Something rotten in the state of Han
October 12, 2007 5:03 AM   Subscribe

Corruption Threatens China's Future In a new report for the Carnegie Foundation, Pei Minxin offers an estimate that official corruption in China may cost as much as USD86bln each year - 0.65 percent of GDP and more than the education budget. He calls for economic and political reform; his critics might say no surprise there.
posted by Abiezer (17 comments total) 6 users marked this as a favorite
That interview in the second length is quite good. Can't really see any reason why his predictions there would not come true.
posted by afu at 5:54 AM on October 12, 2007

I teach a high ranking city government official in the richest per-capita city in China. He drives a Honda hatchback. That tells me something. In my year and a half here, the only direct experience with corruption my coworkers and I have had was when an Aussie was given the chance, by police, to liberate and keep a prostitute caught on a train for a negotiable sum. Whenever we've wanted easy bribing, like getting the best visas, it's never been an option. There's a difference between Chinese-Chinese law enforcement interactions and Chinese-Foreigner interactions, but this isn't the Mexico-style Wild West I was expecting.

From what I remember reading in Chinese Politics in the Hu Jintao Era, the stem of the massive corruption in the countryside is cause by a bloated bureaucracy at the local level and extremely low salaries drawn from those locales. Effectively, the only way for the bureaucrats to survive is to fleece the masses with bad land deals and such just enough to not incite burning buildings and cars.

Towards the end of his term, Jiang Zemin tried putting all these bureaucrats on the national bankroll but was forced to stop when the economists showed him how quickly he'd go bankrupt. It's not easy laying off massive sections of civil service without big inter-party conflict and hence instability. Today in Beijing, stability(ism?) is the closest thing to a modern party ideology that you'll find.

I think the biggest change China needs right now, more than democracy, is effective rule of law instead of rule by law. The People being able to take corrupt officials, labor rights violators, and polluters to independent courts and getting the right verdicts.
posted by trinarian at 6:16 AM on October 12, 2007 [1 favorite]

There is a pretty substantial case for some pot kettle labeling here. America is not without its own substantial corruption issues. The problem is that American corruption is largely sanctioned by the government and is predictable and controlled by the American players.

When I read international comparisons of corruption articles I always get a feeling that the underlying sentiment is "Be more like us, and please don't notice that we are not like us either"

86 billion seems like a lot except when compared to Enron, a single American company, whose bogus Energy market inflated purchaser costs by 36 billion in 4 months.
posted by srboisvert at 6:19 AM on October 12, 2007

Wow, I wish our corruption was that cheap. The Iraq war, a product of corruption, has cost $1 trillion so far.

The main problem in the US, because of the FBI corrupt officials can't just grab money and put it in their pockets, they need to do it out in the open. Spend insane amounts of money, and let their friends siphon off those cash streams. (Then, of course, they leave office and their friends let them siphon off. It's the circle of life)
posted by delmoi at 6:29 AM on October 12, 2007

I teach a high ranking city government official in the richest per-capita city in China. He drives a Honda hatchback.

What does his mistress drive?
posted by afu at 6:30 AM on October 12, 2007

I wouldn't disagree with your last there as a viable goal to push for, trinarian. Much of the stuff I've followed about rural land unrest has shown villagers becomng aware of their rights under the law as it stands and pushing for those, with conflict intensifying when they are unable to get them because of extra-judicial interference form vested interests (including local agents of the state).
I did witness all sorts of the kind of corruption Pei talks about whilst working in the countryside. For example, one county head of a transport department once came to ask me fo recommendations for UK universities as he was planning on sending his daughter abroad to study. Not bad on an official salary of a few hundred yuan a month. The county was hit by a taxi driver's strike during my time there, in part sparked by news getting round that the number of toll gates set up on county highways was illegal under national law.
I also remember translating something a while back on the level of indebtedness of township governments - it was something like an average equivalent to ten year's income across a ten-province survey. A large chunk of it was due to wining and dining, getting ?? jobs for relatives which tallies with your point about the grassroots bureaucracy. They will have to trim this at some point. I recall one polemic on the subject pointing out that at admin levels where in China you might have a couple of hundred or more on the payroll, the R.O. Korea was making do with two or three officials. I suspect the long-term goal is for the experiments in village democracy to be extended upwards, and this has indeed happened in a few locales I'm aware of. These may turn out to be similar to the local experiments in Anhui that led to the household contract land reforms in the 80s.
I have a big macro-economy piece to finish over the weekend - if I learn anything relevant from that, I'll add it. Sometimes I feel the more I read, the less I know.
posted by Abiezer at 6:32 AM on October 12, 2007

Hmm, it eat my Unicode there. Teach me to show off.
posted by Abiezer at 6:34 AM on October 12, 2007

Wow, I wish our corruption was that cheap.

If the yen is ever properly revalued, we should see something closer to purchase price parity.
posted by psmealey at 7:50 AM on October 12, 2007

purchase price purchasing power
posted by psmealey at 7:50 AM on October 12, 2007

A bit of historical perspective.
posted by rhymer at 9:35 AM on October 12, 2007

If China's anything like Viet Nam (or vice versa), then corruption is how the system works: to attend police academy you need to take out loans to bribe officials; that's because a high-up cop here lives off the fat of the land, despite their $40 a month salary.

Very little works without envelopes to grease the wheels, but the only time anyone makes a fuss about it is when some Party bigwig gets caught embezzling too much (think millions). The Party likes to portray itself as pure, hence the occasional pantomime villain as the exception that proves the rule.

As was mentioned above, clearly stated and fairly applied laws could change the situation dramatically.

For those who say that America is no different, I think this point is the difference. It is</em possible for the little guy in the US to fight the system and win. Here, not so much.
posted by grubby at 9:38 AM on October 12, 2007

I think to some large degree people need corruption there--most people don't have any illusions about getting rich, but they like to think that they can get a steady government gig with some cash flow on the side.

We like to think we're all upstanding, moral individuals here in the US. I don't think we'd be anything close to that if we started getting hungry...
posted by mullingitover at 9:53 AM on October 12, 2007

For those who say that America is no different, I think this point is the difference. It is possible for the little guy in the US to fight the system and win.

Please show examples from the last 4-5 years, please. It would improve my current mood.
posted by wendell at 3:29 PM on October 12, 2007

oop... first paragraph there is quoting grubby... my italic skills are failing me as badly as his.
posted by wendell at 3:30 PM on October 12, 2007

It is possible for the little guy in the US to fight the system and win.

I think Dick Cheney is only about 5'9".
posted by psmealey at 3:34 PM on October 12, 2007

New report from Reporters Without Borders: CHINA: Journey to the heart of Internet censorship
posted by homunculus at 4:09 PM on October 12, 2007

wendell: you'd have to look in the small-town dailies to see those kind of stories. They don't make the news because they are unremarkable. Compare that to the unremarkable stories that don't make the news here (for different reasons): land theft, random on-the-spot fines for imaginary traffic offences, etc.

Any time somebody wins a class action suit or gets a cop dismissed for brutality - any time there's a product recall, for heavens' sake, that's the system working.

I know that there's been a lot of erosion of that recently, but have the the gains really all gone?
posted by grubby at 7:36 PM on October 12, 2007

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