21 November 2012, 11:30

China: ‘corruption embedded in socio-political culture’ – British expert

China: ‘corruption embedded in socio-political culture’ – British expert

After months of waiting and speculation one of the biggest political organizations in the world has a new leadership which will rule the world’s fastest growing economy for the next decade. Dr Christopher Ogden, a leading expert on China from the University of St Andrews, Scotland, gives his comment on the challenges that await the new CCP leader.

In his first speech as party leader Xi Jinping addressed the issue of rampant corruption. Several weeks before the change of power, corruption cases on a wide scale and at the highest level, had caused a shockwave and created much disruption in the social contract that has existed between the Chinese leadership and the middle class.

Dr Ogden believes that “while the new party leader might be able to mend the relationship between Chinese leadership and the middle class and restore people’s confidence in the CCP, but corruption is likely to remain a giagantic problem for China. The more robust the economy gets the greater chances that corruption will flourish. In this sense, corruption can happen everywhere. Indeed, it happens in this state[United Kingdom]. If you are a Member of Parliament[MP], for instance, you can stop being an MP and join a board of directors of a financial corporation, and enjoy certain benefits from your previous service. Admittedly, however, in the developing states the chances of corruption are much higher than in such countries as the UK. Developing states like China are growing and experimenting both economically and socially. In this sense, corruption can be seen as a certain ‘experiment’ of growing economies.

What is rather unique about China is that corruption is to a great extent embedded in the broader socio-political culture of the state. Both social and political relations in China are based upon informal inter-personal connections. This is inherent to China. This is how you do business, how you get your job, maybe even how you get to the university in China. Even in the CCP itself political decisions are often made behind the closed doors. While this particular way of getting ahead with decisions does not equal corruption, this might pose an extra problem for Mr Xi in his anti-corruption endeavors”.

Another issue that came into focus after the change of Chinese leadership last week was what this change will mean for the global balance of power and whether Mr Xi will continue to pursue the policy of peaceful rise. After all, China is now the world's second-largest economy and it has an enormous influence on the global economy and international affairs more generally.

Responding to this concern, Dr Ogden suggested that “it is highly unlikely that the world is going to witness any profound change in Chinese foreign policy. China is a single-party state and whatever its leadership, the CCP’s intentions in both domestic and foreign policies will remain largely unaltered. The CCP wants China to be a great power. They want to pull their population out of poverty for everyone to prosper. They want to modernize and develop. In this context, the key determinant of Chinese policy both at home and abroad is its economic growth. It is the legitimization behind the CCP’s relations with its own people and the foreign states. Therefore, as long as the economy is growing, the change of leadership holds little prospect for any significant alterations in Chinese foreign or domestic policy.

The same logic applies to the policy of peaceful rise. By far, there is no reason for the CCP to change this rhetoric. Admittedly, however, if the economic growth stops, stalls, or reduces to a significant extent, the CCP would have to look for another form of legitimacy as a unifying factor against social unrest and discontent. If this happens, the CCP is very likely to see to the nationalist forces, and this, in turn, might change the idea of China rising peacefully”.

Almost immediately after the new Chinese leadership was named, there has been much discussion over Mr Xi’s background and whether it will influence the choice of policies that he will pursue.

Dr Ogden contends that “given that Mr Xi is a legalist, he might be better placed for social rather than economic reforms. Unfortunately, however, it is not the social reform that has recently called up for changes”.Indeed, there is a growing concern that China needs to shift from manufacturing to innovation and from an investment-driven economy to one that is consumer driven. Such transformation will require significant reforms to China’s state-owned enterprises. The antiquated tax system also needs to be changed, and controls over interest rates that are currently discouraging investment to the entrepreneurial private sector must be removed. However, if Mr Xi is better suited for social reformation, the much-needed economic reforms might have to wait.

Lastly, one might wonder if the change in Chinese leadership is likely to affect Chinese relations will Russia. Dr Ogden suggests that “there is no reason for this relationship to change. China and Russia share the same concerns over a variety of issues. Both states work in partnership within the multi-polar world and promote a more equitable arrangement of the states in the international system. Moreover, the two states are heavily involved in negotiating bilateral trading agreements which will probably bring China and Russia to an even closer relationship”.

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