How bad is corruption in China?
October 27th, 2012
06:03 PM ET

How bad is corruption in China?

By Fareed Zakaria

There was a blockbuster article in the New York Times recently that details the extent of the private wealth amassed by the family of Chinese Premier Wen Jiabao. The story is already creating huge waves in China, and although Chinese authorities have reportedly blocked the paper’s site, the story is still being discussed in a million different, quiet ways.

“A review of corporate and regulatory records indicates that the prime minister’s relative – some of whom, including his wife, have a knack for aggressive deal making – have controlled assets worth $2.7 billion,” The New York Times reported. “In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners.”

What this highlights for me is not that China is especially corrupt, although corruption there is (as elsewhere) a genuine problem. Instead, this report underscores the answer to a question many of us have been wondering over the years: is China somehow largely immune to the kind of corruption that afflicts developing countries?

Certainly, China has often seemed smoothly technocratic compared with the messy, chaotic, highly corrupt reality of India. And there’s still some truth to this observation. Bureaucratic institutions do function better in China, and from what I can tell there is less corruption there than in India in the routine provision of things like licenses and permits.

However, this article underscores that there is extensive corruption in China of a different kind. People that are well-connected – especially the so-called princelings – get favorable treatment in terms of government loans, investment and licenses. And, because of China’s breathtaking growth, such assistance can add up to hundreds of millions of dollars, meaning that the sums involved are more much more massive than the cash in a brown paper bag that would be handed out for a permit elsewhere.

The issue for China is not whether it has a corruption problem – as I have suggested, I would argue that on a day-to-day basis it has less of a problem than nations such as India and Indonesia. Instead, Beijing’s problem is that its closed political system does not have the legitimacy of elections. This could hit the Communist Party hard as it undermines the image the country has of itself as managed by an elite that governs for the greater good, in a highly meritocratic system.

Now, with the revelations about Wen’s family and the case of disgraced politician Bo Xilai, it will be interesting to see how the Chinese handle these disruptions to the narrative moving forward. Given that its leadership does not appear to intend to hold elections, what processes will the Communist Party implement for handling corruption and leadership selection to maintain any semblance of legitimacy?

It will be fascinating to see how the country grapples with this question.

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Topics: China • India

soundoff (146 Responses)
  1. boheh

    I'm from hong kong, those chinese from mainland are so pathatic, their comments simply endorse the crooked regime. I also want to say all guys here are wrong. Wen has very limited power. This was all but framed by Bo xi-lao's gang.

    October 30, 2012 at 8:53 pm | Reply
  2. Hasai

    I suspect the level of corruption in Red China is on a par with the levels of corruption in pretty-much every totalitarian state throughout history: VERY.

    October 30, 2012 at 9:48 pm | Reply
  3. phneutral

    Gee, how many of these comments are being generated by the Chinese Government? Now thats real corruption!

    October 30, 2012 at 10:16 pm | Reply
  4. M Houston

    "what processes will the Communist Party implement for handling corruption and leadership selection to maintain any semblance of legitimacy?"

    Come on Fareed! What "processes"?? Those in the CCP most in danger of being exposed will begin eliminating those
    who threaten them. And those least able to hide their corruption will begin allying themselves with those most capable
    of eliminating "threats" and protecting "friends". The "process" is simply Darwinian survival of the fittest.

    It's too bad that the "process" won't eliminate the CCP or the newly wealthy "business geniuses" whose sole operating
    principle is "greed is GOOD!"

    China is heading for a catastrophe of its own making.

    October 30, 2012 at 10:17 pm | Reply
  5. Breeze

    It's a very good article.However,there are some points I can't agree with.So far as I konw,what's magazines said about Wen's family haven't involed any direct evidence.Maybe some magazine will be sued for defamation of Wen's character. The media should adhere to be objective,that's to say,medias should be responsible.

    October 30, 2012 at 10:21 pm | Reply
  6. Charlie

    The author is wrong about the Bible being easier on the killing of an unborn baby. It is treated the same as a life outside the womb throughout the Bible. The author of this article has a habit of trying to defend his liberal agenda by using argumnets made by different Christians. At any point in time you can find many perspectives from man but the Bible is very clear about the killing of unborn babies ( not fetuses ) and other culturaly sensative issues the writer loves to twist. If you muddy the water it allows you to avoid the truth – but the Bibles position is clear to anyone who reads the Bible without an agenda.

    October 31, 2012 at 2:20 am | Reply
  7. cmmrc

    Who cares about China, or any other countries? They can corrupt anyway they want. Someone please care a little bit for USA! Fareed Zakaria must be paid by China.

    October 31, 2012 at 6:21 am | Reply
  8. more2bits

    Mankind is corrupt and not worthy of inheriting the Earth. Evolution has a long way to go with this species.

    October 31, 2012 at 6:56 am | Reply
  9. nodoubt

    no different than it has always been....and will always be...until there is no more china.

    October 31, 2012 at 7:02 am | Reply
  10. Aaron Lord

    Wow, this is a seriously poorly written article...reads more like the work of an undergrad student than a seasoned reporter..

    October 31, 2012 at 8:23 am | Reply
  11. Citizen KK

    Chi-coms? They are inherently corrupt...just like the Soviets....

    October 31, 2012 at 8:24 am | Reply
  12. sourav

    In the history few years, several of the theme at this pandal have been subject matter like women's empowerment and the human rights and duty of citizens. This year's theme of forthrightness has been bring to life by art director Nilesh Choudhary.

    November 1, 2012 at 1:51 am | Reply
  13. Hef The CHef


    January 31, 2013 at 11:32 am | Reply
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    June 22, 2013 at 9:23 pm | Reply
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    June 25, 2013 at 7:04 pm | Reply


    October 7, 2013 at 11:08 pm | Reply
  17. In Home Personal Training

    No there's no corruption!:) "The prime minister’s relative – some of whom, including his wife, have a knack for aggressive deal making – have controlled assets worth $2.7 billion" Clearly the family has connections good and bad.

    April 14, 2014 at 9:32 pm | Reply
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