CORRUPTION Syndromes of Corruption

Official Moguls 165
Increasingly Chinese corruption involves collusion among officials,
and often includes their business favorites. An official embezzlement
ring in Hebei province, fraudulent dealing in land leases by twenty bureau
or department heads, and a corruption ring involving public security
officials and a business leader in Quinghai Province are examples
(Gong, 2002: 86). The largest schemes can be quite lucrative: a major
smuggling ring in Xiamen, Fujian province, may have brought over $6
billion worth of oil, cars, and other goods into the country between 1996
and 1999, avoiding as much as $3.6 billion in taxes. The deal began in an
international trading company but required systematic participation by
nearly 600 local customs, tax, and harbor officials (ABC News.com,
2000; People’s Daily Online, 2001b; Gong, 2002; Yao, 2002).
Official impunity extends into the smaller cities and countryside too,
aided by economic reform (Sun, 2004: ch. 4). Local party cadres and
bureaucrats have acquired wider powers while supervision has weakened,
producing a range of abuses at the expense of peasants and villagers. Early
in the reform process local functionaries administering grain production,
harvests, and seed allocation learned how to pursue personal gains (Oi,
1991). In the 1992 ‘‘IOU Crisis’’ local governments and bankers (the
latter very much a part of the official apparatus) in rapidly growing areas
diverted funds into unauthorized loans, creating such a cash shortage that
payments for crops came in the form of ‘‘white slips’’ (baitiaozi) while
subsidy programs went into default (Wedeman, 1997b). One result of
such abuses has been a loss of faith, in rural areas, in efforts to govern
through laws, and renewed backing for Maoist-style mass anti-corruption
campaigns (Li, 2001).
The death sentences noted above may seem contradictory to the notion
of weak constraints on official behavior. But looked at another way they say
more about the party-state’s inability to control officials on a continuing
basis. A state capable of maintaining economic fair play and administrative
standards through the courts and bureaucracy would apply a variety of
moderate penalties quickly and credibly, and would not need to resort to
extreme measures. But China faces a complex dilemma: unable to enforce
either party discipline or state policy effectively, it still devolves important
powers and growing de facto discretion to individuals throughout the
country. Control from above is weakening, and the opposition parties
and civil society that help check official impunity elsewhere do not exist.
In an economy that is liberalized but not institutionalized, skillful Moguls
who do not overreach themselves politically have much to gain. Relatively
few are caught: Pei (1999: 101) reports that in 1996 only around a fifth of
township level corruption allegations, and even fewer at higher levels, were
even investigated. Those who are punished often have engaged in