China’s chance to reform

China’s chance to reform

As China’s new leaders emerge from behind the closed doors of their Third Plenum, the outlines of President Xi Jinping’s reform agenda for the coming decade are beginning to emerge.  Combatting corruption is only mentioned once in the final communiqué but there are suggested reforms that could help bring more transparency to government in China. This is to be welcomed. However, the lack of a specific anti-corruption agenda is a significant missed opportunity for the country’s leadership to declare boldly what Xi Jingping has said for the past year: China will not succeed if it cannot stamp out corruption.

Transparency International has identified areas in the Third Plenum report that could lead to meaningful anti-corruption reforms if implemented, and others where little or no action has been taken.

Asset declarations

The government plans to introduce a pilot asset declaration project. This should be done immediately. If government officials declared their assets and people had access to this information it would be easier to see if the salaries they earned were commensurate with their declared wealth. If it appeared that they were living beyond their means, it would alert the authorities to possible corruption.

Assets declarations are of growing importance to a population weary of officials siphoning off public assets. The "Brother Watch" scandal, for example, that went viral on Chinese social media exposed the corruption of a senior party official simply by showing his propensity for luxury wrist wear.

Greater institutional independence

The government is calling for a more vertical decision-making structure in the judiciary and the Party’s discipline and inspection system, though it is unclear how this will work in practice. The intention appears to address the issue of party officials on the same bureaucratic level of those accused exerting undue influence over decisions regarding their peers. People on the bottom rungs of the system, however, have no way of voicing complaints about their superiors. This lack of bottom-up accountability means that people have nothing to fear from those who work under them and is an impediment to whistleblowing in cases of corruption.

Budget transparency and taxation reform

The government’s reforms will bring taxation and budgets under the scrutiny of the congress. Making budgets more transparent, increasing transparency around transfer payments from the centre to the regions, setting up risk-warning and debt-management systems for central and local governments and speeding up legislation on a property tax: all these steps put forward in the communiqué would help reduce corruption. 

Provincial officials have, up until recently, been able to exploit a lack of transparency in local budgets, particularly in the land approval and construction sector, to embezzle public funds. The now infamous ghost cities and empty buildings of the Chinese construction boom are a visible result of the misuse of public funds and planning permits.

Corporate and state-owned enterprises

The reform plan proposes putting greater distance between the government and state owned enterprises, allowing for a greater role for the market. This is welcome but does not go far enough. There is a need for greater transparency on the internal reporting of state-owned enterprises, as well as greater budgetary and financial transparency on all businesses.

In 2011 China amended its penal code to make bribery of a foreign official a crime. But well-publicised scandals involving Western multinationals continue to highlight the corrupt practices of businesses operating in the country, including allegedly bribing locals and exploiting connections with the families of prominent officials.

A recent report by Transparency International shows that among the BRICS countries Chinese companies lag well behind others from Brazil, Russia and India in corporate transparency. They report little on their anti-corruption programmes and have limited information of their operational structure or on their country-by-country reporting of revenues.

Space for civil society

Civil society plays an important role in holding governments to account and limiting corruption. Despite calls to counter graft and hopes for a fresh approach under President Xi, the Chinese government has embarked on a crackdown of civil society activists. A week ahead of the plenary meeting, anti-corruption campaigners were put on trial after urging officials to declare their assets. 

Corruption is an issue that affects and enrages the Chinese people. Space for civil society to operate is essential for the public to be able to hold corrupt officials to account and to have a genuine independent voice against graft. The government should channel the passion of the people, rather than try to smother it.

Media

A free press plays a significant role in rooting out corruption in any society. In China, however, the media has a mixed reputation, with a growing tendency towards self-censorship. In addition, there have been several corruption allegations against journalists for taking cash payments from companies to publish stories that smear rivals.

A spate of arrests of journalists combined with the blocking of foreign-owned media outlets, such as Reuters’ Chinese service, points toward a growing culture of media censorship in the country. Commitments to tighten the state’s grasp on the internet are also of concern.

The winner of the Transparency International 2013 Integrity Awards, Chinese journalist Luo Changping, who exposed official corruption on his personal blog, spoke about the need for reform: “I believe transparency is crucial for China, as is stopping the monopoly of information. We need to be able to see everything the government does and every deal under the sun. This is the kind of transparency we are looking for.”

Whistleblower protection

Transparency International recently called for the “universal protection of all whistleblowers who truthfully reveal abuses of state power from any retaliation.”

The official communiqué from the Third Plenum made no mention of whistleblower protection. The current lack of such protection has made it dangerous for people in China to be outspoken about corruption. A spate of attacks aimed at those exposing corrupt practices has made headlines over the past year. In Guangdong in July a 47 year-old whistleblower who uncovered official corruption was attacked with sulphuric acid, stabbed and beaten in reprisal for his actions.

The protection of whistleblowers from such threats and retaliation would promote and ease the efficient exposure of corruption, while enhancing openness and accountability.

In the weeks to come, the ruling party must start to act on its reform initiative. A recent analysis by Reuters found that there were no more corruption investigations in 2013 than the year before. Only the introduction of concrete actions and measures will determine the legitimacy of the regime’s claim to combat corruption. In the view of Transparency International, securing a safe space for civil society to hold government to account should be at the top of the agenda.

For any press enquiries please contact press@transparency.org

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