China’s Anticorruption Crusade Is Reaching a Turning Point

Xi Jinping is 18 month into his presidency and almost as long into his anticorruption crusade in China. As the Wall Street Journal noted as early as May 2013, anticorruption purges are hardly new in China, but President Xi seems to be pursuing his anticorruption drive with unprecedented vigour and commitment. Zhou Yongkang, the newest and arguably most prominent casualty of the purge, is evidence that this time is different. Shannon Tiezzi recently made the same underlying point in a piece in the Diplomat. Ms. Tiezzi takes issue with the oft-repeated claim that President Xi is only using anticorruption to weaken political rivals and promote his allies; she points out that while President Xi is indeed using the purge to his advantage, political infighting couldn’t be his sole motivation, since if it were “he would likely be winding down the campaign now.”

I don’t disagree with Ms. Tiezzi’s point. President Xi’s anticorruption drive–the centerpiece of his tenure so far–has undoubtedly gone further than others before him. More than 182,000 party members, including 17 high-ranking officials, have been punished for corruption since the beginning of his presidency. Yet despite this progress, recent signals suggest that his campaign might be significantly curtailed in the near future.

First, the astronomical economic cost of President Xi’s anticorruption campaign is starting to become clear. A recent Bank of America Merrill Lynch report estimated that the anticorruption drive could potentially cost the Chinese economy more than $100 billion in 2014 alone, due to a combination of precipitous decreases in conspicuous consumption and “abnormally high growth of bank deposits of governments and quasi-government agencies.” Some speculate that even clean government officials are shelving new projects, for fear of seeming corrupt. The magnitude of the economic costs of the anticorruption campaign should be quite a shock to the growth-sensitive Chinese leadership. And even if President Xi’s anticorruption campaign is not the real cause of a slowdown in economic growth, it will always be an easy scapegoat for the critics in and outside the Party.

Second, independent of the economic cost, evidences shows that President Xi’s anticorruption campaign may be triggering a significant pushback from other senior members of the Party. Jiang Zemin, a former Chinese president, allegedly sent a message to President Xi not to rock the boat too much when it comes to the patronage networks at the center of the Chinese Communist Party. Hu Jintao, the president before Xi Jinping, apparently also expressed unease at the zealousness of the campaign. This pushback is hardly surprising, given how threatening President Xi’s dogged pursuit of high-profile officials must seem; after all, as Matthew has also noted, there are few, if any, senior officials with completely clean hands. Furthermore, Mr. Zhou’s purge suggests neither a connection to powerful Party figures nor “retirement” will get a once-corrupt official off the hook. To make matters worse, some have speculated that a recent spate of suicides by Chinese officials might be linked to the anticorruption campaign. Of course, government officials can commit suicide for any number of reasons, but nothing attracts public and media attention like death, and these incidents may well damage President Xi’s position within the Party.

These troubling signs suggest that despite a strong start, President Xi’s anticorruption campaign may be reaching its peak, and will probably wind down over the next year.

But even if that’s the most likely scenario, perhaps the more interesting question is what will happen if President Xi defies these pressures to slowdown and pushes on. This is not unthinkable: Despite the economic costs and political pushback, President Xi may nonetheless press on with the campaign–and not only (or even primarily) because he can target political rivals like Mr. Zhou. For all of his institutional power, President Xi has a narrower patronage base than leaders that came before him. The anticorruption campaign is the centerpiece of his presidency and adds considerable weight to his “man-of-the-people” image. After all, going after high profile senior officials not only pacifies public outrage towards ostentatious second-generation “princelings,” it also distances President Xi, the son of a prominent revolutionary, from being identified in that same category.

Yet Mr. Jiang and Mr. Hu are not easy to ignore. To invoke an oft quoted adage of Chen Yun, the former Party elder: “Fight corruption too little and destroy the country; fight it too much and destroy the Party.” President Xi may want genuine reform, but is he willing to leave his Party in its wake?

4 thoughts on “China’s Anticorruption Crusade Is Reaching a Turning Point

  1. Great article, Meng. The debate has some parallels to Rauch’s US-based argument that political graft has uses (keeping party members in line). Your highlighting of the economic costs from the chilling effect (of prosecutions) adds further nuance: while it’s definitely a short-term cost, I’d wonder if Pres. Xi continues his campaign (and the anti-corruption laws are sufficiently clear, maybe a heroic assumption), other politicians wouldn’t begin to feel comfortable w/ what’s allowed/not, and the public works projects will start again. Then again, if many of the “chilled” projects are the product of rent-seeking, maybe their demise is not imposing an economic cost at all.

  2. A much clearer indication of the question posed in Meng’s post will come when we see whether or not former Vice President Zeng Qinghong is ensnared as the next target in the current anti-corruption campaign. For weeks, rumors of this possibility have been circulating. By targeting Zhou, President Xi has clearly indicated that the unspoken boundaries of not targeting former Politburo Standing Committee members no longer applies (thereby exposing Zeng and others). Nevertheless, as several commentators have noted, it is not yet clear whether the high-level “tigers” being targeted are simply Xi’s political opponents or will expand beyond the Zhou/Bo clique. The question of how Xi will deal with Zeng, if at all, therefore presents an interesting test. While Zeng has ties to Zhou, he also has much stronger past ties to former Presidents Jiang and Hu than anyone targeted to date. If Xi targets Zeng next publicly, then this will be a sign that the campaign still has a ways to go. On the other hand, if he does not, then this will be a sign that the reported unease of Jiang and Hu is having an impact at tempering the campaign at the highest levels. Either way, though, I think Xi realizes the threat that endemic corruption poses to the Party’s legitimacy and will continue to attack it harder than his predecessors during his term. But the question of just how far he will go, and what impact that will have on Chinese politics, still remains to be seen.

  3. Valuable post.
    Xi is made of strong stuff but how strong will become clear if he abandons the policy of anticorruption.
    The economic cost of an anticorruption drive as a reason to curtail the anticorruption drive is a bizarre statement. It is like saying the cement in New York is expensive but we should still keep paying the Mafia because the buildings are going up. The money will still be in the economy and better spent with the vital point that the masses will more tolerate the party and less likely to revolt and hang these corrupt party members from the lamp posts of Bejing.
    Hence the dilemma of Cheng Yun’s statement can only be resolved by the destruction of corruption within the party. It will mean in the longer term a new politic in China. But in the short term it will mean the survival of the party.

  4. Meng — thanks for this post; I really enjoyed it! I think you’re probably right to mark this as the “make or break” point that will define President Xi’s anticorruption legacy. But I think I take a much more pessimistic position than you regarding the entire effort. I still have trouble accepting that President Xi’s anticorruption campaign is more than just a basic change in degree from prior administrations; I believe China’s senior leadership is only willing to fight corruption on its terms, to the extent consistent with the narrow political interests of the current regime and the long-term stability interests of the party-based political hierarchy. I see proof of this in China’s puzzling crackdown on due diligence firms over the past few years — China’s government will tolerate anticorruption efforts, but only if they don’t involve looking under the wrong (politically sensitive) rocks. And I think that is precisely the motivation behind the former presidents’ intervention where they are asking President Xi not to rock the boat too much. Maybe President Xi will prove me wrong — I hope he does — but I until he does so, you can find me firmly planted in the “this is just politics masquerading as anticorruption enforcement” camp.

    But I found your post thought-provoking; so much so that I’ve drafted a (sort of) response that I’ll hopefully be posting in the near future!

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