Xi Jinping
Chinese President Xi Jinping (David Moir, Reuters photo / February 19, 2012)
August 19, 2013
The new regime of Chinese President Xi Jinping is turning up the heat on corruption there, and is making sure you can read all about it. Stories of graft, official excess and corporate malfeasance abound, not only in foreign news outlets but also in China's emboldened domestic publications and social media.
Xi, who took office in March, has responded aggressively to public complaints about official misconduct. He has denounced corruption as a threat to the existence of his ruling Communist Party.
His crackdown has targeted companies as well as government bureaucrats. That's a good sign; China is overdue for an upgrade of its shaky business standards. The world's second-largest economy (after the U.S.) can't afford to let cheaters siphon off a big share of its wealth, as they have done for decades.
A cleanup would work in favor of Western companies that are now shut out of such industries as energy, finance and real estate, where insiders take care of their own. Western multinationals generally maintain strict policies against bribery, kickbacks and other improper activities. Many claim they operate at a disadvantage in China because they refuse to pay off bigwigs in local government and state-owned enterprises that dominate large sectors of the economy.
It's good to keep a healthy dose of skepticism about this crackdown. Critics say it's window-dressing. China recently imprisoned a leading Beijing anti-corruption activist, Xu Zhiyong, who has pushed for government transparency. Xi may see corruption as a threat, but he still sees vocal opposition to Communist rule as an even greater threat.
Still, he seems to recognize the value of a change in the culture, and the Chinese public seems to welcome that.
Xi has eschewed lavish banquets, opting for simpler meals.  "Four dishes, one soup" is a hot political catchphrase. Officials who meet with Xi typically leave their luxury cars and fancy wristwatches at home. Sales of French wine, chic cigarettes and delicacies such as shark fin and abalone have plunged.
More than 2,200 officials have been publicly disciplined this year for abusing their positions for personal gain. One collected $160,000 in "gifts" at his daughter's lavish wedding. Another, who came under investigation when a graphic sex tape leaked on to the Internet, faces years in prison for taking bribes.
Chinese companies and foreign enterprises operating in China stand accused of corruption. Chinese authorities charge that British pharmaceutical giant GlaxoSmithKline bribed doctors and hospitals on a massive scale to push its drugs and vaccines. The company has conceded that its executives in China acted outside its policies and "appeared" to have broken Chinese law.
Chinese companies that have long operated with impunity face new scrutiny. In a remarkable example, a journalist using social media accused state-owned China Resources of grossly overpaying for a mining acquisition and diverting some of the money to executives involved in the transaction. The giant conglomerate has denied wrongdoing. Government watchdogs reportedly are investigating.
The rich and powerful don't enjoy the protection they once thought they did. Bo Xilai, a populist Chinese politician, faces corruption charges. His wife was convicted last year in the murder of a British businessman who had threatened to expose the family's hidden offshore wealth. The murder illustrated how some high-ranking Chinese had felt free to operate outside the law.
Xi's crackdown is a work in progress. Unlike the tradition of the American presidency, where the first 100 days typically bring a rush for change, China's leaders tend to set priorities, methodically build support and deliver over the course of years. But given China's historic protection of insiders and tolerance of corruption, this effort is a pleasant surprise.