CORRUPTION IN CHINA
In 2011 the anti-corruption group Transparency International ranked China 78th out of 178 countries in its corruption perception index, worse than countries like Romania, Turkey and Rwanda. In the past it had ranked much higher.
It is estimated that China loses $86 billion a year to corruption. Corruption accounts for an estimated 3 percent to 15 percent of China’s $7 trillion economy in lost taxes and stolen government funds. Minxin Pei of the Carnegie Endowment for International Peace in Washington estimates that 10 percent of government spending goes to corruption. Contracts and are other transactions often feature kickbacks or bribes or money that is outright stolen. Pei estimates that the chances of a corrupt official going to jail is about 3 percent, which he said makes “corruption a high-return, low risk activity.”
Economist Wang Xiaoli has estimated that the unreported and untaxed “gray income” of government officials was about $800 billion. According to a 2011 edition of the respected Hurun Report, the richest 70 of China’s parliamentarians boast a combined wealth of 493.1 billion yuan ($75.1 billion). By contrast, the assets of the 70 most well-heeled members of the U.S. Congress add up to no more than $4.8 billion.
A popular saying goes "As all are on the take, then let us take from all." Corruption takes many forms: bribes, kickbacks, fees, hurry up money, sweetheart deals. “Holiday corruption” is a term used to describe bribes given in the form of traditional gifts during holidays such as the lunar New Year often in the form of “hongbao”, red envelopes that traditionally contain gifts of money. One American businessman told Newsweek, "Clients tell us that acting illegally is the way it's done in China."
Although corruption does not seem to affect China’s economic growth it does undermine the soundness of the system and make it vulnerable to instability, crises and even collapse. It also makes investors suspicious and reluctant to invest their money.
Corruption is often at least partly to blame for social unrest, and environmental and health problems. A poll conducted by the Pew Research Center before the 2008 Olympics found that 78 percent of the Chinese interviewed said they were concerned about corrupt officials. Many feel that corruption and the public reaction to corruption is the No. 1 threat to Communist Party rule. Many people feel the Communist party could lose support and eventually lose power because of corruption. Corruption ranks among the main grievances among ordinary Chinese.
Corruption undermines the authority of the government, fuels resentment and creates massive economic distortions. One study said corruption inside China was severe enough to threaten the nation's economic and political stability. In a survey in 2001, 41 percent of the respondents said that corruption was the major cause of instability in China. President Hu Jintao has spoken out on the issue several times but has failed to take concrete action to solve the problem. [Source: AP, June 17, 2011]
Websites and Sources: Carnegie Endowment.orgcarnegieendowment.org ; Wikipedia article Wikipedia ;Transparency International transparency.org; Book Chapter on on Chinese Corruption PDF File piie.com/publications
Zhou Hau's Transition Period, a Film About Corruption in China
“ Transition Period “, by journalist-turned-filmmaker Zhou Hau, (2009) vividly captures Chinese corruption and cronyism. A prizewinner at this year’s Hong Kong Documentary Festival, The Transition Period is a startlingly candid portrait of Guo Yongchang, a Chinese Communist Party county secretary who eventually was convicted on corruption charges. We see Guo discuss how to split tax revenue with lower-level officials, smear cake on the face of an American businessman seeking favors, and threaten local workers protesting over unpaid wages.
On “ The Transition Period “, Kevin Lee of dGenerate Films wrote, “Zhou Hao takes the all-seeing mission of China’s DV documentary movement into a realm no one could have imagined possible to infiltrate: the inner workings of Communist Party politics. With an impassive objectivity worthy of Frederick Wiseman, Zhou takes advantage of an outgoing county official’s hubris to quietly record his wheelings and dealings with commercial and political interests en route to his provincial-level promotion. What is revealed may not be surprising to those familiar to CCP corruption — expensive banquets held for private investors, officials trying to outdo each other with their vanity development projects, field visits with state limos plowing heedlessly through crowds of angry citizens whose land is being requisitioned for said developments — but to see it all on video is astounding.” [Source: Kevin Lee, dGenerate Films]
On his film “Tape” (2010) director Li Ning writes: “After many years, my research into the use of tape reached a point of obsession and madness. It was the focus of my entire life at home and on stage. It preoccupied my thoughts and my work. In China, a land of magical illusions, what I am doing is destined to become ridiculous and absurd. Through encounters with major events in many countries and my own extreme behavior in and out of performance installations, I have finally married reality and surreal art into a seamless realm. But in the end, I have become just another photo pasted on an employment form, forced to function in society as part of the machine.”
Scale of Corruption in China
Chinese officials misused or embezzled about $35 billion in government money in the first 11 months of the year, according to a national audit released this week. The announcement is the latest indication of how widespread corruption has become among government agencies and how difficult it will be for Beijing to root it out. [Source: David Barboza, New York Times, December 29, 2009]
The National Audit Office, which carried out the examination, did not disclose the size of the budgets reviewed this year. But the agency, which is based in Beijing, said that it surveyed nearly 100,000 government departments and state-owned companies, and that more than 1,000 officials were facing prosecution or disciplinary action because of the audits.
Experts say the audits revealed one thing: many in government are finding ways to steal public money. Auditors said government officials engaged in everything from money laundering and issuing fraudulent loans to cheating the government through the sale or purchase of state land or mining rights. Criminals are now more intelligent, and covert, Liu Jiayi, the director of the National Audit Office, was quoted as saying in the state-run news media.
In 2005, the National Audit Office reported finding about $35 billion worth of government funds misused or embezzled. That was the last year the office gave a national figure covering its audits, according to its Web site.
Views on Corruption in China
Wang Dang, a student leader at Tiananmen Square and a Harvard PhD. wrote: “Today in China, corruption is endemic because the Chinese Communist Party and its vast networks of officials remain above the law.”
Corruption is a major problem in developing countries, especially ones with nationalized economies, authoritarian governments and recently democratized societies. Studies have shown that cultures around the world have similar perceptions that corruption is fundamentally wrong. Scholars therefore perceive corruption as not a cultural flaw but a symptom of a sick state.
Some scholars believe that corruption helps "grease the wheels" of a an otherwise inefficient bureaucracy and economy. Companies that do business in places were corruption exists often say they have no choice but to pay bribes and kickbacks because that is the way business is done.
Most scholars believe that corruption hinders development and is inefficient economically. A Harvard study that undermines the "grease" theory found that "firms that pay more bribes are also likely to spend more, not less, management time with bureaucrats negotiating regulations and face a higher, not lower, cost of capital."
The Chinese public is generally resentful. Jaime FlorCruz of , CNN wrote: With most of the populace suffering from rising inflation, complaining of the gap between the rich and the poor and worrying about their economic future, resentment of corruption is high. One popular saying in Beijing puts it bluntly: "If the Party executes every official for corruption, it will overdo a little; but if the Party executes every other official for corruption, it cannot go wrong." A public opinion survey conducted by Horizon Research Consultancy last year cites corruption as the worst problem tarnishing China's image. [Source: CNN June 25, 2011]
Solutions to ingrained corruption include raising the salaries of bureaucrats and policemen so they don’t depend on corruption for income and increasing transparency in government and business. Scholars debate whether corruption is a stage that countries pass through or condition that paralyzes a country for a long time.
Liu Bolin, China’s Invisible Man artist
Under the ancient Chinese system of patronage, which is still followed to some extent today, officials received appointments from above in return for remuneration from below. And people who collected taxes and other payments kept some for themselves and passed on the rest to their superiors.
Some argue that China’s corruption culture is partly based in the Confucian emphasis on loyalty to family and friends and fact that these things have precedence over rule of law, which is seen as malleable not absolute
The Communist party has traditionally laid claim to power in part because it claimed to be incorruptible. There was little corruption during the Mao era. Many Chinese believe that Deng's statement "To get rich is glorious" gave tacit approval to corruption. Corruption is increasing and the amount of money and the number of people involved are increasing.
Ian Buruma wrote in the New York Times magazine. "Without opposition, party cadres can do more or less what the like in the semi-capitalist casino of contemporary China...Anyone who dares to protest can be swiftly arrested."
Corruption in China often involves very senior officials and groups rather than individuals. The Shanghai pension scandal revealed in 2006 involved 20 people and included some of the most senior officials in Shanghai.
Reasons for Corruption in China
The Communist system in China depends on legions of police, local party and government officials to enforce Beijing’s policies and squash dissent. Because of this Beijing needs these people and is reluctant to crack down on them as aggressively as it could.
Tang Jingling, a Guangzhou-based activist, told the Los Angeles Times, “Even if the central government wanted to see justice carried out at the village level, it is afraid of losing the support of local officials. They need them to control society since they’re scared to death of any sort of unrest. And to do that, they must let them run their fiefdoms.”
Party membership increased 10 percent between 2002 and 2007. Some say that profits has been a major motivation with party membership often viewed as opportunity to take bribes and profit from coercible land deals.
Some have blamed Deng Xiaoping’s reforms for creating the climate for corruption to take hold in China but others have said the blame should be put on Mao Zedong who created the privilege-based political system that lies at the heart of China’s corruption problem.
Jaime FlorCruz of , CNN wrote: “Rampant corruption, officials say, is an unintended consequence of change. "We're in the midst of major socioeconomic transformation," said Wu, the anti-corruption official. "We are at a stage where corruption is frequent and prone to happen." [Source: CNN June 25, 2011]
We're in the midst of major socioeconomic transformation — Wu Yuliang, deputy secretary, CPC Central Commission for Discipline Inspection "In the centrally planned economy," retired official Tang Wenjun said, "there was no market and the government officials could not sell or buy much of anything." Now, it's different. Corruption thrives, he says, in part because opportunities have expanded.
The economic boom and the general rise in prosperity have made bureaucrats increasingly greedy. The result is corruption on a scale more pervasive than the founders of the Communist Party could ever have imagined. Graft and corruption includes nepotism, accepting bribes and kickbacks, lavish spending of public funds, and laundering of profits and public money overseas. Official abuse extends to all levels of officialdom, in and outside the party.
Increasing Corruption and What It Says About Chinese Society
"Corruption is growing all the time, because people and the country are growing richer," said Liao Ran, program officer for China and South Asia at Transparency International, a nongovernmental anti-corruption organization based in Berlin. Despite real efforts by the government, which include regular anti-corruption drives, detailed legislation and, its first anti-corruption white paper, corruption is just part of the system, Mr. Liao said. [Source: Didi Kirsten Tatlow , New York Times, August 24, 2011]
Corruption is morally ugly, Mr. Fu warned. It also increases costs. "A society that relies on guanxi to get things done is a scary place," he said. "When guanxi becomes stronger than rules, it’s dangerous to everyone. Why? Because if you use your guanxi, I’ll use my guanxi, and in the end the price of everything rises. When there are no rules, then everything is a competition, and those with more power win," he said.
"Guanxi is alive and kicking," said Sarah Köchling of Whatif, an innovation consulting company in Shanghai. As China’s economy expands and becomes globalized, she said, people ask, "Is it going to reduce in importance?" "I think it’s going to grow," said Ms. Köchling, who has lived in Asia for more than 20 years.
Wrote Mr. Fu: "Everyone knows that 10 years ago, success was 30 percent guanxi and 70 percent talent. Today, to succeed, you can reverse the ratio. Seventy percent guanxi and 30 percent talent will do." Mr. Fu sees himself as both perpetrator and victim. A former philosophy student, he left his job in the human resources department of his alma mater, Xiangtan University, in 1992. "Had I remained a bureaucrat, I’d definitely have become corrupt," he wrote. "The reason is simple": Virtually everyone offered bribes.
"You can resist temptation once," he wrote, "but not a hundred or a thousand times." He went into business, eventually becoming the legal representative of an auction company, which he declined to name. Bribing officials was part of the job. By 2003, Mr. Fu had become enmeshed in a major corruption scandal involving justice system officials. "Friends" sold him out to the authorities. Jailed for 300 days, he thought up his first novel, he said.
Small Scale Corruption in China
Tania Branigan wrote in The Guardian, “It is not just the news stories of multimillion-yuan bribes that cause bitterness. It is personal experience: from the migrant worker saving for illicit "fees" so her child can go to a school that should be free to the entrepreneur who closed down a lucrative government-supply business because he was tired of buying officials drink-soaked dinners.”
Small scale corruption is everywhere in China. Local officials routinely siphon public funds and then doctor the books to cover up their tracks. Telephone installers demand $500 to hook-up a phone that otherwise might take a year to install. Plum jobs are often handed to children, spouses, cousins and friends. An Asian diplomat told Time, "Everyone is on the take from top bureaucrats to doctors and waitresses."
Mark Magnier wrote in the Los Angeles Times, “Cashed-stuffed “red envelopes” can ensure that doctors do their best in he operating room, or that you?ll pass a driving test even though you?ve never left the parking lot. " It is a routine practice for businesses to bribe reporters to print favorable newspaper stories. Police have been given cars in exchange for their silence on controversial matters. Drug dealers say they can usually escape arrest by paying off policemen. There are also stories of local officials embezzling money and gambling it away at border casinos; embezzling grain-purchase funds and paying peasants with IOUs; and claiming they are so poor they can't afford shoelaces while driving around in expensive Japanese-made SUVs.
Mark Magnier wrote in the Los Angeles Times, “Executive say government and party officials demand payments and abuse their power to award contracts and issue permits. Companies that lowball or otherwise anger officials learn quickly that the most routine inspection can turn into a nightmare...Though cash is straightforward, executives said gifts of department store and restaurant vouchers are more difficult to trace, as are artwork and stock, paid”study? trips, prostitutes or paying overseas tuition of officials’ children.”
Small companies can avoid a $1,400 tax by paying a $140 bribe One businesswoman told the Los Angeles Times, “Even if you have a lease for 50 years, they can take it back tomorrow.”
It is not uncommon to find a local Communist Party Secretary, whose salary is about $450 a month, living in a five-story mansion, own several other large houses and have investments in other businesses and property.
Some corrupt officials have reportedly pocketed the resettlement money intended for people displaced by the Three Gorges Dam or invested it in other projects. One woman told Zich, "We're supposed to get 5,000 yuan ($600) a head for resettlement. The central government gives the money to our provincial officials. They give it to the county, and the county gives it to the city bosses. But as it goes down the line, each official takes his cut. Who knows what will be left by the time it gets to us?"
Corrupt Business Practices in China
Businesses routinely publish fake company reports and perform false audits. Employees in purchasing and finance routinely are given kickbacks by suppliers. Personnel departments take money in return for jobs and interviews. Businessmen routinely bribe officials in key posts with real estate, cars and stakes in lucrative businesses. To win their favor government officials are given stocks as gifts, sold houses at ridiculously low prices, and are allowed to win at gambling
Bribing and feasting are often required to get anything done. Secretaries receive payment from travel agencies for using them to book flights for their bosses; receptionists take money to refer calls to rival firms. These practices are regarded as socially acceptable ways for ordinary people to supplement their incomes and save for retirement.
Managers brazenly transfer assets to themselves. According to one government agency more than a third of the companies listed on the Shanghai stock exchange have lent money to majority shareholders or transferred assets to managers resulting in billions of dollars of losses.
Data is routinely hidden or inflated. Managers are often hostile to minority shareholders and deny them dividends. Some use capital from selling their shares to start competing businesses. Others shift revenues from one firm they own to another, leaving shareholders with the losses. The belated disclosures about such practices rattle investors confidence just as much as corruption itself.
Those with something that others need try to use their position to cheat those in need. A hotel manager said he was told he had to pay a bribe to get gas in his hotel. He told the Los Angeles Times he refused and switched to higher cost diesel. “We have to be defiant and not be afraid.”
Corrupt officials and businessmen routinely use the police as their hired guns and pressure judges into putting innocent people behind bars. Problems such as illegal land seizure are the work of deals between developers and local officials. One Chinese economist told the Washington Post, “The government has the power and investors have the money. They join up and together extract all the benefits?.
A Chinese news reporter told the Yomiuri Shimbun. “They form groups to share the profit. And those that refuse to take a cut face danger.”
Bribes in China
Chinese and Russian firms are the most likely to pay bribes while operating abroad according to Transparency International's 2011 'Bribe Payers' Index,' which says corruption occurs most in public works contracts and construction. The countries with the lowest rates of bribery are Holland, Switzerland, Belgium, Germany and Japan. [Source: Sky. News, November 2, 2011]
The study saw 3,016 business executives in 30 different nations asked how often companies based in countries in the survey engaged in bribery. They gave scores ranging from 0 for 'always' to 10 for 'never'. According to the survey the Worst Five Countries For Bribery are 1) Russia, 2) China, 3) Indonesia, 4) Mexico and 5) UAE.
"India's score improved the most, with an increase of 0.7, but it still remains near the bottom of the table," said the report. The countries were selected by the value of their foreign direct investments and exports, plus their regional significance. Transparency International's Huguette Labelle said “governments must tackle foreign bribery as a matter of urgency...It is of particular concern that China and Russia are at the bottom of the index."
Guide to Proper Guanxi
Didi Kirsten Tatlow wrote in the New York Times, “Chinese are masters of "guanxi," or connections, using the art of relationships “and its close companion, corruption “to secure everything from safe childbirth to a prestigious burial, taking in education, jobs, a fancy home and a Porsche Cayenne S.U.V. along the way. That’s the popular wisdom, held by many Chinese and non-Chinese alike. [Source: Didi Kirsten Tatlow , New York Times, August 24, 2011]
"Chinese people are good at guanxi," said the novelist Fu Shi, whose real name is Hu Gang. "Of course, it’s not just a Chinese speciality. It exists in the West, in the United States, too. But in China, it’s just deeper." Fu wrote "Chinese Guanxi," an advice book that teaches people how to cultivate social connections with dinners, expensive gifts and "red packets," or cash-filled envelopes” Don’t they already know?
"Some people are real masters at it, and some aren’t. Not everyone is an expert," the novelist said by telephone from his home in Changsha, the capital of Hunan Province. "I want to help the weak ones advance and take away the oxygen from the experts," he said. For Mr. Fu is no mere peddler of corrupt ideals, with a dystopic solution to a serious problem. His goal is to create a new kind of level playing field, where everyone benefits from an unfair arrangement by exploiting it equally. In other words: Fight fire with fire, and corruption with ... more corruption. The approach reflects what experts say is widespread cynicism about the chances of curbing corruption, in the absence of independent monitoring agencies or free news media.
Mr. Fu’s first piece of advice: Don’t be shy. "You can use people at any time and any place. And they can use you, too," he writes. Chapters include: inviting powerful people to dinner (do not get your guest too drunk, he might forget what you talked about); giving red packets (de rigueur in hospitals); and giving gifts (present in person, shut the doors and windows first). The book was published in June, and people flocked to book signings in Changsha in July, according to ent.changsha.cn, an entertainment news portal.
Mr. Fu’s first novel, "Green Porcelain," released in 2006, about guanxi in an auction house, sold more than a million copies and was serialized by the Web portal Sina.com, earning Mr. Fu nearly 4 million renminbi, he wrote.
He has since published another, "Red Sleeve," and plans two more “a guanxi quartet. Each has a color in the title: green, red, black or white. Together, the words form a Chinese expression meaning "right and wrong." For now, absent real solutions, he says, the only hope is to publicize guanxi’s tricks. That way the socially skilled lose their advantage over the socially inept. "Build a new set of rules," he wrote. "Make these things more open, transparent, and, in this way, more free, equal and fair."
Corruption in Schools
Schools routinely solicit off-the-book donations for books, uniforms and lunches. Teachers who teach classes in subjects heavily weighted on entrance exams can solicit large bribes. One education official told the Los Angeles Times, “If there are 50 students and 40 give gifts, you definitely don’t try very hard with the other 10. Unfortunately, that’s our system.”
Describing how the education system works in Foshan, city in Guangdong Province, one mother told the Los Angeles Times that when her son was ready for primary school she was worried about him getting in so she found a friend who knew a senior local education official. The mother visited the official’s office, left about $70 on his desk, didn’t say much, and left. Her son was accepted. When it came time for her son to enter middle school she had to work harder because her son didn’t do so well on his entrance exams. Friends of hers were enticed wine and dine key officials and pave the way for distributing $1,200 among education officials and make a $1,600 “donation” to the school he son won admission to. When it was time to enter high school, she spent thousands of dollars in an attempt to get him into a first-rate school but ultimately failed and had to settle for a less prestigious school.
Liao Mengjun, a 15-year-old middle school student in Foshan, was found dead with his forehead bashed in, his right knee bones jutting through his skins, two broken arms, stab wounds and internal injuries, His index finger had been slashed in what may have been an attempt to get him to write something in his own blood. His parents think his killers were his teachers who were upset by the parents’ public complaints about unauthorized fees and systematic corruption in schools. [Source: Mark Magnier, Los Angeles Times, January 2009]
Liao Mengjun’s father, Liao Zusheng, a former soldier and Communist Party official, drew the ire of his son’s school, Huangqi Middle School, after he spoke out against the school for trying to collect a $3,000"selection fee’ the school tried to collect without a receipt. He also posted several essay on the Internet that complained about corruption and fraud in China as a whole.
The school said Mengjun was caught stealing, attacked his teacher and committed suicide. His parents did their own investigation and determined that a dean at the school, two teachers and school guards beat up their son. They worked tirelessly and were able to gain access to their son’s autopsy report and gather testimonies of witnesses before they were intimidated by police. When they began pursuing the issue they were offered $20,000 by local officials to keep quiet and then that sum was jacked up to $50,000 and then $70,000 when they refused and continued push forward for justice.
Mistresses and Corruption in China
In China, sex, corruption and money are often intertwined. Many money scandals have a sexual element. One Chinese expression goes: Where there is corruption, there’s sex. And where there’s sex, there’s corruption. A wife who was dumped for a mistress said, “Mistresses are always lurking in shadows of corruption cases. If you don’t have money, you can’t hold on to your mistress.”
Corrupt officials often have mistresses and”second wives,” who are often blamed for driving officials to take bribes or embezzle money. One survey found that 95 percent of Chinese officials convicted of corruption had mistresses. Most of the officials were involved in “trading power for sex,” gambling, money laundering, and involvement in shady land deals. Another survey found that nearly 2,000 officials in Hunan Province were found to have broken the one-child policy. Many had second, third and forth children with their mistresses.
In 2000, the head of Jiangsu Construction Bureau, Xu Qiyai, was caught up in a corruption scandal and found to have had relations with over 100 women, including a mother and daughter. Lin Longfei, the former Communist Party secretary of Zhiunding County, in Fujian Province kept 22 mistresses at the same time and held a banquet for all of them in May 2002.
In some cases officials have turned to corruption and bribe-taking to support multiple mistresses. In other cases concubines are blamed for leading their lovers astray. Experts on teh matter say that sex is an element of corruption but not a cause. One Chinese sociologist told Newsweek, “Sex is not the reason why officials are corrupt. In their eyes concubines and mistresses are commodities, like a Mercedes-Benz or a villa...Corruption arises out of greed, not lust.”
Boozy Government-Run Parties in China
There have been newspaper stories about parties atteneded by government officials with excessive drinking led to deaths of revelers. Other bashes were memorialized in a diary that ended up on the Internet - allegedly written by an official who was later arrested - chronicling casual sex, drinking and under-the-table payments at parties.
Lavish official tours to Las Vegas and other places cost taxpayers about 400 billion yuan ($58 billion) every year, according to state broadcaster CCTV. On one such trip two years ago, officials spent taxpayers’ money on a $700-a-night Las Vegas hotel and visits to a San Francisco sex show.
In February 2011, 33 officials from the salt business administration in Hainan Province were disciplined for spending $100,000 on a two-week visit to Europe. The officials wer among 515 public servants from Hainan that were disciplined in 2010. Of these only 36 were sent to prosecuters, The other 479 recived demerits, The 33 officials who went to Europe were required to pay back the $100,000. It reached a point where President Hu Jintao gave a speech in April 2010 warning officials of the temptations of beautiful women, money and power.
A Chinese legislator fed up with money wasted on wining and dining proposed making the”squandering of public funds” a crime, Zhao Linzging a delegate with the national people’s Congress, told the Worker’s Daily, “Public spending on eating and drinking are a waste of social assets. We need to criminalize this by law, so I prose amending the criminal law and introducing the crime of wantonly squandering public funds.
Crack Down on Boozy Government-Run Parties in China
In December 2010, the Chinese government said it would crackdown on lavish parties and seminars organized by government officials in apparenst resonse to pubci nager over sex- and alcohol-fueled parties paid by taxpayers. A Chinese official said the effort was part of special campaign was under way to “eradicate the phenomenon of extravagance and waste.” [Source: AP, December 20, 2011]
The government has said some progress has been made fighting parting at the taxpayers expense. Spending of public money on overseas junkets, receptions and cars declined 5.7 billion yuan ($860 million) in 2010, according to Wu Yuliang, the ruling Communist Party’s top corruption-fighting official. He did not say how much was spent on such activities overall. Wu said 113,000 officials were punished this year for corruption, with more than 4,300 cases transferred to judicial authorities for possible legal action.
Communist Party Luxury Cars
Barbara Demick wrote in the Los Angeles Times, “Even the police are driving Porsches. Chinese officials love their cars — big, fancy, expensive cars. A chocolate-colored Bentley worth $560,000 is cruising the streets of Beijing with license plates indicating it is registered to Zhongnanhai, the Communist Party headquarters. The armed police, who handle riots and crowd control, have the same model of Bentley in blue. And just in case it needs to go racing off to war, the Chinese army has a black Maserati that sells in China for $330,000. [Source: Barbara Demick, Los Angeles Times, January 8, 2012]
"Corruption on wheels is an accurate description of this problem," said Wang Yukai, a professor at the Chinese Academy of Governance in Beijing, who has been advocating restrictions on officials' cars for years. The Chinese government doesn't release figures, but automobile industry analysts here say that spending for cars tops $15 billion annually, while some scholars believe the figure is many times that amount. Even at more conservative estimates, the figure is greater than that allocated for low-income housing or for scientific research and development.
The Audi A6 is the semiofficial car of the Chinese Communist Party; the German automaker's parent, Volkswagen, was an early entry in the 1980s into the Chinese market. According to industry analysts, there are more than 100,000 A6s in China, about 20 percent of them owned by the government. Each car costs $50,000 to $100,000, depending on engine size. For the cops, luxury SUVs are all the rage. In the southern city of Guangzhou, police were photographed driving a Mercedes-Benz SUV, while those in the northeastern province of Jilin have another deluxe SUV, the Porsche Cayenne.
Outrage Over Communist Party Luxury Cars
Barbara Demick wrote in the Los Angeles Times, “A remnant of a decades-old party perks system, the luxe wheels are a conspicuous target of growing public outrage over the privileges of the elite. Armed with cellphone cameras, angry Chinese have started posting photographs of the expensive government cars — identifiable by their license plates — on a microblog site called Anti-Official Cars Extravagance that was set up in August. (Government censors shut down an earlier version of the same site.) [Source: Barbara Demick, Los Angeles Times, January 8, 2012]
Anger over fancy government cars has been piqued by a spate of tragic accidents in recent months involving overloaded school buses. In the worst of them, 21 kindergartners were killed in Gansu province in November in a van that was designed for nine passengers but was carrying 62 children.
"Every time I see a school bus accident and think about the great many government Audi A6s on the street, I shake my head and sigh," one microblogger who uses the name Minxingdie wrote after the accident. After seeing photographs of police driving fancy cars one contributor to the car-outrage website remarked: "No wonder there's no money left for school buses!". The commentators were particularly scathing about the expensive cars with military plates. "Why does the military need sports cars? Will it help them run faster when there's a war?"
Photographs also showed cars with government, police and military plates clearly being used on personal business: dropping off children at school, at a shopping mall, on a family vacation. "You can't get evidence about other kinds of corruption, such as people accepting envelopes of cash, but this you easily see for yourself," explained the Guangzhou-based activist who started the website in response to emailed questions. He did not wish to be identified.
Communist Party Luxury Car Perk System
Ren Jianmin, a professor at Beijing's Tsinghua University, told the Los Angeles Times that the high spending on cars, is the result of a system set up by the Communist Party in the 1940s to allocate perks to ranking members. "The system dictates that once an official reaches a certain level, he must be equipped with certain things, such as cars and, in the past, houses," Ren said. "This system led to a huge number of government cars. " [Source: Barbara Demick, Los Angeles Times, January 8, 2012]
Although in theory a government car is for official business, most bureaucrats treat the car as their own to do with as they wish. Regulations that limit the use of the car to working hours are widely disregarded. "The Chinese officials don't distinguish between business and personal use," Ren said.
In addition, use of the car engenders more opportunities for corruption. Once they have a car, officials will hire a chauffeur and run up large bills for gasoline and so-called repairs. "Somebody could go to the repair shop and buy a TV for himself and get reimbursed from the government" for repairs, Ren said. "Many pay little, but they get reimbursed a lot. There are a lot of secrets in the receipts."
CCTV Building Fire and Corruption
The case of a fire caused by fireworks at the fire that charred a 30-story Television Communication Center in Beijing offers some insights into how corruption works in municipal offices. According to Caijing Magazine the spectacular fire “may have burned the cover off questionable financial deals tied to China Central Television executives and its new headquarters.” While pursuing criminal charges connected to the February 2009 fire investigators have focused on possible financial corruption involving high-level executives.” [Source: Ouyang Hongliang and Luo Changping, Caijing Magazine, March 3, 2009]
A key figure for investigators is Xu Wei, the CCTV building construction project director who was arrested shortly after the fire. Xu allegedly approved the Chinese New Year fireworks show at the building site that officials say sparked the flames that spread through the unoccupied building.
Xu, a 20-year veteran of CCTV, was appointed the network’s technical department director in December 2000 and was named construction project director three years later. Authorities also have looked into Xu’s close friend and old college chum Li Xiaoming, who had served as CCTV’s vice director. Li was questioned by police the night of the fire as well as the next day. Xu also worked as the legal representative of a construction company in charge of the complex project called CCTV Gauging, a joint venture formed in 2003 by CCTV and a building company named Beijing Gauging Consultants Co. Ltd. In this capacity, Xu was handed control of a 20 billion yuan CCTV construction fund.
According to a preliminary investigation, Xu earned a commission of about 80,000 yuan from CCTV’s purchase of fireworks for the February 9 show, which was handled by the San Xiang fireworks company. Caijing learned that a fireworks commission may be as high as 30 percent. The network said the holiday show cost 1 million yuan, but a source told Caijing the actual cost was about 350,000 yuan. Similar displays cost 300,000 yuan in 2007 and 500,000 yuan in 2008. A source said the same company every year sold the fireworks for CCTV’s shows. Police investigators found the money used to purchase the fireworks was transferred to an account held by a media technical company called Da Xin Heng Tai, for which Xu was the first legal representative.
“Da Xin Heng Tai was set up in January 2006 with an investment of 5 million yuan from CCTV Gauging. It then went through a fishy privatization. On April 12, 2006, CCTV Gauging transferred Da Xin Heng Tai’s stock to another media company called Ying Xiang, which provided CCTV advertisement services, consulting and training. But Ying Xiang withdrew its investment after finishing two CCTV projects and transferred the stock to five of Xu’s close friends, Caijing learned. According to Da Xin Heng Tai’s public information, the company has managed at least seven CCTV projects and received more than 100 million yuan in payments from the TV network.
I Want to Be a Corrupt Official
In 2009, a six-year-old girl from Guangzhou in Guangdong Province drew quite a bit of attention on her first day of school when she said she wants to be a “corrupt official” when she grows up, state media said. [Source: AFP, Straits Times, September 4, 2009]
The young student stated her aspirations in a televised interview that was posted on a southern China website, leading bloggers to describe her comments as “a reflection of social reality,” the Southern Metropolis Daily reported.
Numerous other children appearing in the video were asked the same question, with many saying they wanted to become teachers, while others said they were not sure what they wanted to be when they grew up.
“When I grow up I want to be an official,” said the girl. “What kind of official?,” the interviewer asked. “A corrupt official because mama says corrupt officials have a lot of things,” she replied. Here's the video: http://www.youtube.com/watch?v=GvEsBcGUlCE&eurl
Paintings and Video Games with Corrupt Officials
Reporting from Shenzhen, James Pomfret wrote in Reuters Life!: “In a dingy studio flat in southern China, a half-naked painter dabs his brush gently over a portrait of Fu Yunsheng, a land official in northern China sentenced to death for embezzling millions. Squatting while dragging silently on a cigarette, the artist finishes the stark, smiling portrait rendered in the reddish-pink hue of China's 100 yuan banknotes, before stapling it to a wall beside six other portraits of disgraced officials including the toppled former mayor of the southern boomtown of Shenzhen, Xu Zongheng. [Source: James Pomfret, Reuters Life!, May 2, 2011]
"I'm a little bit afraid," said the artist, surnamed Tang, of his participation in the daring but as yet underground art project to paint several thousand portraits of government officials prosecuted for graft in recent years. The stark, monochromatic portraits, painted by a team of artists in Shenzhen's Dafen village — known for its mass-produced knock-offs of iconic Western paintings — are the brainchild of outspoken artist and film-maker Zhang Bingjian.
"I was shocked," said Zhang, who based the concept on the wall-lined portraits of basketball legends in the NBA Hall of Fame in the United States, and has seen the number of portraits of jailed officials steadily climb to over one thousand. "I never thought there could be that many corrupt officials in China." He has collected the names of more than 2,500 officials.
An online game called “Incorruptible Fighter” — in which players can torture and kill corrupt officials — has proven to be very popular in China. The game was established by China authorities in Zhejain Province to teach ordinary people about dangers of corruption. Player advance and ultimately reach a corruption-free paradise by killing officials and their children with “weapons, magic or torture” based on well-known incidents from Chinese history. One player told AFP, “I feel a great sense of achievement when I punish lots of evil officials.”
Why Can’t Chinese Officials Be Like That
An I-phone photo in 2011 of Gary Lock, U.S. ambassador to China, carrying his own backpack and ordering his own coffee at an airport caused something of an Internet sensation in China when it was posted on a social networking site, raising question about why Chinese official couldn’t act with same frugality .
The person who took the picture of Locke, the first Chinese-American ambassador to China and a former governor of Washington state, said Locke tried to use a coupon but was was rejected. Among the thousands of comments on the social media network Sina Weibo were ones like this. "This is something unbelievable in China...Even for low-ranking officials, we don't do things for ourselves. Someone goes to buy the coffee for them. Someone carries their bags for them."
At the World Economic Forum in Dalian in September 2011, well-known China Central Television anchor Rui Chenggang surprised the audience by asking Mr. Locke: "I hear you flew here coach — is that a reminder that U.S. owes China money?" Mr. Locke replied that economy class is standard practice for all diplomatic staff of U.S. embassies and consulates, as well as for members of the president’s cabinet. [Source: Rose Yu and Josh Chin, Wall Street Journal, China Realtime Report, September 20, 2011]
The Wall Street Journal reported in challenging Mr. Locke, however, Mr. Rui’s aggressiveness appears to have backfired. "I wish my idol Rui Chenggang would ask Chinese officials: 'You fly first class — is that a reminder that you owe plenty of money to the Chinese public?'" journalist and author Li Chengpeng quipped on his blog shortly after news of the question hit the Internet.
In September 2011, around the time Locke was in the spotlight, the muckraking Chinese business magazine Caixin Century Magazine reported that local officials in Zigui, one of Hubei’s poorest counties, spent more than 800,000 yuan ($125,000) — including more than 130,000 for wine and cigarettes, while entertaining a group of nine officials from the provincial government. The amount was 229 times the average annual income of a local farmer, Caixin said. Xinhua News Agency on Saturday quoted a Hubei government spokesman as saying that the actual cost of the Zigui reception was only 114,451 yuan but that the local government had submitted a reimbursement request for a much larger amount.
The Wall Street Journal reported, the coincidence was not lost on Weibo user Libu Sansi: "On the one hand, you have the talented young Rui Chenggang making fun of U.S. ambassador Gary Locke traveling in economy class and party media warning of Gary Locke’s neo-colonialism; one the other you have the Hubei provincial government going on an inspection trip to a poverty-stricken county, spending more than 800,000 yuan in 20 days, Neo-colonialism? I don’t mind."
Image Sources: 1) AP; 2) Liu Bolin, China’s Invisible Man artist, Global Times Chinese: photo.huanqiu.com http://photo.huanqiu.com/creativity/unlimited/2010-11/1254288.html ; Asia Obscura http://asiaobscura.com/ ;
Text Sources: New York Times, Washington Post, Los Angeles Times, National Geographic Smithsonian magazine, The Guardian Times of London, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.
Last updated April 2012