1. 1
Anti-Corruption in China
Prepared for: Professor Wang
Prepared by: Anas Alazzam, Subhi Barakat, Madeline Ezell, Caitlin Hayes, &
Samuel Triplett

2. 2
Historical Background of Anti-Corruption Laws
Corruption in runs deep in Chinese culture. It has attributed to income inequality and
compromised the legitimacy of the Communist Party. Many of the Chinese officials receive
irregular income because of their system of government. To combat this many officials have
been accepting other forms of payment to supplement a lower salary. Corruption prevails
because China is a growth-based system. This means there is a large amount of stress put on
performance at all levels of the government. Receiving promotions means they can outperform
their colleagues and meet goals. These officials in the past have used graft as a means to reach
these goals.
There have been efforts to stop corruption since the economic reform in 1978 but, the
campaign against corruption that was created in 2012 was the first one to make real strides
against graft. The anti-corruption campaign encourages people to come forward to report if they
see any acceptance of bribes or gifts by public officials. The campaign followed the end of the
18th National Congress of the Communist Party of China in 2012. This campaign was carried
out under the president Xi Jinping. Secretary Hu Jintao and Xi Jinping have both emphasized
repeatedly the importance of anti-corruption for the future of the communist party. When Xi was
placed in office he stated in his inaugural speech that he vowed to help end corruption in China.
He stated that it would “doom the party and the state.” (New York Times)
It was the largest organized anti-corruption effort in China. When Xi took office he said
he get rid of “tigers and flies.” This included high level officials and civil servants who were
suspect to corruption. This lead to investigations in search of corruption of thousands of
officials. Most officials who were under investigation were removed from their positions. They
faced an array of charges from bribery to abuse of power.

3. 3
No one was supposedly exempt from the campaign. Some officials that seemed to be
above the law were charged with corruption offenses. Among these were high-ranking officials
who were former leaders of the Politburo Standing Committee (PSC).
The first regional inspections lead to the the Sichuan Deputy Party Secretary Li
Chuncheng being relieved of his position. This happened shortly after Xi took office. Near the
third quarter in 2013 the first round of inspection teams were sent out. They were sent to
Jiangxi, Inner Mongolia, Hubei, and Chongqing. (China News, 2014) In this there were several
provincial level officials that were investigated. Some of them were later removed from their
positions. Later that year the anti-corruption campaign focused its efforts on Zhou Yongkang a
former member of the PSC and national security chief. He had heavy influence over the national
oil sector, Sichuan Province, and security organs. Many people who worked under Zhou were
affected by this and were also put under investigation. This included senior officials and Zhou’s
former secretaries.
The second regional rounds was deemed a political earthquake. This time inspectors
were sent to Shanxi, Anhui, Yunnan, Jilin, Hunan, and Guangdong. In these provinces there was
suspicion of collusion between business heads and local politicians. (Beijing Youth Daily) They
had ties to the coal industries in these areas. Other areas under investigation during this period
were Xinhua News Agency and the Ministry of Commerce. Both these agencies had ties to the
construction of the Three Gorges Dam.
Next the fall of the “Big Tigers.” On June 30, 2014 it was announced that Xu Caihou
once a member of the PSC and Vice Chairman was expelled from his positions. He was accused
of taking bribes in return for job promotions. He was the highest ranking military officer to be
investigated since Bo Xilai. (New York Times) A month after this it was announced that Zhou

4. 4
Yongkang had “severe disciplinary violations.” Shortly after he was placed under house arrest.
He was the first member of the PSC to be removed from their position since the Cultural
Revolution. Ling Jihua was the fourth big tiger to be taken down. He was the head of the United
Front Work Department and the VP of the CPPCC (legislative advisory). The investigation also
targeted some members of Ling’s family.
Since the beginning of the campaign in 2012 it is estimated tens of thousands of officials
have been “disciplined” through the anti-corruption act but, few have been prosecuted.
(Business Insider)
This graph represents the number of officials disciplined and severely disciplined.
The Importance of the Issue
In the Chinese business world, Guanxi is a significant part of conducting business within
the country. Informal institutions have forced natives to form a solid trust bond in order to
minimize risk. Can guanxi be decoupled from corruption?

5. 5
Guanxi is both an institution in addition to an informal intervening mechanism that
incorporates the tailored networks of authority in Chinese society. Guanxi describes a personal
relationship between two people in which one is able to depend on another to perform a personal
favor or service. Another way guanxi is used is in shared relation and common understanding
and for shared interest and/or benefit. Contrary to recurrent Western interpretations of guanxi,
there is absolutely nothing eccentric or extraordinary about it. In its humblest form, guanxi
compares with a crossroads in which a person can choose a direction. It is also the ability to
choose or discard a friend based on common need and interest and corresponding time outlooks.
Guanxi also corresponds to family bonds which are neither selected nor dispensed. The trust that
builds through guanxi and the network it advocates compares to the old boys' club and
associations that have shaped Western societies over the times, such as between ship merchants
in Japan and Norway where transactions were completed based on verbal contract (“My word is
my bond”).
Fighting corruption is a huge priority of China’s new leader's national plan. When Xi
Jinping and Li Keqiang take control as party heads they will have to deal with the political
heritage of poor governance at both the federal and local levels, inadequate social welfare
distribution, rising civil defiance, and expanding social separation.
This has led to a string of scandals, from the fall of Bo Xilai and the sentences of senior
officials to the discharge of Liu Zhijun, the former railway minister. Although there is a public
pledge by the government to attack corruption, which has seen the presentation of new
legislation to punish overseas bribery, so far very little noticeable progress has been made at
home in China.

6. 6
To bring about serious reforms, China’s government needs to distribute adequate
resources to prioritizing long-term economic and institutional modifications. In researching this
topic as a group, we stress the significance of a strong nationwide integrity system where the key
leaders of state – including the judiciary, the police, the executive and the legislature – are fully
transparent and accountable for their actions. For the new Chinese leaders to triumph in their
anti-corruption efforts the top priority is to understand why and how corruption infiltrates the
heads of state.
In the 2011 Global Corruption Barometer, a survey of public opinion on corruption, more
than 33% of Chinese people said they thought the Chinese government was unsuccessful in the
battle against corruption and 46% said corruption had actually increased in the previous 12-
month period. Business was thought to be the most corrupt sector, followed by the police,
Chinese political parties and parliament. (Figure 1) This was validated by the 2011 Bribe Payers
Index, which surveys businesses on which country is most likely to bribe overseas. Out of 28 of
the world’s largest exporting nations, China came second to last, just ahead of Russia.
Figure: 1 The extent to which the following institutions are perceived by the public to be the
most affected by corruption.

7. 7
The Problems and Implications
Interview： Wanting to only be referred to by his surname, Mr. Zhang said on record: “I
came to the US about 5 years ago for school, my family was originally fairly well off, living in
Xiamen, Fujian, so they had me come out here to pursue my dream career as a fashion
photographer. About a year after I got here, Xi become the new premiere, and as he began his
anti-corruption campaign, we definitely worried that something would come up. I say this not to
admit guilt that my father was doing corrupt things, but to be honest, there’s no honest man in
the CCP. Our fears stemmed from the fact that, even though there is only “one” party in china,
there are definitely different groups within the party that are more for or against certain things,
and certain representatives. My father was a very close follower of Hu Jintao, and many of the
provinces and circles he was closest with, were held under the most scrutiny by the new anti-
corruption campaign. Not only is Xi looking to eliminate corruption, but he’s using this
campaign to ensure his power is consolidated, that loyalties are strictly to him, and not any other
persons who have or at one point had a good amount of influence. I would never say that people
doing corrupt things shouldn’t be punished for their misdeeds; however, I also don’t want people
to think that this campaign came from pure intentions, there’s much more than meets the eye in
this game of Tigers and Flies.”
To take just a look at how this situation is not strictly limited to anecdotal accounts,
another, often overlooked abroad, and fervently ignored within China itself, is the example of Bo
Xilai. A legacy politician in China, his father being known as one of the “eight immortals”
within the party during Mao’s reign, he already carried with him a reputation for anti-corruption
drives through his work in Dalian, and in 2008 was the key figure instrumental in bringing down

8. 8
a massive corruption ring in Chongqing, resulting in the arrest of over 1,500 people, including
several top officials and many working in organized crime. (Time)
Through his purges, he quickly became praised as a true revolutionary fighting for the
Party to make China great again, and was on the track to get even higher ranking roles within the
Party. A man who had spent decades fighting corruption from the municipal level all the way
through the prefecture level, and having a bright future within the Party, should be the greatest
thing for any politician in a socio-economic environment increasingly critical of the issues
created by the corruption within China’s government. This popularity though may have resulted
in him suffering from Icarus syndrome, flying too close to the sun. In 2012, right as the current
General Secretary, Xi Jinping, took office, an underling of Bo’s came forward with alleged
evidence that Bo had also taken part in corrupt practices, and with his wife, committed the
murder of a British businessman. (Wines)
Many supporters of Bo and his desire for a tighter control of economic planning by the
Party feel that many of the events surrounding Bo were directly meant to strip him of power, and
were not necessarily factual. While many proponents of Xi Jinping and the current Party
leadership have stated that sometimes those fighting hardest for anti-corruption are those trying
to hide their own transgressions. (Chinese Citation Below)
The largest problem with any of these alleged power moves in the name of anti-
corruption, is that there’s no true way to discern which cases are legitimate power moves and
which aren’t. And to what extent those Party members on the right side of the leadership are still
allowed to get away with corrupt practices if only because they are currently in the Party’s favor.
This has already had an effect on the economy by making Party members at all levels throughout
the government hesitant to do anything for fear of reprisal. Many international businesses have

9. 9
supported the anti-corruption crackdown in hopes it will lead to more transparency to doing
business within China, but at the same time are seeing many projects, both those already
underway, and those still awaiting approval, to grind to a standstill, or even be cancelled
altogether. (IBTimes)
As the anti-graft campaign continues, even the Central Committee for Discipline
Inspection, the main governing body in charge of the campaign, has stated that it has had a
negative impact on the Party’s image. (SCMP) Between the slowing economy, in part due to the
campaign, and the campaign’s negative effect on Party image, it is anticipated that Xi Jinping
shall continue finding more ways to consolidate power and ensure that the Party comes first
before anything else in an attempt to reign in any potential dissent, both within the Party and
throughout the population. If public support of the Party begins to waver more as the economy
slows down, Xi Jinping will most likely continue to use the Anti-corruption campaign to be a
“core” leader for the CCP, and could mean that Xi will remain in power for more than the five or
ten years typical of the Party’s previous General Secretaries.
Current Status
After the conviction of former security chief Zhou Yongkang, China’s top anti-graft
representatives seem to have a new purpose: bringing down public expectations.
Official television gave subdued coverage to the conviction of Mr. Zhou, who was once one of
the Communist Party’s top leaders. He was convicted on charges of bribery, abuse of power and
sharing state secrets, according to official broadcasting accounts. He was the most high-ranking
Chinese governmental figure arraigned for crimes since the 1970s.

10. 10
Instead of strengthening publicity, a north China court covertly prosecuted Mr. Zhou and silently
sentenced him to life in prison. Chinese media that reported the court decision provided few
details of the allegations.
The discrete approach appears the most recent signal that China’s governance is
recalibrating the communication of its over two-year anti-corruption initiative that laws,
procedures and honesty are more important than trophies. “The task has changed,” the party’s
anti-graft watchdog, the Central Commission for Discipline Inspection. In an announcement
published to its website, the commission said tough rules will promise long-lasting reform,
signifying that high-profile political targets are “gusts of wind.” (Figure 2)
The moderately discreet presentation offers the latest signal authorities are de-
emphasizing shock value as the level of success in a uphill battle against corruption. “They don’t
want the public to pay too much attention,” said Cheng Li, a senior fellow at Brookings
Institution in Washington.
Chinese President Xi Jinping initiated the campaign soon after he came to power in 2012
because he established costs to the Chinese economy from official corruption were too large.
Now, slowing economic growth may be discouraging the leadership from underlining any
problem that might hinder economic confidence, pull down Shanghai’s prosperous stock market
or have other negative impacts to the government and economy.

11. 11
Figure: 2 Shows the web of corruption stemming from Zhou.
Recently, the party’s graft-fighting order has issued a string of statements that guarantee
its continuous attention while also playing down hopes for big-name targets. State media quoted
the commission’s deputy chief, Huang Shuxian, as saying that after removing top officials,
investigators are zooming in on corrupt lower-level teams, or the “flies” in the government's
pledge to “catch tigers and swat flies” during the campaign.
Foreign investors are expecting Beijing to build on the anti-corruption work with
institutional change. The European Union Chamber of Commerce in China in a member survey
found nearly half—47%—were definitely impressed with the administration’s anti-corruption
works over the past two years, with even better scores in industries as dissimilar as professional
services and chemicals.

12. 12
But EU business executives don’t see the same level of improvement on institutional
reforms such as regard for rule of law, an area in which 57% of legal professionals and 39%
overall said efforts have trailed behind hopes.
The Possible Solutions of the Issue
Corruption in China has been a major issue in the 21st century; it has notably grown
faster since the marketization reform in 1978 and has become a big challenge to the Chinese
government. There have been various measures that have been put in place to curb corruption but
still more can be done to control corruption more.
For corruption to end in China they should be operational and strict law enforcement
measures so as to make sure that the offenders are punished. This aims at showing the
consequences of been corrupt to those who are already engaging themselves in corruption
(Zhang 133). There should be a strong legal framework on how the law should be enforced and
how offenders of the same should be punished.
Additionally, the government should promote transparency and ease of information
access. Countries which have succeeded in controlling corruption have a tendency of
government openness and freedom of press and ease of access to information to the public
(Zhang 135). The ease of access to information enhances the ease in response from the
government bodies regarding any issue at hand which in turn increases the level of public
participation. Government expenditure and budgets should also be clear and transparent so as to
reduce misuse of funds.
Empowering the Chinese citizens will empower them to hold the government responsible
and accountable in case of any scenario of corruption, empowering citizens also enhances mutual
trust in between citizen and government (TaeShik Kim 315). Empowering citizens reduces

13. 13
mismanagement of public funds by government officials as the citizens are openly involved in all
government undertakings and projects.
A platform should be created to allow the citizen to report cases of corruption in China.
An app or websites can be designed to make sure people who take part in corruption are reported
via the selected methods by the public. However, they should be a means of protecting those who
report these incidents for safety purposes. The app or the website created should be user-friendly
so as or ensure ease in accessing for all citizens without there been a barrier.
Civil servant wages should also be increased so as to reduce the temptation to accept a bribe
from the public or for any government services provision. Civil servants often find ways of
supplementing their low wages by receiving and even going to the extent of a request for a bribe
(TaeShik Kim 320). Better payment for the civil servants will reduce this instance of corruption
as they will feel fully compensated for their service.
Closings of the international loopholes that exist as the access to international financial
system facilitate corrupt officials to hide stolen money via this channel. Most corrupt officials
frequently hide their money oversea so as to reduce chances of been caught hence financial
center should interlink so as to share information on official's offshore accounts so as to track
illegal flows of money.
Conducting civic education to citizens should be done to help them understand the law
more clearly (TaeShik Kim 322). It also helps them to know their rights as a citizen which in
turn reduces the risk of civil servants taking advantage of citizens due to lack of knowledge.
Citizens are crucial to ensure that the fight against corruption is successful as they are involved
in the day to day activities of the country.

14. 14
Additionally, improving financial management of public funds may also come along to reduce
corruption and also strengthening the role of auditing agencies will help a long way in fighting
corruption. Proper management of funds will help to reduce misappropriation of funds and
resources and ensure funds are utilized in the correct manner. Auditing agencies should also be
empowered and enhanced so as to allow greater transparency in funds management and use
allocation.
Corruption is a big issue in China and has slowed down the growth of the economy in
various ways but through the adoption of various means as highlighted in the paper, curbing
corruption should be easy. Ways like enhancing government transparency and the press freedom
and introduction of strict laws and massive punish on offenders will help a long way in curbing
corruption in China.
Future Outlook
In order to ascertain the future of China and the corruption that taints the nation, it’s
critical to understand China’s roots. Whether it be good or bad, China has many companies who
delve in corruption as one of its primary means to successfully compete not only domestically,
but internationally as well. It is for this reason; China’s corruption problem is unlikely to be
resolved within the realms of China alone. It’s no secret that the Chinese government has
displayed a wide array of corrupt tendencies in the past century. Some of these undertakings
have led to an economic edge in the Chinese economy, while others have severely damaged the
ability for ethically functioning businesses to survive and operate within China, hence
amplifying the corruption crisis.
While some would assume that the eradication of corruption within the nation would
resolve many of the challenges today’s China faces, the equation is not so simple. In short, the

15. 15
very foundation of business practice within China, as well as “loose” regulation around particular
laws has allowed for many businesses within China to be internationally competitive. If one were
to remove the corrupt layer, for example, the enforcement of a safety regulation in a factory, this
may cause the competitive edge to diminish – due to increased costs.
So where does this leave the future?
Although government policies within China aimed toward eliminating corruption are a
potentially viable solution, the evidence of economic sustainability in these plans is limited. To
elaborate, the economic factors in play cannot simply be ignored for the hope of a corruption free
China. When an internationally competitive company has based its profit margins upon
underpaid workers for example; a government regulation has not stopped these corporations in
the past and will not stop them now. It is we, the western consumer, who drive the demand for
these unrealistically low price points.
If the Chinese government understands this equation, and truly wishes to expulse
corruption from the nation, it is going to be a gradual process. Making these companies
economically unviable overnight for the want of eradicating corruption is in fact forcing some
Chinese corporations to delve deeper into corruption than ever before.
It’s critical to understand, in addition to corporate corruption, the governmental
corruption and propaganda that Chinese Citizens see daily. Chinese citizens do not generally
oppose corrupt business practice due to fear and potential economic repercussions. Many high
level officials hold stakes in valuable companies feeding into the corruption. Lines between
bribery and bureaucracy are often blurred as government officials cash in on business activities.
Corruption in China, present in every level of the government, has become an increasingly
important topic around the world as the country has risen to a global power. Although corruption

16. 16
may have in part fueled the fast growing economy of China it remains a threat to future
development. As China has moved into a more modern and international economy, corruption
has become more harmful than beneficial. If corruption is not controlled or reduced over time the
Chinese economy could be seriously damaged. Corruption not only threatens the credibility of
the nation but if left unattended could spiral out of control leading to unpredictable consequences
such as widening income inequalities and growing citizen resentment towards the government.
In the years ahead China must continue to move into a more market driven economy
characterized by private firms untouched by corruption. The government should reduce
unnecessary interference with the economy, through cutting red tape and deregulations to lessen
the appeal or need of corruption. Going forward, government officials in China need to accept
the fact that entrepreneurs and businesses will get rich without them being able to cash in on it.

17. 17
Works Cited
Bradsher, Keith (December 5, 2012). "China's Anti Corruption Commission Investigates Senior
Official". The New York Times.
Buckley, Chris (June 30, 2014). "China's Antigraft Push Snares an Ex-General". The New York
Times.
Lane, Scott. "Does the Chinese Practice of Guanxi Lead to Corruption in Business?" Www.ethic-
intelligence.com. Ethical Intelligence, 07 Apr. 2016. Web. 22 Nov. 2016.
E.V., Transparency International. "Fighting Corruption in China." Fighting Corruption in China.
Transparency International!, n.d. Web. 22 Nov. 2016.
"Why the Anti-Corruption Drive in China Is So Important." The Atlantic. Atlantic Media
Company, n.d. Web. 22 Nov. 2016.
Areddy, James T. "China's Corruption Drive Shifts Focus After Zhou Conviction." WSJ.
Wsj.com, 12 June 2015. Web. 22 Nov. 2016.
TaeShik Kim. "A Study on the Issues of Corruption and the Solutions in China –Focused on
comparing with the Anti-Corruption System of Hong Kong." journalofethics, vol. 1, no. 97,
2014, pp. 307-330.
Zhang, Wei-Wei. "Corruption." Transforming China, 2000, pp. 132-140.
"那些不再是"同志"的政治局常委_大公网." 那些不再是"同志"的政治局常委_大公网. N.p.,
n.d. Web. 28 Nov. 2016. <http://news.takungpao.com/special/szqh_changwei/>.
"中央巡视组第一轮工作收尾：7个巡视点6个查出腐败". Chinanews. September 27, 2014.
"原云南省委书记白恩培被调查". Beijing Youth Daily. August 30, 2014.

18. 18
Mauro, Palo. "Curbing Chinese Corruption." China-US Focus. N.p., 30 Sept. 2013. Web. 29
Nov. 2016.
Tiezzi, Shannon. "China Vows to Keep up Anti-Corruption Efforts in 2016." The Diplomat. The
Diplomat, 26 Jan. 2016. Web. 29 Nov. 2016
Wedeman, Andrew. "Growth and Corruption in China | China Research Center." China Research
Center. N.p., 11 Dec. 2012. Web. 29 Nov. 2016.
(http://www.scmp.com/news/china/policies-politics/article/1815569/chinas-graft-busters-admit-
corruption-drive-has-hurt?page=all)
(http://www.ibtimes.com/how-chinas-anti-corruption-campaign-putting-pressure-slowing-
economy-2308834)
(揭发薄熙来，王立军不愿当被猛嚼后弃鞋底的口香糖？(in Chinese). Voice of America. 9
February 2012. Retrieved 9 February 2012.)
.(Wines, Michael; Ansfield, Jonathan Report on Ousted China Official Shows Effort at Damage
Control, The New York Times, 19 March 2012.)
(http://content.time.com/time/world/article/0,8599,1931342,00.html)