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Next Chapter in China's Rise: Reforming a Corrupt System

Author: Elizabeth C. Economy, C.V. Starr Senior Fellow and Director for Asia Studies
November 14, 2012
The National

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First published in The National.

Chinese President Hu Jintao has left his presumptive successor, Xi Jinping, with a vastly richer and militarily more powerful country than the one he himself inherited a decade ago. Yet the political legacy Mr Hu leaves behind may make all that irrelevant.

Not a man prone to hyperbole, President Hu used his November 8 speech at the outset of the 18th Party Congress (the gathering of top-party officials at which the leadership for the next five years will be announced) to warn his fellow Party leaders of the danger posed to their future by corruption: "If we fail to handle this issue well," Mr Hu warned, "it could prove fatal to the Party and even lead to the collapse of the Party and the fall of the State."

Putting aside the dramatic element of Mr Hu's comments, no one in or outside China should be surprised by his remarks. Corruption has been the Achilles heel of the Party since the founding of the People's Republic of China in 1949, and efforts by Party leaders to root out corruption have a long and storied history.

As early as 1951, Mao Zedong launched the "Three-anti" and "Five-anti" campaigns to oppose corruption. Yet even these efforts were corrupted when Mao used them to consolidate his personal power. And since that time, anti-corruption campaigns and individual charges against officials and businesspeople in China have never been entirely free of the suspicion that they are merely smokescreens for certain officials to eliminate their political rivals.

In fact, corruption and the failure to develop the rule of law in China now define much of the country's political and economic life. There are gross violations of power that earn front-page new stories, such as the saga of murder, power and greed that led to the downfall of the Chongqing party secretary, Bo Xilai, whom many in China had believed was likely to assume a seat on the Standing Committee of the Politburo this week.

More common are reports of corruption among officials who have stashed millions in ill-gotten gains abroad or boast multiple homes throughout the country.

Then there is the garden variety corruption - mundane abuses of power that bit by bit chip away at the Party's legitimacy: illegal land expropriations by local officials; schoolteachers charging parents extra money to seat their child next to the heater in a cold classroom; or doctors overcharging for medicines to supplement their paltry salaries.

This corruption leaves no element of Chinese society untouched, and the political and social ramifications are serious. Many Chinese take to the streets; there were reportedly 180,000 protests in 2010 in China, the most recent year for which data are available. Whether people were protesting against a polluting factory, illegal land expropriation, a failure to provide pensions or another social concern, corruption and the lack of rule of law were typically at the heart of the unrest.

In addition, China's wealthiest fear for the security of their assets, often emigrating or sending their children abroad; and the brightest may also seek to leave a system where creativity, innovation and merit often lose out to political connections and financial wherewithal.

Corruption also damages China's reputation globally. Rampant intellectual property theft, fraudulent reporting by Chinese firms listed on foreign stock exchanges, and the bribery and payoffs demanded from foreigners to win contracts and do deals - all of this tarnishes the country's otherwise extraordinary tale of economic success.

Faced with such a sociopolitical landscape, as well as Mr Hu's words of warning, might Xi Jinping adopt a set of bold reforms to address the challenge at hand?

If he is interested, Mr Xi needn't look further than the local newspapers for ideas. The results of a Global Times survey released just before the start of the Party Congress revealed that among the more than 1,200 Chinese citizens polled, corruption topped the list of perceived threats to social stability.

In response, they supported political reform - greater supervision by the media and by themselves over their government. The popular Caixin magazine developed a list of 18 reforms for the 18th Party Congress, including judicial independence, reining in local officials and eliminating corruption in the housing market.

Mr Xi hasn't shared his vision for political reform, but based on his past statements and actions, it will be a relatively modest one. Reforms might include intra-Party democracy, which means multi-candidate elections, but only among the party faithful; and deliberative democracy, which means developing institutions to channel public opinion into the political process, but retaining decision-making power exclusively in the hands of the Party.

Given that Mr Xi applied multiple times to be a Party member before being accepted, perhaps it is unfair to ask that he now take steps that would significantly limit the Party's power.

Still, it is difficult to believe that in a political system built upon trading money for power and power for money, such small-bore reforms will do the trick and restore the Party's legitimacy. Even if Mr Xi doesn't get it right the first time, however, the good news is that the Chinese people are waiting in the wings to help him get it right the next time.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

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