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China: The Year In Graft

A prominent Chinese scholar who heads an anti-corruption think tank has said the latest enforcement figures show that after a 20-year campaign, the government is losing the battle against graft.

Professor Ren Jianming, the vice director of the Anti-Corruption and Governance Research Center at Beijing’s Tsinghua University, told the Singapore Straits Times: “What it really shows is that all the measures might have slowed the spread of corruption, but not effectively stopped it. The reality is that corruption is deepening.”

More than 100,000 officials were punished for corruption in China last year, and 4.44 billion yuan ($650 million) was recovered, according to two anti-graft watchdogs at their annual press briefing last week.

The Ministry of Supervision and the ruling Chinese Communist Party’s (CCP) Central Commission for Discipline Inspection released yearly enforcement reports. They said the number of officials arrested and punished for graft involving more than 1 million yuan ($146,500) rose by 19 percent in the first 11 months of 2009 compared to the same period in 2008. At least 15 corrupt governor- and ministerial-level officials were punished, the most in 30 years.

The case is typically lurid: “It was that usual cocktail of sex and financial wrongdoing . . . .”

China has five anti-graft agencies, all linked to either the party or the state. Professor Ren said: “What’s most needed now is an independent body to investigate corruption.”

CCP leaders have said many times in recent years that corruption is the biggest threat to the party’s rule. The Straits Times said, “Public anger has sometimes erupted into protests, such as the one in 2008 by more than 500 residents in south-western Yunan province against two officials who took 1 million yuan ($146,000) worth of bribes.”

Last year, around 35 bosses of state-owned enterprises were arrested for corruption. The latest was Zhang Chunjiang, 51, the vice-chairman of China Mobile. He was also a former CCP secretary and once held a government post equivalent to a vice-minister. The accounts of his case are typically lurid: “He wined and dined lavishly,” the Straits Times said, “kept a string of mistresses and falsified 20 billion yuan ($2.9 billion) worth of accounts. It was that usual cocktail of sex and financial wrongdoing . . . .”

The CCP said the 2,231 cadres expelled from the party last year made up just 0.029 percent of its 76 million members. Professor Ren said that figure is meaningless. “The vast majority of party members are ordinary people,” he said. “Unlike those in leadership positions, they don’t even have the opportunity to be corrupt.”

Three executives from state-owned enterprises were sentenced to death last year for graft and two were executed:

  • Li Peiying, former president of the Capital Airports Holding Company, was executed in August after he was found guilty of bribery and corruption involving 26.61 million yuan ($2.66 million).
  • Last month, Yang Yanming, a former senior trader with a Chinese securities company, was executed for embezzling and misappropriating public funds amounting to 94.52 million yuan ($13.8 million).
  • In July, Chen Tonghai, the former boss of China Petrochemical Corporation, was sentenced to death and given a two-year stay of execution. He was convicted of taking about 200 million yuan ($29 million) in bribes.

See our post here.

In 2009, four of 11 FCPA enforcement actions against organizations involved bribery in China.

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