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China: new leaders, new opportunities to tackle corruption

Within 100 days of Xi Jinping and Li Keqiang coming to power in China last November, 27 high ranking officials were disciplined as a new anti-corruption effort began. Xi and Li’s new policies won wide support from the people and gave rise to a feeling across the country that corruption would be battled more forcefully.

Xi Jinping vowed to “restrain power within the cage of institutions” and “deliver actual impact and substantial changes”, highlighting the importance of institution building in the fight against corruption.

As the People’s Congress sits for the first time this week in Beijing, Xi and Li face a series of serious challenges. These include: the conflict between the government officials and the people; the exhaustion of the government’s credibility; rampant corruption; a fragile social order; questions about the partiality of law enforcement and the deterioration of the environment.

Deterring domestic bribery

Picture of renminbi

The renewed fight against corruption should start with halting the bribery of government and public officials. From paying bribes to gain a competitive edge in education to luxurious gift-giving to officials, China faces many hurdles to alter this practice. From 2007 to 2012, more than 15,000 civil servants were allegedly involved in 13,000 of the 81,000 commercial bribery cases investigated by authorities – and totalling approximately 22.2 billion yuan (US$3.6 billion).

In China, only bribes that are greater than 10,000 yuan (US$1,590) are illegal. Paying an official or civil servant anything below that figure is not a punishable offence.

China has ratified the UN Convention against Corruption (UNCAC), however the country’s penal code is not yet in line with this international initiative. Amendments aligned with the UNCAC are therefore needed to curb domestic bribery. Regulation and punitive measures are especially necessary to make new laws effective.

Budget transparency and asset declarations

Maserati shop in Beijing

A 2012 report indicated China had made progress in improved disclosure in government spending – but critics remind us that overall performance is still inadequate. For example, it was revealed that government officials had purchased Bentleys and Maseratis ranging in price from US$330,000 to US$560,000 each to be used as government cars. The bad publicity and public outrage over the extravagant government spending led to the government putting an estimated US$28,200 cap on vehicle purchases by public servants.

But more is needed. The problem of government officials using public funds for private purchases remains. To deter these practices asset declaration laws for public officials and institutions need to be fully enforced. Political parties, party officials and both central and provincial governments need to enhance fiscal transparency. The creation of an independent watchdog could monitor irregularities in budget spending. Furthermore, access to information legislation is needed so that citizens can play their part in holding all government players to account.

Restructuring government functions, introducing budget transparency and strengthening budget monitoring by the People’s Congress are the most necessary and urgent steps that need to be taken. Without them it will not be possible to stop the banqueting, the private use of the public institution cars and political tourism at the government’s expense. Without budget transparency the government will not be accountable to the people. Everyone agrees that the government’s finance is a big black box. Nobody knows each year how much the government collects in tax revenue and how that money is spent.

Former leader Hu Jintao enacted much legislation to curb corruption – but more enforcement of the law, as well as further anti-corruption reform, are now needed to ensure China’s corruption efforts do not become stagnant.

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