But widespread corruption continues to undermine the effectiveness of any potential reform.
China’s domestic wealth has increased dramatically. But for some, the limits of transformative growth already seem to have been reached. Even conservative estimates suggest that the 54 million people currently unable to find work will remain in this position for at least another four years. China also runs on a risky financial system. Its banks are hiding piles of non-performing loans — piles built on the prediction that growth will continue to increase indefinitely. Income disparity, unbalanced growth and the need to reform the financial system were issues the IMF emphasised in their Chinese sustainability report. China also faces a grim battle against pollution. The price of rapid economic development is high; water, soil and air contamination puts the health of countless people at risk.
With the Twelfth Five-Year Plan, the Chinese government is setting out an ambitious proposal to put more money in the pockets of the poor and provide incentives to increase domestic consumption. It is also addressing economic restructuring, and tackling pollution by conserving energy and cleaning up the environment.
But corruption has the power to essentially nullify the government’s reform efforts. It is hindering development in remote areas and marginalising the poor. Often, money tagged for environmental programs disappears without making any noticeable impact. Corrupt officials are also obstructing individuals and groups reporting on pollution, and state-owned commercial banks are at the disposal of bureaucrats who exploit their position to benefit themselves. Above all, the biggest danger of corruption is that it undermines the very legitimacy of the government and key reformers.
One of Hu Jintao’s first addresses to party leaders in 2012 included an order to fight harder against corruption. The fight is crucial, but a poor record of success gives little reason for optimism. There are different views on why this battle is not being won. While some say it comes hand in hand with the benefits of an otherwise successful system, others say it is the legacy of extreme poverty during the Cultural Revolution. And others just believe it to be a part of Chinese culture. Be that as it may, the corrosive effects of corruption on government reforms, the economy and the reputation of the party are undeniable.
China’s previous efforts to curb corruption have focused on toughening related penalties, even resorting to capital punishment. But this approach has proved unsuccessful. Rather, transparency and public accountability are more effective in fighting corruption. And while China’s authoritarian leadership provided fast and comprehensive reforms, which turned the impoverished state into a superpower, accountability has little place within authoritarian regimes. This is why reform in China is so difficult.
China does not have to become a Western-style democracy; it should find a way to implement the idea of public accountability within its own system to allow for public scrutiny and expose corruption where it thrives. Channels that encourage credible and accurate reporting without fear of being labelled ‘anti-government’ have to be built. China will need to implement these reforms without forgoing the very characteristics that allowed for its economic development.
Failure to effectively curb corruption risks widespread public dismay with the country’s political leadership. Corruption is skimming away the resources allocated for China’s urgently needed reforms, and while it may not be the country’s biggest problem, it is seriously hindering efforts to tackle more-imminent ones. Consequently, success in curbing corruption is vital not only for China but also for the rest of an increasingly China-dependent world.
Michel May is a MEXT scholar and a Masters student in international relations and Asia-Pacific studies at the Graduate School of Asia-Pacific Studies, Waseda University.
Common sense seems to dictate that China’s reality is in contrast to May’s narratives. It is hard to imagine that a country widespread of corruption would be currently a country whose economy is as big or performing so well as is China’s. At the same time that I believe some cases could be true, I also believe it can happen every where as well e.g. Japanese politicians’ corruption scandals among the Liberal Democratic Party as well as the Japanese Democratic Party.
It has become common today to forget the fact that China has been providing assistance to solve the world financial crisis for both Europe and the United States. Only country with good financial system and transparency could become the richest country in the world.
For example, while we rarely admit as much, some people often take for granted that no one has the financial capability to rescue the European’s financial crisis whether the IMF, the ECB (European Central Bank), the EFSF (European Financial Stability Fund), or the U.S. Federal Reserve, etc. Only the Chinese Central Bank has that financial resources to contribute to this. And the Europeans are asking China to lend that helping hands – Chinese hard working manufacturing laborers and farmers are being asked to support the European’s social programs.
Similarly, as the United States has been taking on the hegemonic responsibility in maintaining its national interest in the intrinsic Middle East region. China has been provided financial stability for the United States in terms of acquiring the U.S. Treasury’s bonds. And this cash is available to the U.S. government spending during the wartime without public accountability. In other words, “a Western-style democracy” like the U.S. also practices non-public accountability in the realm of national security.
Although China may still have many characteristics of a country in transition, China is certainly a country with maturity and responsibility.