asian review: CHINA The politics of China’s anti-corruption campaign WILLIAM H. OVERHOLT education, and with games like the to build in an inappropriate location, Olympics and the Asian Games. In to inappropriate standards, ignoring HINESE President Xi Jinping’s China graft predominates, while in even crucial safety rules like the one C anti-corruption campaign has India corruption predominates. requiring a fire station inside the plant. highlighted the seriousness of China’s There is also what the Japanese And all the while public discussion official malfeasance. The outcome of term ‘structural corruption’. In Japan, was smothered by propaganda about Xi’s campaign will shape a new era of virtually all government officials safety. China’s politics, economy and foreign and senior executives are personally The scale of graft in China has policy. honest: no bribes, much hard work. become a potentially fatal problem ‘Corruption’ covers quite But five major interest groups— for the Chinese regime. The economic disparate phenomena with different agriculture, retail, construction, costs of Indian corruption are far consequences. It may mean graft, property and banking—dominate the greater. The economic costs of Japan’s which is taking a tip—even a multi- legislature to the extent that they can structural corruption dwarf both. million dollar one—for doing your pervert national policy to their benefit. These varieties of corruption job, or it may mean corruption in the The construction lobby provides the overlap. But the overall patterns are stricter sense, taking money in return template. For a long period, Japanese quite distinctive and predictive. for undermining national policy or infrastructure spending (for a country Probably the single greatest the national interest. When a Chinese the size of California) exceeded US consensus in the literature about official gets a large illegal kickback for infrastructure spending. There are corruption in China is that the building a good road, that is graft. world-class bridges used largely by authoritarian system inevitably causes Chinese ‘corruption’ is deer and rabbits, and bullet trains to extreme corruption and that China overwhelmingly graft, whereas, for small towns. would be much cleaner if it became instance, in the Philippines under So powerful was the grip of the more democratic. As the examples of former president Ferdinand Marcos construction lobby on the nuclear the Philippines, Thailand and India and in India, corruption in the regulators that the operators of the show, this is an ideological conceit. narrow sense predominates. How Fukushima nuclear plant were allowed Democracies in poor countries can we tell? We can do case studies. typically have much more crippling In the Philippines, for instance, many Democracies in poor corruption than China, and it is rooted important projects were designed to in the processes of democracy. In fail. A hotelier would borrow US$100 countries typically have very poor countries, there are few million with a government guarantee, or no political contributions other then steal US$40 million for personal much more crippling than bribes or candidate self-funding; use and let the hotel go bankrupt peasants can’t donate. In very poor during an economic downturn, leaving corruption than China, democracies, the complexity of the government with the debt. That is democratic judicial systems makes corruption. and it is rooted in the it very difficult to convict criminals Beyond case studies is the Biblical and therefore empowers wealthy saying: ‘By their fruits ye shall know processes of democracy criminality. In Taiwan, a reforming them’. In China, good roads and Leninist government under Chiang ports get built, consistently. In India Ching-kuo cleaned up world- they don’t. Likewise with primary beating corruption, but the advent of 22 EAST ASIA FORUM QUARTERLY APRIL — JUNE 2015 asian review: CHINA picture: kyodo / AAP Sensational front pages on 30 July 2014 report the decision to pursue a case for alleged graft against former security chief Zhou Yongkang. democracy under Lee Teng-hui and obsessed with saving their countries US counterparts. China’s railroad Chen Shui-bian partially revived it. through economic growth. minister became obscenely rich but In China, as in all emerging The core reason why graft rather built extraordinary railroads. To get economies, most officials supplement than policy-defeating corruption a promotion the mayor must not just their salaries with irregular income. prevails in China is that the growth- fulfil his targets but also outperform But the forms and intensity vary. One focused system demands performance ambitious colleagues. Although characteristic of the Asian miracle at all levels. China is run like a politicians everywhere orate about economies is that the values of the top business. Every village head, city fostering growth, most countries do leaders have generally given priority mayor, provincial governor and not hold political leaders at any level to to national service; they focus on how party secretary has performance performance standards. they will be seen by future historians. requirements—economic growth, Jiang Zemin and Zhu Rongji In the Marcos Philippines and in domestic and foreign investment, oversaw an economy characterised much of Latin America and Africa, building key roads and bridges, by pervasive graft but they knew how the motivation to become president is and improvements in children’s to keep it under control by using that the president can become richer education—that must be met to gain structural reforms. They sought to quicker. While some of their family promotion and avoid punishment. cut the top levels of government members did well, nobody has accused And Chinese officials are held in half, while quadrupling salaries, Park Chung Hee, Chiang Ching Kuo, to high standards. Even in poor to ensure that officials could live Lee Kwan Yew or Deng Xiaoping of provinces like Anhui, Chinese on their incomes. They gave every being in it for the money. They were roads are generally better than their government and party bureau a quota EAST ASIA FORUM QUARTERLY APRIL — JUNE 2015 23 asian review: CHINA of regulations to cut, to reduce the means buying a company, reorganising govern effectively. Zhou Yongkang’s number of opportunities for squeeze. it, and selling it profitably based on Petroleum Faction, built around They drastically reduced the number arguably improved value. In China, it controlled energy prices and of state-owned enterprises (SOEs) often means persuading the local party oligopolies, provided the archetype and put the remaining ones on more secretary to allow you to buy into a of the emergent interest group—an of a market basis. They forced the good SOE just before stock market economic empire larger than many military to give up over two-thirds of listing—with stock market prices national economies, with Zhou both its non-military businesses. And they at three times the level of Western managing the empire and serving promoted competition and demanded market prices for much of the Hu– as China’s security chief. Leading increased transparency of various Wen era. The scale of graft became corporate executives openly ridiculed kinds. So corruption, while still astronomic. the prime minister’s key policies and pervasive, remained within limits. Graft became such a high ministers sometimes defied him. Hu Jintao and Wen Jiabao reversed proportion of local officials’ income Rising interest group power entailed many of the Jiang–Zhu reforms. that their behaviour began to shift emergent structural corruption. They took office at a time when the in the direction of the Philippines’ Along with these economic population was weary of market- Marcos-era officials. Many became ramifications came crucial political oriented reforms, having seen 50 reluctant to approve smaller projects developments. The Deng and Jiang million state enterprise jobs and 25 because small projects provided so eras, 1979–2003, were characterised million manufacturing jobs evaporate. little squeeze. This turned out to be by a sense of mobility and universal Hu and Wen embodied the reaction corrupt in the narrow sense. opportunity. In the Hu–Wen era, against such stresses. Market reforms Most importantly, whereas the this sense of opportunity declined. ceased and in some cases receded. central tendency of the Jiang–Zhu era Instead, the core social image was of They also had to cope with the had been the successful centralisation a congealing party-government-SOE- global financial crisis and, like leaders of power—bringing the localities, military elite that controlled most of everywhere, they poured money into the money supply, the SOEs and the the opportunities. the only institutions that could create military under firmer central control— In this context, inequalities of rapid increases in production: the the Hu–Wen era saw the cession income and wealth became more big companies. The government and of power to enormously influential politically salient despite the party bureaucracies nearly doubled, interest groups: the SOEs, the big leadership’s successful efforts to from 40 million officials to 70 million. banks, the party and government narrow the gap between the wealthy The SOEs revived their pre-eminence bureaucracies, local governments and coast and the relatively impoverished and the 1990s campaign to increase the military. interior. Resentment of a judicial competition dissipated. Senior By the end