China’s anti-corruption drive is a party tactic to preserve power

Xi Jinping's anti-corruption campaign is part of a broad conservative reform agenda to preserve China’s Leninist system of single-party rule.

The Australian

Chinese officials hosting a banquet for an Australian delegation in Hohhot were embarrassed recently when their host for the evening, Pan Yiyang, deputy Communist Party chief of the Inner Mongolia Autonomous Region, failed to show up.

Pan was whisked away to Beijing on corruption charges before the hosts could notify their international visitors of the adjustment to the formal table setting.

This will not be the last time for such surprises. The corruption purge is still chasing down fresh targets. Thus Canberra’s co-operation with Beijing on Operation Fox Hunt to track down Australian assets acquired with tainted money is likely to prove a long-term and large-scale commitment.

Pan joins 17 other high-ranking Inner Mongolia party officials removed for questioning since February last year, according to China Newsweek magazine, 12 in the past three months alone.

Another senior Inner Mongolia official thought to have been under suspicion, Zhang Penghui, committed suicide on September 8, before he could be investigated. Zhang is the latest of 21 senior officials known to have taken their lives in China this year to pre-empt investigations — some to protect their families from having to surrender corruptly ­acquired assets, others on instruction from superiors who feared being exposed through the interrogation of their subordinates.

An old term with echoes of imperial times, “being suicided”, has been revived for subordinates whose superiors promise to protect their family members in return for their eternal silence.

On August 28, Wang Qishan, head of the Communist Party’s Central Commission for Discipline Inspection, told a meeting in Beijing that the massive anti-corruption drive convulsing the party still had a long way to run.

Two years in, the campaign is still in the first of three planned stages. Wang has called this the “would not dare” stage, with his team swooping without warning on serving or retired party cadres for any wrongdoing committed at any time in their careers. “I can now responsibly say that the initial deterrent stage is beginning to yield results,” Wang told the meeting. Only the foolhardy would dare act corruptly today.

No campaign runs forever, however, and on past performance cadres are likely to return to their old ways once the heat is off. Wang plans to break this pattern by putting new structures and procedures in place during the second stage of the campaign, the “would not be able” stage, with officials unable to behave corruptly even if they dared.

In the third or “would not think of it” stage, the idea of acting corruptly would not occur to officials as they went about their business. By then, ideally, the party would have nurtured a mature service ethic.

Party officials are certainly running scared in the “would not dare” stage. No one can say when or where the axe is going to fall.

To date, 47 minister-level officials, more than 600 director-level officials and more than 200,000 petty officials have been snared. Local officials can be heard complaining behind closed doors that they have been ambushed. For years they were told to go out and do whatever it took to develop their regions and build their communities. The result is a kind of bureaucratic stand-off in which officials are declining to take decisions about things that matter.

In July, Caixin magazine reported almost two-thirds of local officials surveyed during the campaign were reluctant to take decisions for fear of “doing something wrong”.

“Whatever can be delayed will be delayed,” Caixin reported.

Why bring the country to a standstill over corruption? President Xi Jinping, who is driving the campaign, judges the risks acceptable because he is playing for higher stakes. He is overseeing the development of a broad conservative reform agenda to preserve China’s Leninist system of single-party rule. The anti-corruption campaign is part of it.

Many outsiders interpret Xi’s effort to catch “tigers” (senior officials) and “flies” (petty officials) as a cynical manoeuvre to undermine his factional enemies. There’s some truth in that.

Others point out it’s an attempt to shore up the popularity of the party. In fact the party’s lavishly funded systems of propaganda, surveillance and suppression are sufficiently robust, extensive and effective to minimise risks arising from popular discontent. In any case, public opinion surveys taken before the campaign got under way showed unwavering support for the central leadership.

To be sure, little respect was shown in surveys for the petty “flies” that citizens deal with every day. Swatting them is proving highly popular. But elite “tigers” inhabit a realm so remote from everyday life that their conduct is normally beyond the reach and reproach of ordinary people. Snaring “tigers” runs the risk of showing the whole world that senior officials differ from petty ones only in the scale of their venality.

The campaign, in short, is as likely to undermine popular support as to build confidence in the party. In fact, the party is not afraid of the Chinese people. What the leadership fears most is the party itself — a powerful runaway train, directed by unaccountable officials, many of whom have bought or bribed their way into office, acting without restraint and taking China god knows where. Xi is trying to restore the rationality and viability of the party in the eyes of a party that has lost faith in itself.

Twenty million complacent ­officials need to be given a good shaking-up to show who is boss and, more significantly, to soften them up for more important steps to come.

This is not going to be easy.

China’s system of public administration is caught in a dilemma common to all hierarchical Leninist regimes.

In The Logic and Limits of Political Reform in China, American political scientist Joseph Fewsmith puts the problem this way. Beijing delegates power downwards through five levels of party and government authority — central, provincial, prefectural, county and township — with officials at each level holding those at the next level down responsible for what happens on their patch.

Selection and promotion follows the same pattern, with officials at each level promoting their counterparts the next level down.

As the centre has little direct say over personnel selections below provincial level, lower-level cadres have little incentive to heed Beijing.

Given their low efficiency as command structures, Leninist systems are prone to degrade unless shaken up now and again.

Appointment processes become increasingly particularistic, dominated by local strongmen in collusion with powerful local interests, with the result that the system grows even less responsive to central direction over time.

At a certain point central policies are routinely subverted, official positions are traded, corruption spreads from individual acts of petty bribery to large-scale collusive behaviour, and officials start padding departmental payrolls with “phantom” employees and pocketing their salaries. Without a free press or formal avenues of popular redress, Leninist systems lack routine feedback mechanisms to alert higher authorities to signs of system degradation. A centre can lose control of its own state apparatus without being aware of it.

At this point, a disruptive ­national political campaign is one of very few options available for a party leader to regain control, restore order and try to hold things steady until the next degradation cycle kicks in.

Xi came to office last year knowing local governments were subverting central policies, aware that official positions were being freely traded, seeing with his own eyes evidence of large-scale official collusion, and conscious that senior officials were padding their payrolls by employing cronies without fixed assignments.

Not all of this involves corruption. Defying central policy directives can be done with the best of intentions yet infuriate the centre by exposing its fragile hold over its own command structure.

In 2010, for example, Beijing required local governments to close all steel plants with a capacity of less than 30 tonnes to reduce excessive production capacity.

The directive had the perverse effect of expanding national capacity. Local governments complied with Beijing’s policy directive by merging smaller local plants with larger ones and injecting additional capital into smaller units so that they passed the minimum threshold.

National steel capacity grew from about 700 million ­tonnes in 2010 to almost one billion tonnes last year under Beijing’s national steel reduction program.

In retrospect, getting local officials to sit on their hands would have been preferable to having them actively subvert Beijing’s ­intentions.

The clandestine buying and selling of office, on the other hand, is a clear indicator of corruption. In Inner Mongolia, local party directorships and government planning positions have been trading for about $1m each.

Elsewhere, management positions in local city police forces were available for about $60,000 each, positions in the prison system for about $10,000, and school principal posts for between $20,000 and $200,000, depending on a school’s potential for under-the-table graft.

Until recently, senior positions in the military were selling for more than $100,000 a post. The purchased positions corrode party and military command structures.

A recent investigation into phantom employees in local government offices identified 55,000 cadres in one of China’s 34 provincial-level administrative units, Hebei Province, who were listed on the payroll without actually working. If this rate is a reliable indicator of national trends, the number nationwide approximates one million. And a growing trend towards large-scale conspiracy to defraud has frozen honest officials out of rightful promotions. When collusion takes hold, only the corrupt can advance.

Given the scale of internal dysfunction, the party is rightly alarmed by its own success. It has been too easy. On the way to becoming the wealthiest and most powerful organisation in the world, it has destroyed or displaced all other formally structured organisations and networks in the political, administrative, economic, legal, social and cultural life of China.

Aside from organised crime and underground religion, every national organisation in China today is effectively part of the Chinese Communist Party.

So successfully has the party eliminated all rivals that if it were extracted from China tomorrow the country would be revealed as a formless blob.

Never in its more than two millennia as a unified state has the survival of China been as dependent as it is today on the internal management systems of a dysfunctional ruling party.

That’s a daunting thought for Xi, who has announced plans to keep local officials in check by “putting power in its cage”.

Xi came to office knowing the party was not fully under his control, that policy was being made on the run by entrenched interest groups in collusion with corrupt officials, and that few instruments were at hand to deal with problems of system command short of a political campaign. He launched a campaign focusing on corruption.

Xi’s wider agenda explains why the anti-corruption campaign has life in it yet. As Wang explained, the campaign has a couple of ­stages to go. Beyond that, Xi plans to limit the scope of local authority so officials can no longer ride roughshod over their communities or ignore instructions from Beijing. This step will require reforms to China’s judicial and fiscal systems at the local level, and refashioning central-local relations on a model yet to be devised.

It’s these long-term plans to make Leninism work in a market economy that make the risks of taking on “tigers” and “flies” worthwhile.

John Fitzgerald is director of the Asia-Pacific Centre for Social Investment and Philanthropy at Swinburne University of Technology and a former head of the Ford Foundation in Beijing.