Xi Jinping's Dilemma: to fight corruption or not to fight?
Original Article in Chinese: 习总的哈姆雷特之困：反腐败，还是不反？
By He Qinglian on January 30, 2013
Lately, CPC General Secretary Xi Jinping is caught in a Hamlet dilemma. The question on his mind, though, is not "to be or not to be", it is about fighting corruption.
By fighting corruption it could mean a general anti-corruption campaign or one that focuses on a small area; it could also imply a campaign with actions to be taken in full force or with some restraint.
To be fair, “not to fight corruption” is truly not what’s on Xi Jinping’s mind. Otherwise, he would not have personally led five other CPCCC Standing Committee members to the Central Commission for Discipline Inspection (CCDI), an organ oversaw by Wang Qishan, to deliver his speech that he would "catch both tigers and flies" when fighting corruption and corrupt officials, regardless of the scale of the bribe they took and their social prestige, would not escape punishment.
That speech was, in all probability, an attempt to correct Wang’s comment earlier that the anti-corruption campaign should be gentle and low-key. However, the dilemma Xi is facing is that there is an overwhelming number of both large and small bribe-takers—"tigers" and "flies"—in the government, and it is difficult to determine where and how to strike. Apartments owned by officials are but an example of a problem impossible to address.
The dramas triggered to officials' apartments in China are related to the economy and politics. And since these dramas are also relevant to the people's livelihood, they have become aggregation points for people's grievances. As a result, the anti-corruption campaign in China's officialdom and the mass selling of real property from late November 2012 could be likened to a two-act play in which officials assume the leading role and their apartments served as the predominant props.
The first act began when the so-called “the apartment families” that were exposed by an internet anti-corruption campaign in late November 2012. In the twenty-odd days to follow, netizens across the country took the opportunity to report officials of middle and low rankings who processed a dozen or even more than twenty luxury apartments. Based on the age and gender of those officials, they were dubbed “apartment uncle”, “apartment grandpa”, “apartment auntie”, “apartment sister”, “apartment girl” and “apartment ancestor” (!). Officials included in this list have at least a dozen apartments to their names. The most noticeable “apartment ancestor” at the moment is Cheng Shaochun, chief of Licheng District Public Security branch bureau, Jinan city, Shandong, who reportedly owns 16 luxury apartment complexes—not just apartments, but apartment complexes.
With reference to the property price in China, it is nearly impossible for the country's officials, regardless of their ranks, to purchase commodity flats using their salary alone, not to mention owning ten-odd or even dozens of apartments.
Without doubt, these apartments are related to their owners' acts of corruption.
Once dawned on the mind of those officials that their assets could come to light at any moment and would be used as the target to fight corruption, the apartments these officials used to see as the symbol of their wealth are now “risk assets”. The officials and their family became anxious about their apartments.
And so the second act of the play began. In dozens of cities across China there have been selling of apartments en masse.
According to a circular by the CCDI, the statistics prepared by the Ministry of Housing and Urban-Rural Development (MOHURD) and the Ministry of Supervision has it that 60% of the luxury apartments and mansions sold were owned in anonymity, using pseudonyms or corporate names. All of the sellers requested payment be made in cash and the money not to be wired via financial institutions; the selling of the property was done solely by lawyers and the owners did not show up in the entire transaction process.
After checking the initial purchase records and movements of capital between accounts, it was found that some of the owners who sold their property are public servants or in the rank of senior management in state-owned enterprises.
Allegedly, by mid-December, the CCDI, the General Office of the CPC, and the Organization Department of the CPCCC have already summoned over 120 senior officials currently in office to instruct them to tell their family to stop underselling property and closing bank accounts registered in anonymity or using pseudonym.
The anxiety caused by the apartment issue has eventually become the worries of the Party and the government. The CCDI circular has also listed the counts of recent withdrawal of foreign currency by the family members of middle and high-ranking public officials of Party and government organs in nine provinces and municipalities directly under the Central Government: Tianjin, Jiangsu, Shandong, Shanghai, Zhejiang, Guangdong, Fujian, and Hubei.
Guangdong topped the list with a withdrawal amount of 1.792 billion US dollar; and the lowest was 370 million US dollars. The CCDI circular stated that, according to incomplete statistics, the amount of illegal capital outflow in 2010 was 412 billion US dollars (6.9% of the year's GDP of 5.98 trillion US dollars); in 2011 the number reached 600 billion (8% of the year's GDP of 7.49 trillion US dollars); in 2012, the number was projected to exceed one trillion US dollars (12% of the year's GDP of 8.23 trillion US dollars); in 2013, the scale of illegal capital outflow is expected to reach 1.5 trillion (based on the annual GDP growth rate of 7%, that would approximately be 17% of the year's GDP of 8.8 trillion.)
The worries of the Party and the government are of course not just limited to this. When the officials undersell their apartments, it means they would not become new buyers of real property in future. And this is relevant to the smooth implementation of future economic development plan—the new urbanization project, I would present my analysis of this in a separate article.
Judging from the Economic Observer report on January 18, the CCDI has a fairly accurate understanding of the number of apartments owned by officials across the country. It was several years ago when the MOHURD started the establishment of the information system of individual property ownership in 40 cities. The time that system became publicly available for use was, however, postponed time and again. To this date the list of those 40 cities has still not been announced. Reportedly some of the cities have not yet completed the makeup of the housing history archival data. The reasons for the slow progress are that, apart from the complexity of the data entry work, the project encountered invisible boycott from officials of various regions.
It was said that to ensure smooth progress of the data entry work, MOHURD Minister Jiang Weixin told senior officials across the country that “the housing data of a particular individual would be retrieved only when there is consent from the Municipal Committee Secretary, the Mayor, and personnel from the MOHURD.”
Deputy Minister of the MOHURD once said that “the data collected from ministries, and provincial (regional) government is for statistical, analytical and aggregation purposes only; apart from local inquiry made in accordance with existing relevant provisions, no other inquiry service would be provided.
The government of the Guangdong province promised that the housing data gathered would be for statistical, analytical and aggregation purposes only, inquiry permission would be set in strict accordance with the relevant provisions.
It is precisely because the data has close relevance to the amount of assets owned by officials that a professor doing a research project of individual housing information system said:
Data entry of individual housing information is a risky job. Officials of the relevant department who have higher “political consciousness” would be reluctant to take this “hot potato”.
Regarding the issue of property ownership alone, there is concrete evidence of corruption of officials across the country, and Xi Jinping has repeatedly expressed his determination to crack down on corruption. Now there is only one problem left: to fight corruption or not to fight.
In view of the people's interests, Xi Jinping has to punish these officials because “he came from the people”, a propaganda highlight of the Xinhua News Agency since Xi ascended to the highest position in November 2012.
And the feature article about Xi Jinping was entitled “the people is the spring of our strength”.
But to make the people feel happy would mean great suffering to the Party cadres. If Xi is serious about fighting corruption, like carrying out the campaign pursuant to the provisions laid out by the Criminal Code, then his every move could be startling.
I did a quick check and found that the Article 383 of the Criminal Code stipulates four levels of meting out punishment on corruption. The lightest punishment would be criminal detention for fewer than two years for taking bribes of less than 5000 yuan; the heaviest sentence would be ten years or life imprisonment and confiscation of property for those who took bribes of more than 100,000 yuan. For cases of particular seriousness, the convicts would be punishable by death and the confiscation of property.
If Xi Jinping truly means to rule by law, then the majority of cadres of numerous Party organs and government departments are likely to get the maximum penalty pursuant to the Criminal Codes about corruption. In that case, how would Party offices and the government function?
Therefore, the "best" way is to hold high the banner of "anti-corruption"—otherwise the Party could hardly face the people, and Xi Jinping would be considered untrustworthy—and secretly amend the Criminal Codes, so that the meshes of the “cage” would be both big and wide, say by allowing every official to own 5 to 20 apartments in accordance with their respective ranks and put forward the crime of “illegally obtaining individual housing data” to deter those troublemakers who dare to leak on the Internet information of assets owned by officials.
In so doing, the “anti-corruption campaign” could achieve instantaneous results and end swiftly. If not, Xi's campaign would end up like the alcohol ban imposed by Yuri Andropov, General Secretary of the CPSU—scrapped without any success. However, Andropov managed to hunt down a few “tigers” such as the sons- and brothers-in-law of Brezhnev, his predecessor, former General Secretary of the CPSU in his anti-corruption campaign when he newly assumed office.