Corruption Q&A

Had a client ask me today about corruption in China. This happens roughly once a week, along with similar questions from clients about IP protection, Rule of Law in China, the direction of the economy, value of the RMB, etc.

The usual answer I give is that all the horror stories are true to some extent, but only in some parts of the country and also spread out over time. I remember back when the infamous McDonald’s hot coffee litigation was going on in the U.S. and everyone was asking me why the U.S. legal system was so terrible and why so much frivolous litigation was allowed in U.S. courts. I said the same thing back then: yes, some frivolous litigation goes on, but only in certain places and not all the time. Poor analogy, but it’s been a long day, and the 300 jiaozi I just ate (feels like it) are making me sleepy.

When I tell people that corruption is not everywhere in China, the next thing they usually ask is what the government is doing to solve the problems that still exist. Note that when a foreigner asks about "the government" in China, they mean Beijing, which they think is monolithic. So what is Beijing and the CCP doing about corruption? There are certainly always well publicized cases of government officials and business leaders jailed for corruption, that should tell us something.

Often the reaction to this is: "But that’s just a show trial, it doesn’t mean that the government is really doing anything to stop corruption." I beg to differ. First, part of the concept of a "show trial" is to let the public know that the government is doing something, that’s the whole point and is important. Second, one or two show trials might prove something if there was no follow-up, but this stuff is going on daily (see below). Third, some very important folks have been thrown in jail here, not just minor functionaries. Shanghai residents, you know what I’m talking about.

So what’s in the press today on the subject? Here’s a short list based only on a quick look at Shanghai Daily – certainly not an exhaustive survey of the news:

Again, this is just today in Shanghai Daily. Not a scientific or rigorous study, but I don’t think that one can seriously argue that these are show trials. Therefore someone somewhere in the government is trying to push this issue; can we agree on that?

The final question is always: is the anti-corruption campaign working? This is the hardest question to answer because all I have is anecdotal evidence. Moreover, I have only worked in Beijing and nowhere else in the country. Most people you talk to around here think that certain kinds of corruption have improved, such as inside the judiciary and other parts of the government. However, are small kickbacks still common in business dealings? Absolutely. Will this end anytime soon? Don’t hold your breath – this is going to take some time.


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