Fighting corruption in China

Fighting corruption in China

Fighting corruption is high on the agenda of China’s new leaders. When Xi Jinping and Li Keqiang take over as party leaders they will have to deal with the political legacy of poor governance at the national and local levels, unequal social welfare distribution, growing civil disobedience, and expanding social polarisation.

China's Communist Party Congress image

This has led to a series of scandals, from the fall of Bo Xilai and the convictions of senior officials to the sacking of Liu Zhijun, the former railway minister. Although there is a public commitment by the government to tackle corruption, which has seen the introduction of new legislation to penalise overseas bribery, so far little visible progress has been made at home.

To bring about serious reforms, China’s government needs to allocate sufficient resources to prioritising long term economic and institutional reforms. At Transparency International we stress the importance of a strong national integrity system where the key pillars of state – including the judiciary, the police, the executive and the legislature – are transparent and accountable. For the new Chinese leaders to succeed in their anti-corruption efforts the first priority should be to understand why and how corruption permeates the pillars of state.

China by the numbers

In the 2010/11 Global Corruption Barometer, the latest survey of public opinion on corruption, more than one third of Chinese people said they thought the government was ineffective in the fight against corruption and 46 per cent said corruption had increased in the previous 12 month period.

Business was considered the most corrupt sector, followed by the police, political parties and parliament. This was corroborated by the 2011 Bribe Payers Index, which surveys businesses on which country is most likely to bribe abroad. Out of 28 of the world’s largest exporting nations, China came second to last, just ahead of Russia.

China, Global Corruption Barometer 2010/2011 data graphic

Areas for reform

Here are four key areas where reforms will help China’s anti-corruption efforts.

Taxation

The conflict between the central and the local governments in the distribution of tax revenues is a root cause of a variety of different types of corruption. In the past 20 years the central government’s share of tax revenue has more than doubled to 55 per cent, leaving local administrations short of funds. To make up for the shortfall, local officials have resorted to income generation schemes that have been tainted with corruption – in particular, the wholesale sell-off of land, which in theory belongs to the Chinese people. The vast majority of corruption cases in China are related to land sales.

Public institutions

In China, public institutions, including schools, universities and hospitals pay public servants poorly. This creates incentives for those in key positions of power to solicit bribes for services. In the 2010/11 Global Corruption Barometer, close to one in ten people surveyed in China reported that they had paid a bribe for a public service in the previous 12 months.

Access to information and asset declarations

China’s government decree on access to information in theory opens a space for people to ask the government for information. In practice, the government routinely denies requests for important information. There needs to be effective enforcement of this right to information. In addition, the government must enforce mandatory asset declarations for both government and party officials both as a deterrent to corruption and as a way for citizens to hold their government and party officials to account. This is a prerequisite for fighting corruption that as yet is missing in China.

Civil society organisations

It is estimated that there are more than 3 million non-governmental organisations (NGOs) in China today, of which only 470,000 are legally registered. The prevailing tendency is to fear NGOs as potential anti-government forces. Civil unrest in China, however, is not a result of NGOs but of the painful transition from an agrarian society into an urban society that has left millions poor while they see party officials prosper. NGOs can play important roles as initiators and implementers of social reforms, including anti-corruption reforms.

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