A compelling new report says that runaway corruption in China poses a lethal threat to the nation's economic development and "undermines the legitimacy of the ruling Chinese Communist Party."
Evidence from official audits, press articles and law enforcement data, the report says, indicates that "corruption in China is both pervasive and costly."
Bribery, kickbacks, theft and fraud, particularly by government officials, are said to be rampant.
Pei Minxin (裴敏欣) wrote the report issued last month by the Carnegie Endowment of International Peace, based in Washington. Pei is a political scientist educated at the Shanghai International Studies University. He earned his PhD at Harvard and his work has been widely published in the US.
The report asserts that corruption in China "has spillover effects beyond its borders" that hurt US, Japanese and other foreign investors.
"Illicit behavior by local officials could expose Western firms to potentially vast environmental, human rights and financial liabilities," the report says.
Public statements by Chinese President Hu Jintao (
The report says: "The odds of an average corrupt official going to jail are at most 3 out of 100, making corruption a high-return, low-risk activity."
If Hu comes down too hard on corruption, he risks losing support of the delegates at the recently held party Congress who elected him. Those delegates are drawn largely from party officials at the local and provincial level.
Pei is not alone in assessing corruption in China. George Zhibin Gu, an investment banker who was educated at Nanjing University and earned a doctorate at the University of Michigan, has suggested that corruption may destroy China's economy, which has been growing at 8 percent to 10 percent a year. In the West, a 3 percent growth rate is respectable.
Moreover, China's Xinhua news agency frequently details specific instances of corruption. Last week, the Chinese government was reported to have banned fire department officials from receiving sexual favors from companies seeking their protection.
Scrutinized through a wide-angle lens, corruption is just at the forefront of the internal ills that jeopardize China's economic and political strength. Unemployment and under-employment, in which a worker has only one or two days of work a week, may be over 25 percent. Paradoxically, China has begun to experience shortages of the skilled labor needed for its expanding industries. Economic progress has been uneven, with coastal cities leaving the rural interior far behind.
"Corruption in China is concentrated in the sectors with extensive state involvement," the Pei report says.
That includes construction of dams, roads and electrical grids. The sales of land or granting user rights are susceptible, as are financial services and heavily regulated industries.
"The absence of a competitive political process and a free press in China makes these high risk sectors even more susceptible to fraud, theft, kickbacks and bribery," the report says.
Pei cites a study done last year asserting that about half of those engaged in corruption were involved in infrastructure projects or land transactions.
Even so, the report says: "Beijing punishes only a very small proportion of party members or government officials tainted by corruption."
US, Japanese and other foreign investors may be put at a competitive disadvantage by rivals who engage in illegal practices to win business in China, the report says.
"Corruption puts Western firms' intellectual property rights particularly at risk because unscrupulous local officials routinely protect Chinese counterfeiters in exchange for bribes," it says.
While the report doesn't say so, US firms that pay bribes may violate the US Foreign Corruption Practices Act of 1977 that forbids kickbacks and bribery abroad, no matter what the customs of other nations.
The report also says: "Corruption in China affects other countries through the spread of cross-border crimes such as drug trafficking, human smuggling and money laundering."
Richard Halloran is a writer based in Hawaii.
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
Former president Ma Ying-jeou’s (馬英九) trip to China provides a pertinent reminder of why Taiwanese protested so vociferously against attempts to force through the cross-strait service trade agreement in 2014 and why, since Ma’s presidential election win in 2012, they have not voted in another Chinese Nationalist Party (KMT) candidate. While the nation narrowly avoided tragedy — the treaty would have put Taiwan on the path toward the demobilization of its democracy, which Courtney Donovan Smith wrote about in the Taipei Times in “With the Sunflower movement Taiwan dodged a bullet” — Ma’s political swansong in China, which included fawning dithyrambs