No sign of Xi pausing anti-corruption campaign

China’s leadership is unlikely to shift its attention from fighting corruption to focus more on economic and financial reform, according to academic Sonny Lo.

Although the Chinese leadership does not distinguish between its campaign against corruption and its campaign to restructure the economy, the clampdown on crime will continue to demand most of its attention, according to Sonny Lo, professor at the Hong Kong Institute of Education.

Lo, who is head of the institute’s department of social sciences, specialises in the politics of organised crime in Greater China.

He said the leadership in Beijing would reject the notion that the Communist Party must first conclude its anti-corruption campaign in order to shore up the political power required to then tackle difficult economic reforms, such as restructuring state-owned enterprises.

Party leader Xi Jinping and his allies would regard these and other reform efforts as simultaneous. Lo noted that the salaries of SOE executives have been slashed in recent months, and Wang Qishan, the vice-premier who leads the graft-busting efforts, has said the cleanup involves all fronts.

However, Lo said continuous resistance to the anti-corruption campaign means it is likely to occupy most of Xi’s attention, at the expense of other initiatives.

The likelihood of Xi being able to declare some kind of victory against corruption in the middle of his term, and free himself to be more vigorous with regard to SOE reform or other financial reforms, is low, he said.

Lo made his remarks during an address at the Foreign Correspondents' Club in Hong Kong. Much of his talk covered different aspects of the politics of fighting crime in mainland China, Taiwan, Hong Kong and Macau.

In the case of mainland China, the capacity of the central government to fight organised crime is strong. “The central government in Beijing sees organised crime as a national security threat,” Lo said.

But Beijing struggles to get other levels of government to behave accordingly. Provincial, municipal, township and village governments often ignore Beijing. Organised crime can wield influence or has penetrated lower levels of government, particularly in coastal areas such as Guangdong and Fujian provinces.

Campaigns against corruption, as well as ongoing campaigns against prostitution, terrorism and drugs, are sometimes carried out by central or province-level police or paramilitary authorities as a way of clamping down on wayward politicians, police forces or, possibly, Xi’s political enemies.

'Independent local kingdoms'

Lo styled some of these rebellious politicians as analogous to “independent local kingdoms”, noting Xi is determined to stamp them out. In 2013, Xi assembled a National Security Council. Although the name evokes a similarly named body in the US, the Chinese version is more inwardly focused against threats against the Party, including corrupt vested interests.

But there are signs of continued resistance to the anti-corruption campaign. Lo cited media reports in the Hong Kong or Taiwan press that said the seven-man standing committee of the Politburo – of which Xi is the most senior member – debated introducing a Hong Kong-style, independent anti-corruption investigative commission.

Clean: Hong Kong

In the 1970s, Hong Kong made a clean break with a corrupt past when the British colonial government set up the Independent Commission Against Corruption. This was introduced along with an amnesty for officials who declared their corruption by a certain date. The ICAC and the amnesty are considered successful in giving Hong Kong clean administration.

However, Lo said, according to the media reports, China’s standing committee has debated but rejected such a move.

Xi’s modernisation of the People’s Liberation Army is also viewed as part of the anti-corruption campaign, and Lo said there was evidence that entrenched interests continue to resist reform.

The upshot is that, based on Lo's arguments, the anti-corruption campaign is unfinished business. Financiers and businesspeople hoping for Xi to declare victory against criminal elements and move on to economic reforms may be disappointed. SOE restructuring and other reform elements remain on the central government’s agenda, but they cannot be isolated from the anti-corruption campaign.

¬ Haymarket Media Limited. All rights reserved.