China cracks down on rank corruption

He's a typical low-ranking, modestly paid government official, but he pockets an extra $200 every so often - a kickback for being part of a smuggling ring that sends unemployed Chinese to neighboring South Korea.

"Chinese need jobs. South Korea needs workers," says the official, who requested anonymity. "It's a win-win situation."

Echoing a common sentiment, the immigration official typifies the attitude of many here toward corruption, a fixture of daily life. But with a string of high-profile crackdowns that is reaching ever higher into the echelons of power, China is now attempting to rein in illegal practices that are seen as a threat to the government and a barrier to economic progress.

Chinese economists estimate that in the 20 years since China started experimenting with capitalism, government officials have siphoned off $3.6 trillion in government funds and state assets. On Tuesday, Cheng Kejie, a deputy chairman of the national legislature, was expelled from the Communist Party and fired for accepting more than $4 million in bribes. In the past month, two other southern officials have been executed for their malfeasance, a sentence Mr. Cheng faces if convicted. And in the southern coastal city of Xiamen, hundreds of people have been implicated in a scandal that first surfaced last fall and is still being investigated.

While China's leadership is worried that the scandals are weakening its hold on power, Premier Zhu Rongji has also acknowledged the rising popular anger at the government's failure to stop the epidemic. "Bureaucracy, formalism, falsification, and exaggeration are rampant," Mr. Zhu said during a speech last month before the legislature, the National People's Congress. "Certain types of corruption and undesirable practices have not been brought under control."

China's leaders have reason to fear corruption. It helped topple the Ming dynasty in the 1600s and led to the abdication of the last emperor in 1912. Students in the 1989 pro-democracy protests also decried corruption.

But in many cases the graft is the result of a legal and regulatory system that encourages officials to exploit their positions, says economist He Qinglian, whose book "The Pitfalls of Modernization," was a bestseller. It says government officials have gotten rich by selling off state assets or placing relatives at the head of privatized, formerly state-owned businesses.

China's tight import and export controls have spawned enormous smuggling operations, many of which are protected by the Army or customs officials. Nearly all semiconductors in China are illegally imported to evade high tariffs, according to one US official. Cigarettes and fuel oil are also smuggled in large quantities to bypass high import duties. Chinese companies bribe officials to secure export licenses.

Yet some observers say that while corruption has moral and social costs, some of the activity may actually be helping the economy to grow under the constraints of lingering Communist controls. "Low levels of corruption can grease the wheels of business," says a Western diplomat. "The distortions in the system create opportunities for corruption."

For example, the immigration official sees himself as helping to evade cumbersome regulations that it make it difficult for Chinese to acquire passports. His is a victimless crime, he says.

"From the economist's point of view, this is more like a social and moral problem - not economic," says Hai Wen, an economist at Beijing University and a promoter of economic reform. The way to end such corruption is to reform the system, making it easier for businesses to thrive, he says. "Why do people need to pay a bribe? Because they need a resource and are willing to pay a certain price."

"In some people's view, because there is total control of resource allocation by the government, you have to pay a high price," Mr. Hai adds. "Those who are willing to pay high prices are those who need it," and that does not necessarily decrease an economy's efficiency.

Nonetheless, China's thinkers are focusing on how to keep corruption from spiraling out of control. The government has called for greater supervision over officials and an increased watchdog role for the state-controlled news media.

During a tour of Shenzhen, the economic hothouse city just north of Hong Kong, the Politburo member in charge of battling corruption called for regulatory changes to close loopholes exploited by corrupt officials. The problem of selling of land-use rights through back-door channels could be curbed through open bidding, Wei Jianxing said.

Other suggestions include raising officials' salaries. But that may not be enough, said an editorial in a progressive newspaper, Southern Weekend. "More important is to reduce official power over business so that officials will have fewer opportunities to sell their power," the paper said.

Aside from toughened law enforcement, the Communist Party has launched a campaign to re-instill Maoist principles in an effort to clean up its ranks. In the newspapers, on television, and on banners hung around the capital, old revolutionary heroes long consigned to the closet have been dusted off and held up as moral examples. A new television drama retells the story of a Russian model worker at a steel mill. Popular in the 1950s, the story still resonates with the older generation, but has little relevance to younger people. One newspaper responded by running a column on whether the steel-mill worker or Bill Gates is the better model for China.

A growing number of academics suggest that these measures fail to address the root causes of the problem. Several graduate students at the elite Beijing University planned to write theses explaining how the Communist Party needs to become more of a traditional political party and less an extra-governmental organ. But their proposals were shot down as too sensitive, said a Beijing University employee who knows the researchers.

(c) Copyright 2000. The Christian Science Publishing Society