On the Gift of the Graft: Corruption in China…

This is a paste from an article I wrote for the eChinacities website about my experiences with corruption in China. I’ve been promising to write it here on the blog for about six months, but I’ve been hesitant to in case I drew any “unwanted attention.” Then I got a chance to make some money for writing about it. So I did. And damn the torpedoes: I only have about six weeks left, I speak nothing but the truth and this is by no means an isolated incident. China, get your act together.

Gift of the Graft: Corruption in China

May 31, 2012

There is so much irony in this photo. This was on the wall of the room in which I was made to wait while the consultant went off to “pay” the police officer.

“You are in China. You come to China as foreigner it is your responsibility to know all the laws of China and obey them. You get no special treatment. You go now.” Thus speaks the officious little turtleneck as he chucks my passport back onto the table, denies my visa application and storms out. My consultant yelps and scurries after him, but to no avail. Later, traipsing out of the police station, we learn that the particular “law of China” I have violated is one stating I must re-register at my local station every single time I re-enter the country. I have registered twice before (I live on the HK border and flit back and forth regularly) and have been assured – both by the local officers fed up of seeing me and my new company’s usually helpful consultancy firm – that so long as I am registered it will be fine, but not so here. This time it matters, and for whatever infuriatingly inexplicable reason I am now a long way up the proverbial creek with the CCP having just impounded my paddle.

My consultant is stumped, as am I. Sitting on the steps outside, I feel an overwhelming urge to do or say something regrettable in the direct line-of-sight of all the blue uniforms, but then I begin noticing that every single person strolling by is laden with stuffed gift bags. I also spy lots of red envelopes. It is the week before Spring Festival and I assume everyone has been shopping, but as a sudden cloud of comprehension passes over my consultant’s face, I realise that something else is going on. We depart, return the next day, wait patiently while my consultant disappears into the visa officer’s room and rise as one when he miraculously emerges fifteen minutes later. In his fist is a form marked with that holiest seal of Chinese officialdom: a red stamp. I’m in!

Gifting or grafting?

So what happened? It is a familiar story for many an expat. Turns out everyone walking into the police station had not been shopping, but – at this most ostentatious time of year – had been bringing in the requisite ‘presents of good will.’ Turns out we were the only people (dumb foreigners) in the whole police station without anything to offer. Turns out that with only five days before the holiday, the officers really couldn’t be taking any new cases into their brimming workloads and didn’t appreciate our ‘ingratitude.’ Turns out my consultant needed to be a little more generous. I ask him what present he brought to expedite things, expecting perhaps a bottle of wine or some fancy maotai, but he informs me nothing less than 1,500 RMB in a red envelope folded inside my application would have done it. I choke on my C’est Bon and the consultant laughs at my typically foreign squeamishness. He tells me this sort of thing happens all the time and apologises for the delay, saying he really should have thought of this beforehand. The unwritten rules (潜规则 – qián guīzé) of China are every bit as important as the written ones.

Now, corruption happens everywhere, I’d be remiss if I didn’t address that, but China makes the rest of us look like rank amateurs. There is even a three-pronged measurement system. The anecdote above is a perfect example of ‘graft,’ the most common of the three types of corruption rampant in the PRC: hong-baos (or lucky money) are common presents around Chinese New Year, and many a foreign teacher can attest to a welcome gift or two being passed their way. This is usually harmless, but it can have a dark underbelly. In many instances it is fine, but the second these gifts start to be ‘expected’ then things go awry. At this particular police station, so many people were bringing gifts that it became the norm, and those who didn’t were viewed dimly by the officers who had obviously decided that they were owed something in the first place. Cheeky scamps. It is not uncommon: not a day goes by without a story in some regional paper or other of people in public office getting sent down for offences related to graft. It is as much a part of modern China as rampant development, KTV bars and smog, and just as hard to avoid.

Rent-seeking and prebendalism

Gift of the Graft: Corruption in China

The second most common type of corruption is ‘rent-seeking’, which refers to all forms of corrupt behaviour by people with monopolistic power. Public officials, through granting a license or monopoly to their clients, get “rents” – additional earnings as a result of a restricted market – and therefore make a bit extra on the side. Anyone who has ever tried to set up a business in China will be painfully familiar with these sorts of extortionists. Coming in for regular criticism are the fire department and health and safety brigades, who need to grant you a license before your new business can operate. Surprise, surprise, lots of problems begin arising when you try to get one. That is, until a healthily fat envelope is delivered surreptitiously to the man at the top (here, graft bleeds into rent-seeking: as you can see, the categories themselves are as open and permeable as the wallets of those in charge).

Prebendalism, the third form of corruption, generally refers to those in public office who get (and abuse) perks and privileges through that office they take advantage of. This happens the world over – think the MP’s expenses scandal in the UK – but against the background hive of corrupt activity going on in China, it is yet another thing to get riled up about. It is worth noting however, that in the context of guanxi-based societal hierarchies, there may not be a monetary incentive. Prebendalism can be nepotistic rather than financial (favours for people within your guanxi circle rather than self-interest), which is something rather unique to China.

Reasons for Chinese Corruption

As with everything in China, there are many explanations and excuses. Some scholars maintain that corruption in China results from the Party’s inability to maintain a disciplined and effective administrative corps because they – in effect – have to police themselves. The CCP is so involved in every stage of the process that they have to set, obey, and uphold their own rules at the same time, which, according to Lü Xiaobo, Assistant Professor of Political Science at Barnard College, is just “asking for trouble.” His approach is called ‘New Institutionalism,’ and it argues the government has failed to build enough incentive (salary hikes, non-vested pensions) and restraint (tighter supervision, actual punishment) mechanisms into the system to prevent underpaid employees from feeling like they deserve a bit extra. What is truly amazing is that the CCP openly acknowledges that this is the case. A government not known for owning up to its short-comings is fairly clear-cut about this: enough wasn’t done before, and now it’s a huge problem.

Countermeasures and responses

There are plenty of commissions set up to counter corruption, but they usually take a trophy or two before things return to normal. There is even a phrase for it: 杀一儆百 (shā yī jǐngbǎi). The Central Committee for Discipline Inspection and the Central Organization Department are both tasked with tackling corruption, but they are ineffective. Statistics from investigators Minxin Pei and Daniel Kaufmann show that the odds for a corrupt Chinese official to end up in prison are less than three percent, essentially making corruption a high-return, low-risk activity. They state in no uncertain terms that it is the leniency of punishment that has been the main reason corruption is such a serious problem in China.

Local officials may be targeted in the media, but senior CCP members are all but impervious. The CCDI and the COD also operate in secrecy, meaning that no one can see who is disciplined and how, leading to rather intense scepticism in the public. The one recent ray of light has been in the fallout from the recent Bo Xilai scandal in Chongqing. He is the most senior official in the CCP’s history to be brought low in the media, and there is now a palpable sense of sights being fixed much higher up the food chain. Bo Xilai may not have been formally charged with corruption, but the internet is rife with rumours and for the first time in living memory the Chinese population is beginning a real, open debate about it. The CCP in recent years has shown hesitant, yet positive progress towards the idea of reform, and perhaps now in the current climate the problem of corruption can finally be tackled. Until the comprehensive reforms needed are undertaken China will continue to be plagued by corruption, but at least now people are finally starting to talk about it on a national level.