China: New leaders, old problems

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A year ago, everybody predicted the Chinese succession, now slotted for mid-November, to be a technocratic smooth transfer of power. Instead there have been constant bumps on the road. It started in March with the ousting of one of the Red Crown princes, Bo Xilai and the subsequent trials against his police chief, Wang Lijun and his wife that was sentenced to death for the murder of British businessman Neill Heywood.

The Bo Xilai-case brought corruption at the highest level into broad daylight. The massive wealth accumulated that made it possible for his son Guagua to attend a string of expensive schools and universities was just one outward sign. Others were hidden fortunes invested in real estate where Heywood was a fixer in getting things cleared in the UK.

Earlier, many commentators believed, including myself, that corruption was mostly carried out by ‘rotten apples in the provinces’ but Bo Xilai has shown that crime and corruption go to the very top, as I said to the Financial Times in August.

Now, the current premier Wen Jiabao and his family are targeted by the NYT. An article claims that his family has accumulated large amounts of hidden riches. The Prime Minister’s 90th year old mother is accused of undertaking large stock transactions. All together, the family may be worth 2.7 billion USD. As one could expect, the NYT website is now blocked in China, but a more unprecedented step is that Wen Jiabao has in fact made a statement through his lawyers to refute the claims.

In July, Bloomberg ran a similar story about the relatives of Xi Jinpeng (who is expected to become the new president) that claims that they have accumulated large personal fortunes. Xi never commented and Bloomberg was blocked. And it was the same Xi Jinping that went on the record stating that ‘If you go into politics, it mustn’t be for money.’ On a side note, this quotation is from a lengthy and relatively unknown interview with Xi Jinping which dates back to 2000 and has just been translated by a great Danish sinologist. If you are interested in Xi Jinping’s thinking about politics, this is a must read!

These cases, if true, don’t necessarily prove that top leaders themselves are corrupt but that in the best case that their families trade without impunity on the family name. And controlling family members is a difficult job. The wealth of the 70 richest members of China’s parliament, the NPC, rose to 89.9 billion USD in 2011, according to Hurun Report, making the Chinese Communists bigger plutocrats than their American counterparts on Capitol Hill. 

The average Chinese, Mr. Li, gets annoyed by those stories. The narrative used to be that the rotten apples were at a low level and the top level was the guarantee for cleaning up. That however is put into question recently; corruption can’t be swept under the carpet any longer.

Paradoxically, leaders such as Wen Jiabao have acknowledged the corroding effect of corruption and seek to clamp down on it. Nevertheless, the tools of sanction still remain within the Communist Party which makes it difficult to create ‘checks without balances’. If corruption is indeed is running from bottom to top, it might be difficult to address in the current system - and China might need more than to change leaders in November.

Follow Jonas Parello-Plesner on twitter @jonasPplesner

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