China ahead of India in austerity and anti-graft drive

China ahead of India in austerity and anti-graft drive

By JAYADEVA RANADE | New Delhi | 8 January, 2017
anti-graft drive, Operations Skynet and Foxhunt, China, Xi Jinping, Politburo Standing Committee member
Chinese President Xi Jinping.
In January 2016, China initiated Operations Skynet and Foxhunt to retrieve stolen funds and help bring fugitives hiding overseas to justice.
Corruption has long been a major concern and cause for public anger in China and India, both ranked among the world’s most corrupt nations. A high percentage of the almost 200,000 major protests across China each year are sparked by popular outrage at the corruption and ostentation of party and government cadres. With the demonetisation of high value currency notes on 8 November 2016, the Indian government took a visible initial step towards a serious drive against illicit wealth and corruption.

Meanwhile in China, within a week of assuming office in November 2012, Chinese President Xi Jinping moved to assuage public concern and launched a severe austerity drive to curb ostentation and profligacy. Official Chinese government reports reveal that within two years, the drive, which mandates “one soup and four dishes” for all host organisations, regardless of the status of guests being entertained, yielded savings of US$8.6 billion in public spending. Despite the estimated 2-4% adverse impact on the GDP, caused by the closure of restaurants, entertainment outlets etc., the drive continues.

Also within weeks, Xi Jinping instructed Politburo Standing Committee member (PBSC) Wang Qishan, a trusted friend since school and head of the Party’s Central Discipline Inspection Commission (CDIC), to launch a vigorous campaign against corruption throughout the party and government. In October 2013, the powerful People’s Liberation Army (PLA) was brought within its ambit. Wang Qishan despatched teams of CDIC personnel to party units, State-owned Enterprises (SoE), government ministries and academic institutes. The PLA was not exempt and CDIC investigative teams visited each service headquarters, military region and other PLA formations.

The campaign yielded immediate results and within two years more than 160,000 “phantom” government employees had been removed and 74,000 party members punished for violating austerity rules. Reports disclosed that more than “100,000 excessive government vehicles” were confiscated. Quoting officials of the Civil Aviation Administration of China (CAAC), the Canada-based Chinese-language website “Boxun” said that over US$4.9 billion were recovered from more than 350 Chinese officials caught at Beijing airport in 2012, while attempting to flee. Separately, the Supreme People’s Procuratorate reported that 762 officials were captured in flight in 2013, and goods and cash worth over US$1.6 billion recovered. The People’s Bank of China “leaked” a report estimating that 18,000 officials and employees of state-owned enterprises had misappropriated US$123 billion and fled to the US, Canada, Australia and the Netherlands.

In January 2016, China initiated Operations Skynet and Foxhunt to retrieve stolen funds and help bring fugitives hiding overseas to justice. By the end of December 2016, the Ministry of Public Security claimed that 857 fugitives were brought back from 66 countries and regions. Two suspects were sent back from the United States and six from Italy, Greece, Bulgaria, Spain and Hungary. Another 283 fugitives were captured in Southeast Asian countries including Thailand, Malaysia and Cambodia. Separately, the CDIC claimed that since 2014, Skynet has brought back 2,442 individuals, including 397 government workers, and recovered more than RMB 8.5 billion. China estimates that 150 Chinese officials suspected of economic crimes and facing corruption charges are absconding in the US. There has been at least one report of Chinese officials trying to enter the US posing as journalists and some Beijing-based British, US, Canadian and Australian diplomats earlier said they were under pressure to assist with Operation Fox Hunt.

In September 2016, the CDIC issued a report stating that 127 civilian “tigers”—defined as officials holding bureaucratic ranks equal to or above that of Vice Minister in the government, party and State-owned Enterprise (SoE)s—and 86 military “tigers” (PLA officers of the rank of major general or above) had been implicated in corruption and been placed under investigation or under arrest. The list includes one former member of the Chinese Communist Party’s highest leadership body, namely the Politburo Standing Committee and three former members of the next level, or Politburo. The CDIC regularly posts the names of officials under investigation. China’s official media has reported instances of senior PLA officers committing suicide to avoid conviction, which would mean their family losing all financial and retirement benefits. Xi Jinping and Wang Qishan recently stated that the anti-corruption campaign—already the longest and most sustained anti-corruption campaign undertaken by the CCP—would continue. Buttressing their statements, the first serving PLA General was arrested on 29 December 2016.

While government and military officials are resentful of the campaign and businessmen complain that the amount they have to pay in bribes has risen, Xi Jinping’s popularity among the masses is very high.

In India, having taken the first step in tackling an equally difficult task, Prime Minister Narendra Modi, with his reputation for decisiveness and a strong popular mandate, could now well lift a leaf out of the Chinese book.

Jayadeva Ranade is a former Additional Secretary in the Cabinet Secretariat, Government of India. He is President of the Centre for China Analysis and Strategy. The views expressed are personal.

 

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