New Challenges for Xi Jinping’s Anti-corruption Crackdown?

This piece was originally published by the China Policy Institute: Analysis, based at the School of Politics and International Relations, the University of Nottingham.  An earlier article in China Currents that lays a foundation for this one is available here, with an update here.

 As the anti-corruption campaign launched by CCP General Secretary Xi Jinping approaches its fourth anniversary, the question ought to be asked: where is it going? When the drive was first announced in the winter of 2012-2014, it appeared that it would prove a repeat of crackdowns launched by Xi’s predecessors – a burst of sound and fury in which a swarm of rank-and file-officials – known popularly in China as “flies” – would be detained by the party’s Discipline Inspection Commission, some of whom would then end up being prosecuted by the Procuratorate, and ultimately be packed off to prison by the People’s Courts. In the process, a few senior officials – known as “tigers” – would be “bagged.” Based on past precedent, Xi’s crackdown should have ceased being front-page news after a few months and quietly faded away – until some new scandal prodded the leadership to again declare that the party must fight corruption to the death.

As it developed in the spring of 2013 and onward, Xi’s crackdown wrought havoc on such assumptions. As in the past, tens of thousands of flies were investigated (upwards of 500,000 by rough estimates) by the party and indicted (more than 120,000) by the judiciary. The annual rates of increase were impressive. The total number of economic and official malfeasance cases “filed” by the Procuratorate increased nine percent in 2013 and a further 10 percent in 2014, followed by a slight two percent decrease in 2015 compared to 2014. The number of officials at the county and department leadership levels indicted increased nine percent in 2013, 32 percent in 2014, and a further 11 percent in 2015, with the result that the number indicted rose from 2,610 in 2012 to 3,821 in 2015. The number of more senior officials at the prefectural and bureau levels jumped 46 percent in 2013, 126 percent in 2014, and 27 percent in 2015, thus increasing indictments from 179 in 2012 to 747 in 2015. Between 2012 and 2015, the courts convicted 100,200 individuals on corruption-related charges. As of November 2016, 116 civilian tigers – defined as state officials, party cadres, and state-owned enterprise (SOE) managers holding bureaucratic ranks equal to or above that vice minister – and 82 military tigers – officers holding ranks of major general or above – had been implicated, including one former member of the Politburo Standing Committee (Zhou Yongkang); three former members of the Politburo, Bo Xilai (former Party Secretary Chongqing), General Xu Caihou (former Vice Chairman of the Central Military Commission), and General Guo Boxiong (former Vice Chairman of the Central Military Commission); and the former Director of the CCP Central Committee General Office (Ling Jihua).

Far from another short-lived political drama, Xi’s anti-corruption drive has thus proven to be more intense and protracted than its predecessors. Moreover, unlike its predecessors, it does not yet seem to have a discernable end. On the contrary, observers have suggested that Xi’s intensified drive against corruption is not a finite “campaign,” but is rather part of a “new normal” (新常态). It is true that in the past six months or so the drive has become less visible and dramatic. The “heyday” of the tiger hunting when senior officials and generals seem to be falling right and left (roughly from December 2014 to March 2015) appears to have passed. The drive nevertheless continues to claim victims, the most recent (September 2016) being the Acting Party Secretary of Tianjin Huang Xingguo. Flies also continue to fall at an unrelenting pace, as evidenced by terse reports posted daily on the Ministry of Supervisor and Central Discipline Inspection Commission’s shared website (http://www.ccdi.gov.cn/) and the party’s “anti-corruption” website (http://fanfu.people.com.cn/). As such, the blitzkrieg attacks of the earlier phases of the drive have now apparently given way to a less dramatic but perhaps no less intense war of attrition as Xi and his primary ally in the fight against corruption, Wang Qishan, continue to press onward.

At the Sixth Plenum of the 18^th Party Congress in late October 2016, Xi in fact made it clear that the drive would continue, and vowed to continue to attack high-level corruption. But little in terms of concrete regulations was new. For example, the plenum promulgated a new set of guidelines on corruption that included warnings against tolerating corrupt behavior by members of officials’ families, but it did not adopt a policy mandating that officials disclose family assets that would have served as a significant new hedge against such corruption. Similarly, talk arose of centralizing the discipline inspection system by pooling the resources of the party’s Discipline Inspection Commission, the state Ministry of Supervision, and the judicial Procuratorate, a change that would have helped make its local organs more independent of the corresponding party committees, and therefore less apt to protect local officials from scrutiny and more aggressive in pursuing evidence of corruption. In the end, however, the plenum approved a modest pilot program limited to a few provinces. Shortly afterward, the Central Discipline Inspection Commission also announced that it would dispatch inspection teams to Beijing, Chongqing, Guangxi, and Gansu plus 15 other major state agencies. This new round of inspections, however, replicates a pattern of periodic central intervention put in place back in 2013, not a major new escalation of the drive. In sum, the results of the plenum suggest that Xi intends to continue the drive, but that his basic tactic will likely remain much the same.

It would seem the drive is now approaching a critical juncture. Xi and Wang have bagged a lot of tigers, some of whom also happen to have been Xi’s potential or perceived political rivals. Xi has thus clearly used the crackdown on corruption to consolidate his grip on power and to at least partially re-establish the primacy of the central leadership over the sprawling party-state apparatus. In the process, he has perhaps made inroads against the extensive high-level corruption that apparently spread during the Hu Jintao era. He has certainly not, however, dramatically reduced the overall level of corruption. At best, he has perhaps brought the problem closer to some sort of “controlled” level.

Having made some inroads, Xi and Wang now face the difficult task of figuring out how to back off the anti-corruption fires they set during the more intense phases of the drive. Many observers report the ongoing drive has produced a pervasive atmosphere of fear among officials, and has left many paralyzed. Such fear is hardly unexpected. A broad reading of the past three years of revelations suggests many illegal and questionable behaviors and practices on which Xi and Wang have “dropped the hammer” since the 18^th Party Congress had become essentially “standard operating procedure” during later Jiang Zemin and Hu Jintao years. Some of those convicted of accepting bribes have, for example, confessed that they thought little of pocketing “red envelopes” (or briefcases or suitcases) stuffed with cash. In some cases, they claimed they felt pressured to accept bribes because to not do so would have violated prevailing informal norms of official behavior, and would have offended and angered those who offered bribes.

Given the apparent extent of corrupt practices among officials, cadres, and managers, Xi and Wang now face four daunting tasks. First, they need to continue to tighten administrative procedures and curb the autonomy of decision-makers and hence reduce the opportunities for corruption. Second, they need to reduce the gap between the pay officials, cadres, and managers receive and the income of private-sector actors with whom they interact. Higher official pay will not eliminate temptation, but so long as poorly paid officials control valuable assets and opportunities, resisting temptation will be difficult.

Third, Xi, and the party more broadly, has to address the reality that since the 1990s rapid economic development has spawned a new economic elite that is linked by blood and marriage to the older political elite. Power and wealth overlap in all advanced economies and political systems, including both authoritarian and democratic systems. Although Jiang Zemin embraced and legitimated China’s new economic elite with the Three Represents in 2002, China still lacks a system of ethics to regulate and regularize how power and money interrelate. As a result, a “culture of corruption” has grown and festered. Although the negative economic consequences of such loose ethics and shady officials might have been endurable during the days of rapid economic growth, as China’s economy slows, a culture of corruption will prove an increasing drag if it is not replaced by a new set of elite ethics.

Fourth, Xi and Wang have to devise some sort of “amnesty” that would allow corrupt officials, cadres, and manager to make a clean breast of their past transgressions and become part of new “less corrupt” way of doing official business. If corruption has become a near ubiquitous pathology among officialdom, continuing to aggressively combat corruption indefinitely could wreak significant damage to the party-state and could potentially destabilize China’s political superstructure. Having bagged more than 200 civilian and military tigers, taken down thousands of mid-level “cats,” and swatted upwards of 100,000 flies, Xi and Wang need to figure out how to declare “victory” and let the current anti-corruption drive transition to a true “new normal” of intensified anti-corruption work that deters corruption while also ensuring that the party-state can function.

De-escalating the anti-corruption drive and seeking to transition to a new normal could, however, confront Xi with two major challenges. First, even limited amnesty and marginal pay raises for officials and SOE managers could be seen as rewarding past corruption rather than a means to disincentivize future corruption. After almost three-and-a-half decades of China’s war on corruption, many ordinary Chinese have grown cynical and believe that corruption is a pervasive pathology. As a result, Xi is apt to find it difficult to convince the public at large that his crackdown has significantly reduced corruption.

Second, although Xi’s crackdown has bagged more than 200 senior party cadres, state officials, senior SOE managers, and military officers, as well as a number of China’s brash new tycoons, Xi’s critics grumble that his “friends” have escaped unscathed. They argue that the real goal of the tiger hunt has always been to take down Xi’s political enemies and thereby enable him to secure a grip on political power akin to that of Chairman Mao Zedong. To an extent, there can be little question that the crackdown has enabled Xi to consolidate power. It also likely true that, like the “dead tigers,” others among China’s political and economic elite have become wealthy by playing loose with the formal “rules” and using their access to power and connections to gain advantages from the economic boom that accompanied China’s transition from the plan to the market. Absent a dramatic takedown of some member of Xi’s inner circle, such talk is not likely to die down. On the contrary, if the intensity of the crackdown begins to fade, rumors that Xi allowed other tigers to remain free are likely to continue. Xi thus faces the risk that ramping down the crackdown could be seen as a self-serving attempt to legitimate a political system that remains dirty.

Finally, Xi may be facing a new and potentially serious challenge from China’s business elite. In December 2013, 56 delegates to the Hunan Provincial People’s Congress from the city of Hengyang were expelled after it was found that they had paid a combined Y110 million to 518 members of the Hengyang Municipal People’s Congress and 68 staffers to secure their seats. In September 2016, 45 delegates to the National People’s Congress (NPC) from Liaoning province were expelled after it was revealed that they had paid Y40 million in bribes to 523 of the 619 members of the Liaoning Provincial People’s Congress. Thirty-eight of the 62 members of the congress’s standing committee were axed. Twenty of the 85 members of the Liaoning Provincial Party Committee were among the expelled delegates. Among the 40-odd members of the province’s leadership,¹ the congress’s chair Wang Min, the former secretary of the Liaoning Provincial Party Committee and a member of the 18th Central Committee; congress vice chair Wang Yang; congress vice chair Zheng Yuchao; congress vice chair Fan Feng; congress vice chair Zhu Shaoyi; Vice Governor Gang Rui; Vice Governor Liu Qiang; and Su Hongzhang, secretary of the party’s powerful provincial Politics and Law Committee and Deputy Secretary of the Liaoning Provincial Party Committee, were expelled and in some cases charged with criminal bribery and election fraud.

Although the National People’s Congress and its local counterparts nominally exercise substantial legislative authority, they are often described as “rubber stamp” bodies that provide mere window dressing for China’s communist party dominated “people’s democracy.” If the congresses are functionally powerless, why would want-to-be delegates in Liaoning be willing to pay an average of Y900,000 (US$136,000) for worthless seats in the national legislature? Even more perplexing, why would want-to-be delegates in Hunan be willing to pay an average of Y1.96 million (US$295,000) for a seat in the even less influential provincial legislature?

According to Hong Kong-based scholar Suzanne Pepper, even though having a seat in a people’s congress may seem bestow no political power, “membership in any honorary body is coveted by people who see it as a mark of social status.” ² The people’s congresses, journalist Michael Forsythe writes, have become a “club for some of China’s wealthiest executives, keen to rub elbows with government officials.” Being a delegate, he continues, “… brings prestige, much like peerage or knighthood in Britain.” ³ A deputy’s “red hat,” Professor Zhang Ming argues, gives its wearer access to powerful officials and nefarious insider deals. ⁴

Members of the business community have, in fact, become part of China’s political establishment since former General Secretary Jiang Zemin first introduced his “Three Represents” theory in 2000 and announced that the communist party was not only the vanguard of the proletariat but also the representative of the “advanced productive forces.” Private capitalists, industrialist, investors, real estate speculators, and white collar professional thus joined workers, peasants, cadres, soldiers, and the managers of state-owned enterprises as part of the China’s “socialist” coalition. Preliminary data suggest, in fact, that not only have members of the non-state business sector become part of that coalition, the vast majority of those buying votes were members of the business community. The weight of the business community was particularly great in Liaoning and Hunan where managers and other business professionals made up more than 40 percent of the elected delegates. Among the 45 delegates expelled from the Liaoning Provincial People’s Congress, upwards of 40 had business connections. The available data also suggest that the many vote “sellers” were also members of the business community. But they were not alone in taking money for their votes. Delegates from a variety of other sectors – including the party apparatus, officialdom, education, and, perhaps most notably the police and military – were implicated and expelled from the Liaoning PPC. Eighteen of the 25 delegates from the PLA’s Liaoning garrison were expelled for selling their votes.

Whether the Liaoning and Hengyang vote-buying scandals are anomalies or indicative of a more widespread problem is not clear. But in light of evidence that vote buying is common at the village level where candidates reportedly often curry favor with voters by handing out relative small sums of cash, free dinners, and gifts such as cigarettes and cheap alcohol, it is possible that vote buying has become an integral part of the “electoral process” at the local and provincial levels in contemporary China. While local business elites may have begun to try to buy their way into the political superstructure from the bottom up, China’s new super rich also have been penetrating it from the top down through both the NPC and the Chinese People’s Political Consultative Conference (CPPCC). Close to one in 20 members of the 11^th National People’s Congress (2007 to 2012) and the 11^th CPPCC were listed among China’s super rich by Hurun, a Hong Kong-based magazine.

Formed in 1949, the CPPCC wrote the organic laws of the People’s Republic of China, and transferred its national legislative authority to the NPC in 1954. Relegated thereafter to an amorphous advisory role in a political system dominated by the Communist Party and largely defunct for a decade beginning in the mid-1960s, the national CPPCC, the provincial CPPCCs, and their local affiliates have been described as “useless flowerpots” whose main function was to give delegates from the provinces an opportunity to spend a week wining, dining, and basking in the media spotlight during the annual “double meeting” when the NPC and CPPCC simultaneously convene in Beijing, as well as providing retired cadres and officials with honorary sinecures for the golden years. The CPPCC’s apparent lack of any meaningful power notwithstanding, close to two dozen chairs and vice chairs of provincial political consultative conferences and dozens of senior members of local political consultative conferences have been implicated in corruption during Xi’s crackdown. Even though it appears that in many cases those implicated were involved in corruption before retiring from their party and state posts, evidence also exists that corrupt monies continued to flow to others after they relinquished their official posts.

If China’s growing business elite, with its hybrid mix of private entrepreneurs and SOE managers, is trying to buy its way into China’s institutions of power, it is possible that while Xi has been cracking down on corruption among the party and official ranks, corruption has been spreading among the ranks of the broader “united front” that the party has historically relied on for its political legitimacy. Xi may now be facing a new “second front” in the war with corruption. Rather than seeing the gradual de-escalation of Xi’s four-year-old tiger hunt, the anti-corruption crackdown could gain new momentum as Xi shifts from fighting corrupt party cadres and state officials to fight a new threat from the business sector.