1

Xi's Corruption Crackdown

April 3, 2014 Topic: Politics Region: China

Xi's Corruption Crackdown

China's leader is taking on his biggest foe yet. But how far can he go?

Last autumn saw the conclusion of China’s most politically charged trial in decades when former rising political star Bo Xilai was sentenced to life in prison after being found guilty of “bribery, embezzlement and abuse of power”. Looming on the horizon is an even more sensational tale of official corruption that promises to relegate Bo to a lurid footnote. In pursuing former security tsar Zhou Yongkang, President Xi Jinping has given a demonstration of his power and a popular face-value commitment to cleaning house. In doing so he risks further exposing the rotten core of the ruling Communist Party and establishing a worrying precedent for powerful leaders with skeletons in their closets. Former leaders Hu Jintao and Jiang Zemin are
reported to have sent Xi a warning not to overreach or do anything to endanger the Party’s capacity to rule and to stay in power. ="#axzz2xitrwalx">="#axzz2xitrwalx">

Ever since Mao Zedong’s internal rivalries spilled into the streets as the Cultural Revolution, the unwritten rule in Chinese politics has been that current and former members of the Politburo Standing Committee, the apex of political power in China, are immune to investigation. As Teng Biao
puts it, the motto for Chinese officials is “make it to bureau head and you will be spared the death penalty. Make it to the Standing Committee and you will be spared any penalty.” Yet all indications are that we about to witness the breaking of this entrenched Party taboo. The net is slowly closing in on Zhou Yongkang, who served under Hu Jintao until both retired as part of the transition to a new Party leadership in 2012.="#sthash.schkun40.dpuf">="#sthash.schkun40.dpuf">

When Xi Jinping became Secretary General, one of his first acts was to launch an anticorruption campaign that promised to target “flies” (low-ranking officials) and “tigers” (high-ranking officials). Corruption had spiraled out of control under the conservative, constrained leadership of his predecessor Hu, creating bottlenecks in the economy and unrest in an increasingly unequal society. Investigative reports by the New York Times, Bloomberg and other Western media outlets, demonstrate how China’s top leaders and their families have used positions of power and influence to stockpile vast fortunes.

Yet, even by the extravagant standards of Chinese corruption, Zhou was unusually assiduous in his efforts to reap the rewards of high office. It was reported on March 30 that authorities have seized nearly $15 billion assets in assets from Zhou’s family and associates.

The scale of Zhou’s activities aside, it is hard to get worked up over a phenomenon that is so ‘normalized’ that the word corruption barely has any meaning. In reality corruption is the lifeblood of the Communist Party; a vital mechanism that allows it to buy support in exchange for favours in the form of land sales or exclusive access to parts of the economy. It is impossible for the Party to eliminate corruption, because it is too widespread, too entrenched and, in some ways, too useful. As scholarly work on the Chinese leadership
emphasizes, the Party’s priority is to stay in power; corruption helps it to do so.="#.uzvmevldwso">="#.uzvmevldwso">

The Party currently has around eighty million members. As Richard McGregor suggests, if we add their closest family relatives, then perhaps as much as one third of China’s total population has a direct personal stake in the Party’s fortunes. Not all Party members are corrupt, or join the Party for personal interests. But the Party is the only social organization, the only vehicle in Chinese society that can provide such a high degree of social and economic “mobility.” Much of this mobility functions on the corruption spectrum, ranging from building personal networks and exercising guanxi to the egregious nest feathering of which Zhou will inevitably be found guilty.

Corruption lubricates the cogs of the Chinese economy and in many ways entrenches the Party’s control of society. Yet, when Xi took power it was apparent that something needed to be done, at least in the eyes of an increasingly observant and agitated public, to clean up the Party’s act and repair its reputation. Shortly before Xi assumed office, as if to underscore the tenor and unraveling of the Hu era, the son of high-level official died in a flaming Ferrari in the small hours of the Beijing morning. Two female passengers were severely injured—and “all,” reported the New York Times, were “in various states of undress.” As Kerry Brown succinctly puts it, “China under Hu Jintao and Wen Jiabao’s leadership became punch drunk with its newfound wealth.”

Anticorruption campaigns are nothing new for the Party. Although the impact of such campaigns on rooting out the systemic causes of corruption are limited, they are popular, visible and a useful way to settle political scores. Xi’s anticorruption campaign contains all of these elements, but is slightly unusual in two ways. First, it has lasted for close to eighteen months, longer than normal. Second, Xi has targeted high-level officials, including of course Zhou Yongkang, who if convicted would be the highest-ranking “victim” in the post-Mao era.

It is difficult to summon much sympathy for Zhou, all the more so as the government starts to put concrete numbers to his legendary appetite. Zhou was named by Forbes as the twenty-ninth most powerful person in 2011 and compared by the magazine to America’s former vice president Dick Cheney. The magazine did not elaborate if this comparison was based on Zhou’s influence in the domestic security and energy sectors, or the “robust” manner in which he executed his powers. If Xi wanted to court public opinion by nailing a corrupt tiger, he couldn’t have chosen a better target than the unanimously reviled Zhou.

In a country where, according to US-based China scholar Minxin Pei, 97 percent of corrupt officials are dealt with in-house (only 3 percent of cases investigated by the Party are handed over to judicial authorities), arresting Zhou would send a strong message to the current leadership’s political allies and opponents alike. Because, of course, the Party’s anticorruption campaigns are seldom about fighting corruption. They are a vehicle for settling political scores and setting the political tone. Putting the frighteners on low-level officials does indeed appear to be a part of the current campaign, but the pursuit of Zhou has the unmistakable whiff of a political purge about it.

The Zhou case is unusual in that Xi has gone after a large number of Zhou’s associates across his former domains of public security, energy and Sichuan province, and Zhou’s family members, including Zhou’s son, Zhou Bin. According to sources cited by Reuters, some “300 of Zhou's relatives, allies, protégés and staff have also been taken into custody or questioned in the past four months.” This type of ‘spring cleaning’ is almost unheard of—compare the Bo Xilai case, for instance, in which only the major dramatis personae were targeted.

 

Zhou, of course, was an associate of Bo Xilai and had thrown his weight behind Bo’s daring, and ultimately foolhardy, bid for a seat on Xi’s Politburo Standing Committee. A neo-Maoist with a penchant for mass campaigns and nostalgic appeals, Bo would have been an ideological opponent for Xi. Bo’s removal, not only from contention for a place at the top table but from the political scene entirely, cleared the way for Xi’s assumption and consolidation of power. The importance of this maneuvering became even clearer with the unveiling of Xi’s far-reaching, neoliberal economic-reform plan—at odds with Bo’s championing of greater government control over the market—at the Third Plenum, an important Party meeting last year.

Few people believe Bo was not corrupt. At the same time hardly anyone doubts that his removal was politically motivated. Bo’s purge was a major scandal, if only because the contours of the case were so salacious—murder, affairs and plotlines straight out of Ellroy or Chandler. But China’s ‘Trial of the Century’ will pale next to Zhou. Bo, after all, was a ‘mere’ Provincial Party Secretary and member of the second tier of the Politburo. While approaching the top echelons of the Party hierarchy, Bo’s rank was not as high as Zhou’s, and there were precedents for punishing officials of Bo’s level.

Breaking the Standing Committee immunity taboo is highly significant but also risky. Many former Standing Committee members remain powerful behind the scenes and skeletons in those closets are likely aplenty. Xi’s campaign has been very aggressive, and while he currently looks unassailable, he must be accumulating plenty of enemies. And while Xi has secured for himself a lot of institutional power, it remains to be seen how effectively that translates into real executive power. A lot will depend on Xi delivering results, not only in the anticorruption campaign but also more pertinently in the radical and potentially threatening economic reform plan outlined at the Third Plenum. If he doesn’t deliver results, it will weaken him and perhaps embolden those with threatened interests to unite against him.

This risk is one reason why the campaign against Zhou has taken such a long time. It is normal for the Party to proceed with caution, but in this case it has been particularly careful. Zhou’s case is naturally extra-sensitive, due to his rank and his roles in the crucial sectors of internal security and energy. Zhou retains political connections and after ten years as security tsar it is likely that he is in possession of potentially destabilizing information about Party leaders.

This has compelled Xi to go slow and compile an airtight case, which is in keeping with the Party’s penchant for presenting legal fait accompli. By the time the Party announces Zhou’s arrest, a guilty verdict will be inevitable and the remainder of the process will be merely procedural. In ‘normal’ cases, investigations can take many months, and Zhou’s is far from a normal case.

When it comes, Zhou’s arrest will mark the climax of Xi’s anticorruption campaign at the ‘tiger’ end of the scale. Corruption in China is endemic, extending from top to bottom and across all sectors of society and the economy. It is impossible to root out even a tiny percentage of the overall corruption, and Xi will have to stop somewhere. Since to a large extent the Party rules the country by cultivating vested interests, removing too many of these vested interests too rapidly could threaten support for the Party’s continuing rule. The trick is to balance moves to restore the Party’s reputation while redefining the parameters of “acceptable corruption”.

It is difficult to see how Xi can go much further than punishing Zhou and his associates. Although high-profile energy executives have been targeted within the wider Zhou investigation, Xi is unlikely to turn on the powerful quasi-oligarchs of China’s State-Owned Enterprises (SOEs). These SOEs control major economic sectors such as energy, telecoms and finance. The people who run them fill leadership positions with their families and friends, which places entire sectors of the economy in the hands of the few. This causes all kinds of economic inefficiencies and is likely to hinder Xi’s economic reforms, even though he was careful to put off SOE reform to a future juncture.

The sheer abundance of currency, bonds, real estate, cars, gold and antiques already seized from Zhou and his associates is astonishing. Zhou’s long-rumoured abuses of power are equally legendary, and will perhaps come out in the wash at some point. Clearly, in any campaign targeting corruption Zhou would be a candidate nonpareil. Yet the motivation behind the investigation is political. Zhou’s seemingly inevitable conviction will send a political message to Party officials, but will have minimal impact on official corruption, which will require fundamental changes to the political structure and political culture. It may also give a short-term boost to the Party’s image among Chinese citizens. Of course, in the long term, the Party legitimacy will require more systematic reforms, including better accountability mechanisms and meaningful political participation. The biggest impact of the Zhou case may thus be in terms of how it further consolidates Xi’s power and thus his capacity to implement his economic reform package.

Jonathan Sullivan is Associate Professor and Deputy Director of the China Policy Institute, University of Nottingham. Follow him on Twitter: @jonlsullivan.

Image: Flickr/thierry ehrmann. CC BY 2.0.