyu,^[51] Lai Changxing,^[51] Lan Fu, Xiao Zuoxin, Ye Zheyun, Chen Xitong, Tian Fengshan, Zhu Junyi, Zhang Shuguang (a railways official, managed to steal $2.8 billion and move it overseas^[52]).

Researchers

Authors who have written about corruption in China include: Liu Binyan, Robert Chua, Wang Yao, Li Zhi, Lü Gengsong, Xi Jinping, Jiang Weiping, Gong Ting.

Whistleblowers

The strict controls placed on the media by the Chinese government limit the discovery and reporting of corruption in China. Nevertheless, there have been cases of whistleblowers publicising corruption in China, such as Guo Wengui.^[53]

See Media of the People's Republic of China for a discussion on the media in China, including topics such as censorship and controls.

See Also

Anti-corruption organizations

Anti-Corruption and Governance Research Center, School of Public Policy and Management, Tsinghua University, Beijing
International Association of Anti-Corruption Authorities (IAACA) in Beijing
Three-anti/five-anti campaigns (1951/1952)
Central Commission for Discipline Inspection of the Communist Party of China
National Supervisory Commission
Independent Commission Against Corruption (Hong Kong)
Commission Against Corruption (Macau)

Cases

Society

Guanxi (personal relationships in Chinese culture)
Capital punishment in the People's Republic of China
Prostitution in China
Law enforcement in the People's Republic of China
Penal system in China

International corruption index

REFERENCEs

Citations

^ He, Zengke. "Corruption and anti-corruption in reform China"(PDF).
^ Wang, P. (2013). The rise of the Red Mafia in China: a case study of organised crime and corruption in Chongqing. Trends in Organized crime, 16(1), 49-73.
^ Huang, Carol. "Healthcare Is So Corrupt In China That Patients Have To Bribe Doctors For Proper Care". Business Insider. Retrieved 2019-10-24.
^ Wan, William (2013-10-07). "Bribes, not just brains, needed to enter top Chinese schools". Washington Post. ISSN 0190-8286. Retrieved 2019-10-24.
^ Lü 2000, p. 229.
^ Jump up to:^a ^b ^c ^d ^e Yan 2004, p. 2
^ "Corruption Perception Index 2017".
^ Lü 2000, p.10
^ Jump up to:^a ^b ^c ^d ^e ^f ^g Minxin Pei, Corruption Threatens China's Future, Carnegie Endowment for International Peace, Policy Brief No. 55, October 2007.
^ Murong Xuecun (May 8, 2012). "No Roads Are Straight Here"(Opinion). The New York Times. Retrieved May 9, 2012.
^ Teresa Welsh (June 11, 2015). "China's Corruption Crackdown: Progress or Politics?". U.S. News & World Report. Retrieved 2015-06-30.
^ The Book of Swindles: Selections from a Late Ming Collection. Columbia University Press. September 2017. ISBN 9780231545648.
^ Jump up to:^a ^b ^c ^d ^e Minxin Pei, Daniel Kaufmann, Corruption in China: How Bad is It?, November 20, 2007.
^ Jump up to:^a ^b Lü 2000, p. 236
^ Lü 2000, p. 235: "It is true that corruption by cadres existed in the Maoist era."
^ David Barboza, "Billions in Hidden Riches for Family of Chinese Leader", The New York Times, 25 October 2012. Retrieved 27 October 2012.
^ "Xi Jinping Millionaire Relations Reveal Fortunes of Elite". Bloomberg. 29 June 2012.
^ Michael Forsythe. "Bo Xilai Clan Links Included Citigroup Hiring of Elder Son", Bloomberg, 23 April 2012
^ Jump up to:^a ^b ^c Anderlini, Jamil (12 March 2010). "Chinese officials’ children in corruption claim", Financial Times
^ Jump up to:^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j Michael Johnston, "Corruption in China: Old Ways, New Realities and a Troubled Future", United Nations Public Administration Network. Retrieved January 29, 2010
^ Yan 2004, p.8
^ Lü 2000, p. 252
^ Lü 2000, p. 254
^ Hillman, Ben (2010). "Factions and Spoils: Examining Local State Behaviour in China". The China Journal. 62: 1–18. doi:10.1086/tcj.64.20749244.
^ Ball, James; et al. (January 21, 2014). "China's princelings storing riches in Caribbean offshore haven". The Guardian. Retrieved January 23, 2014.
^ Walker Guevara, Marina; Ryle, Gerard; Olesen, Alexa (January 21, 2014). "Leaked Records Reveal Offshore Holdings of China's Elite". International Consortium of Investigative Journalists. Retrieved January 23, 2014.
^ Branigan, Tania; Ball, James (23 January 2014). "China blocks foreign news sites that revealed elite's offshore holdings". The Guardian. Retrieved 23 January 2014.
^ "Top China Market Regulator Yao Gang Arrested In Graft Probe". valuewalk.com. Brendan Byrne. 2015-11-13.
^ Cai Xiao (2014-05-19). "Nation developing and opening up its securities industry". Chinadaily.
^ "China investigates securities regulator's deputy head Yao Gang". India.com. 2015-11-13.
^ Jump up to:^a ^b Shaun Rein, "How to Deal with Corruption in China", Forbes, July 10, 2009
^ Jump up to:^a ^b ^c ^d ^e ^f Lü 2000, p.14
^ Lv 2000, p. 242
^ Hillman, Ben. Patronage and Power: Local State Networks and Party-state Resilience in Rural China Archived 2014-10-06 at the Wayback Machine Stanford University Press, 2014.
^ Jump up to:^a ^b Malcolm Moore, "China corruption trial exposes capital of graft", The Daily Telegraph, October 17, 2009
^ "2018 Trafficking in Persons Report: China". United States Department of State.
^ "China, The Trafficking Situation". United Nations Action for Cooperation Against Trafficking in Persons (UN-ACT).
^ Dyer, Geoff (18 June 2010). "Housing boom fuels corruption in China"
^ Jump up to:^a ^b Yan 2004, p. 12
^ Yan 2004, p. 11
^ Yan 2004, p. 18
^ Yan 2004, p. 19
^ AsiaNews/Agencies, "Corruption in China: Communist official and Supreme Court justice imprisoned," AsiaNews.it, January 19, 2010
^ Wang Xiangwei (28 Jun 2010). CHINA BRIEFING: "More officials trying to get away with murder", South China Morning Post
^ Transparency International, "Chinese National Integrity System Study 2006", December 7, 2006 Archived December 2, 2008, at the Wayback Machine
^ Becker, Jeffrey (2008-10-01). "Tackling Corruption at its Source: The National Corruption Prevention Bureau". Journal of Chinese Political Science. 13 (3): 287–303. doi:10.1007/s11366-008-9028-4. ISSN 1080-6954.
^ Quentin Sommerville, "Corruption up among China government officials", BBC, January 9, 2009
^ Jump up to:^a ^b ^c ^d David Barboza, "Politics Permeates Anti-Corruption Drive in China", The New York Times, September 3, 2009.
^ Jump up to:^a ^b Lü 2000, p. 227
^ Wang, Peng (2013). "The rise of the Red Mafia in China: a case study of organised crime and corruption in Chongqing". Trends in Organized Crime. 16 (1): 49–73. doi:10.1007/s12117-012-9179-8.
^ Jump up to:^a ^b ^c Kent Ewing (1 March 2007). "Resentment builds against China's wealthy", Asia Times Online.
^ A Body, a Scandal and China| By NICHOLAS D. KRISTOF. The New York Times. April 21, 2012
^ Michael Forsythe and Alexandra Stevenson (May 30, 2017). "The Billionaire Gadfly in Exile Who Stared Down Beijing". The New York Times. Retrieved June 14, 2017. The biggest political story in China this year isn’t in Beijing. It isn’t even in China. It’s centered at a $68 million apartment overlooking Central Park in Manhattan.

Sources

Library resources about
Corruption in China

Zhang, Yingyu (2017). The Book of Swindles: Selections from a Late Ming Collection. Columbia University Press.
Lü, Xiaobo (2000). Cadres and Corruption. Stanford University Press.
Hillman, Ben (2014). Patronage and Power: Local State Networks and Party-state resilience in Rural China. Stanford University Press.
Yan, Sun (2004). Corruption and Market in Contemporary China. Cornell University Press.
Manion, Melanie (2004). Corruption by Design. Harvard University Press.
Hutton, Will (2007). The Writing on the Wall: China and the West in the 21st Century. Little, Brown.
Andrew Wedeman: Double Paradox. Rapid Growth and Rising Corruption in China. Cornell University Press, Ithaca, New York State, USA 2012.
Wang, Peng (2013). "The rise of the Red Mafia in China: a case study of organised crime and corruption in Chongqing". Trends in Organized Crime. 16 (1): 49–73. doi:10.1007/s12117-012-9179-8.
Wang, Peng (2017). The Chinese Mafia: Organized Crime, Corruption, and Extra-Legal Protection. Oxford: Oxford University Press.

EXTERNAL LINKS

Categories:

Corruption in China

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