Corruption runs deep in Chinese system

China has thrown a challenge to become the next global superpower but is still embroiled in large-scale bribery, cutting across bureaucracy, polity, and civil and private sectors. The communist government’s complete control over resources and financing, and the influence exerted by local officials are major factors for the unabating corruption in the country.

A deputy governor of China’s central bank was blamed for receiving a huge amount of bribery. This top official named Fan Yifei was accused of receiving SGD 72.5 million as he violated rules to implement power-for-money transactions. “I wanted to possess great power, and at the same time, to be rich,” he confessed later.[2] Fan was a member of the China Communist Party (CCP), which rules the country. Even China’s military officials, including the defence minister, were found engaged in corruption activities.

Over five million members of the CCP have been subjected to investigations over the allegations of corruption.  And 110,000 of them were found guilty of indiscipline as many of them were found to have taken bribes in the form of money and gifts. A few months ago, Sun Zhigang, a top CCP functionary, who was also a provincial committee secretary, was found guilty in a bribery case.

Corruption has been prevalent in China since the dynasty time, and in modern times it grew significantly, especially, after the 1990s reforms.

Corruption is deep-rooted in the Chinese bureaucracy and governance as the “grey income” amounts to 83 percent of officials’ formal salary, said Yongheng Deng, urban land economist and Shang-Jin Wei a former chief economist at the Asian Development Bank.

“Notably, this figure increases sharply with rank. For example, the unofficial earnings of low-level civil servants are just 27 percent of their official income. By contrast, for governmental division chiefs, the ratio skyrockets to 172 percent. Strikingly, the off-the-books income of a director general in a government department (the equivalent of mayor) represents a whopping 424 percent of official compensation,” they wrote.

Former Chinese national football team coach Li Tie had to pay bribes to be appointed to the post. Tie apologised for his conduct even as he pointed out that it was a part of the system. “There were certain things that at the time were common practices in football,” he said.  A few weeks later, the former chief of China’s national football association, Chen Xuyuan, pleaded guilty in a bribery case.

Multinational companies that seek to do business in China are forced to pay bribes in different forms. The ruling elites in China asked JPMorgan to hire their children so it could get business from the country’s key decision-makers. Those elite children did not have merit and were unqualified for the positions they were hired to, found the US Security and Enforcement Commission.

China’s healthcare is known for fraud and embezzlement as owners of at least 176 hospitals were arrested in 2023. Doctors and hospitals charged more than they can while they preferred expensive dinners and gifts as bribery said Mike Wu, a surgical stapler maker from Shanghai. Jeroen Groenewegen-Lau, an expert at the Berlin-based Mercator Institute for China Studies, said hospitals in China earned kickbacks by purchasing expensive equipment and overprescribing drug treatments.

Chinese President Xi Jinping vowed to root out corruption in China when he came to power a decade ago. However, it rather has seen an increase, especially, among the CCP members. The number of registered corruption cases increased from 173,186 in 2013 to 626,000 in 2023 since Xi’s campaign rather aimed at finishing opponents.  “The current anti-corruption campaign is partly a purge and partly a real effort at controlling corruption,” said Singaporean professor and author Yuen Yuen Ang. The effect of corruption arising from the authoritarian system in China is deep, she added.

Anti-corruption investigations are selective in China, at least at the elite level, said Hanming Fang, an applied microeconomist at the University of Pennsylvania. Xi’s anti-corruption campaign is also not the first in China; in fact, anti-corruption campaigns have been a recurring theme throughout China’s history,” he said. “The Chinese politico-economic system, where different levels of governments cast large shadows on the market, is fertile ground for officials to misuse their public power for private gains.”








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