Edward Campbell said:
...
‘Peace, order and good government’ are central to the Communist Party’s understanding of its mandate. As of this week yet another anti-corruption programme has begun and arrests of senior officials have occurred and some political corruption convictions will result in capital punishment. Corruption, in the Chinese, sense does not encompass all the things we understand by that word; Chinese family values – real family values rather than the light weight fluff espoused by e.g. evangelical Christians – mean that some things we would regard as ‘corrupt’ are essential components of business, connections, for example. That being said the Chinese people want and are demanding that laws be applied equally and fairly to all, even to officials and Party members. That will happen, in spades, during the next decade.
...
I want to expand on this point.
The arrest, last week, of Chen Liangyu (former Mayor of Shanghai and, therefore, very senior Communist Party member) is the most public in a process which is multi-pronged (as almost everything is in China). The
message is:
• To foreign investors – China is intent on dealing with political corruption. This is an especially welcome message for North American industry, where laws prohibiting bribes are taken fairly seriously;
• To Chinese politicians – egregious corruption does harm to the
Red Dynasty and is, therefore, going to be punished harshly – if, right now, a bit randomly;
• To the Chinese people – we, the Dynasty, are cleaning our own house to make ourselves worthy of your continued support or, at least, toleration; and
• To the leadership, itself – we are embarked upon Deng Xiaoping’s
new path and we are going to stay the course. It requires reformed public administration and governance. You will adapt … or die.
This is part of a well established process, going back to the detention (conviction without trial) of former Beijing Mayor Chen Xitong and his son and the investigation of Vice-Mayor Wang Baosen which resulted in his suicide. That was part of a process aimed at reassuring Hong Kong, especially and personally Anson Chan, about China’s commitment to reasonably honest public administration. This was vital because she, quite publicly, feared that Chinese corruption would damage Hong Kong’s financial position.
I need to reiterate that
corruption ≠ corruption. I had the occasion this summer, as a guest of a Chinese official, to attend a briefing on development of the Pearl River Delta – Guangdong and area. One speaker, a partner in a major Hong Kong financial concern, told officials, roughly:
“You need to mobilize five key resources –
1. An educated, productive workforce – which the region has,
2. Suitable infrastructure, including civic infrastructure (roads, sewers, etc) and technology – which the regions needs,
3. Capital – which is
readily available,
4. The well known Chinese entrepreneurial spirit – which is re-emerging, and
5.
Connections.”
I could see almost every Euro-American head in room jerk and look to a neighbour to confirm that they had heard correctly. So did the speaker and he continued along these lines:
“Yes, of course, connections. This is China, we can read your corporate reports and balance sheets but they only tell us, hopefully, that you are making money without being convicted of any criminal offences. That’s unlikely to persuade me to go to my management committee and say
‘let’s invest several billion (US) with these people.’ I want, I need to hear from someone I trust that you are an honest, upright company, one which can be a trusted partner in a shared enterprise. Then we can do business together, for our mutual profit.
That means that you cannot, likely, just into the Chinese market in a big way. You need to start with a small joint-venture with a Chinese company. You have to earn our trust. Then you can do another, bigger joint enterprise. Once you are sufficiently ‘Chinese’ we will welcome you into the fold. But even then you, like me and my company, need connections to grow bigger and better, and you need to continually maintain and ‘burnish’ and expand your web of connections. The closer and ‘better’ your connections, the more likely you are to prosper, with them. It has nothing to do with corruption but it has everything to do with trust and the the way we Chinese prefer to do business.”
