Exactly how much have officials swindled out of China?

By Qian Gang — Admonishing tones have hung in the air this month over the issue of anti-corruption in China. One factor driving the coverage, and the speculation, is apparently intensified activity at the Central Commission for Discipline Inspection (CCDI), the body charged with pursuing corruption within the ranks of the Chinese Communist Party.

The 17th Session of the CCDI held its fourth general meeting in September last year, emphasizing the need to “exert great pressure to punish corruption.” Just last week, the CCDI held its fifth general meeting, at which President Hu Jintao (胡锦涛) reiterated the importance of “recognizing the long-term, complex and arduous nature of the struggle against corruption.”

As some have noted, it is highly unusual to see China’s top anti-corruption body holding two general meetings so close together.

But the anti-corruption buzz has also been fueled by news headlines with eye-grabbing figures about capital flows out of China as corrupt officials flee the not-so-long arm of discipline inspectors.

A report run on various major Websites on January 10 and 11 bore the headline: “4,000 corrupt officials have fled our nation with an estimated 100 million yuan each in the last 30 years.” [Another link HERE].

According to some reports, these figures were given by CCDI deputy secretary Li Yufu (李玉赋) at a recent press briefing.

When I saw these figures being tossed around, I was quite surprised. It wasn’t the enormous figure given for embezzled assets that took me aback, but rather the frankness with which the figure had apparently been shared by a senior CCDI official.

When I followed up on Li’s statement in news coverage about the press briefing, however, I could not find any mention of the figure, and it quickly became clear that basic blunders had multiplied through the news media.

The CCDI held two press briefings recently, on January 7 and 8, and there were two official news releases, which can be found HERE and HERE.

When Beijing’s Legal Mirror used information from the press briefings in a January 9 report, the newspaper added its own background information:

Media have reported openly before that in the last 30 years, about 4,000 corrupt officials have fled overseas, taking with them roughly 50 billion US dollars, for an average of 100 million yuan each.

The Legal Mirror reporter made it quite plain that “the above figures come from a research report issued by the Ministry of Commerce.

This suggests, of course, that the figures given in recent reports about the theft of funds by corrupt officials have no relationship at all to recent information given in press briefings by the CCDI.

Searching on, I found that the Ministry of Commerce did indeed produce a report in which they said that “officials fleeing overseas numbered around 4,000, and had taken an average of 100 million yuan each.” But this report was made back in 2004.

Written by Mei Xinyu (梅新育) and others at the Ministry of Commerce, the research report was called, “A Study On the Problem of Cross-Border Asset Flows Between China and Offshore Financial Centers” (中国与离岸金融中心跨境资本流动问题研究).

The figures on asset embezzlement originated with the 2004 report.

In August 2004, Guangzhou’s Yangcheng Evening News, Wuhan’s Changjiang Daily and other media reported the news that “the Ministry of Commerce had revealed that 4,000 corrupt officials had embezzled 50 billion US dollars overseas.” Guangzhou’s 21st Century Business Weekly revealed that the Ministry of Commerce research project had begun in early 2003, and was completed in early 2004.

Premier Wen Jiabao had reportedly added his written instructions to the report, demanding that more be done to prevent the flight of capital in the hands of corrupt cadres.

These figures from the Ministry of Commerce were used by media a number of times in the intervening years. On December 10, 2009, a report at Shanxi News Online, “Getting ‘naked officials’ out in the light of day,” used the figures, and said that a number of officials had dispatched family members and assets overseas, remaining in China to hold official posts.

According to the Shanxi News Online report, these officials were referred to in popular jargon as “naked officials” (裸体做官). A number of “naked officials” reportedly had visas and green cards at the ready, so that all would be prepared when there was lightning on the horizon.

As it turns out, the news everyone has dwelt on recently about “corrupt officials running off with 50 billion US dollars” is a figure already more than six years old. That means, of course, that these figures are in need of serious updating, and there is no question they should be revised upwards.

In the past six years, there has been a meteoric rise in crony capitalism in China. Corrupt officials are driven by a more powerful engine now than ever before.

According to figures released by the CCDI, between January and November 2009, discipline inspection authorities in various regions took disciplinary action against more than 100,000 people, with reported cases increasing 4.7 percent, cases pursued increasing 4.5 percent, and cases resulting in punishment going up 2.5 percent.

The number of cadres disciplined for accepting bribes in excess of one million yuan was up 19.2 percent.

This case of recent news coverage on anti-corruption is a memorable and though-provoking one. There is not necessarily anything wrong with taking old figures and using them as background in a news story. It is certainly wrong, as some media did, to take these figures and present them as recent numbers from the CCDI, or to suggest they are figures “for the last 30 years.”

But the real problem here is not fabrication of the news, nor is it inflation or exaggeration. On the contrary, the problem is that not enough was actually made of the figures.

The degree of attention these old figures garnered from the media and from readers across the country tells us that there is a need for much greater transparency on the part of the government. But the CCDI has never formally released figures on capital flows out of China a a result of official corruption. As one Southern Metropolis Daily editorial pointed out back in November 2006, we really can’t say for sure just how much money has been whisked away by corrupt officials.

The general population in China faces numbers like this with a numb fury. As these old Ministry of Commerce figures were breathed with new life this year, the point was not really the figures themselves, but the opportunity they offered for the public and the media to vent their frustrations.

If you trolled through the comments left in the wake of the news stories at major Web portals, it was quite clear that these were being purged by Internet authorities. But there were still traces of appropriate anger in a few responses. “Hasn’t anyone reported these figures to the Guinness Book of World Records? Aren’t we usually really eager to rank first in the world at things?” wrote one netizen. “Why aren’t there corrupt American officials fleeing to China?” another asked wryly.

And a precious few hit closer to the center of the target: “Who created the conditions for them to run off with all that money? It’s this [political] system, that’s what!”

Certainly, it is unusual for the CCDI to hold two general meetings in the space of three months.

Some press reports noted that in his speech to the second CCDI meeting, President Hu Jintao employed the word “system” some fifty times. To combat corruption, he said, “[We] must focus on establishing and improving various systems of punishment and prevention, with the powers of restraint and monitoring at the core.”

But when I studied and compared the pair of bulletins coming out of these two general meetings of China’s top anti-corruption body, it became clear to me that there were no new ideas whatsoever. There was no mention at all, for example, of the need for “declaration of assets by government officials” (官员财产申报).

If the rumblings surrounding these meetings are what passes for boldness and vigor at the senior levels of power, there seems little doubt that yet more corrupt officials will challenge the commission’s authority in the future and ride off into the sunset with China’s riches.

[Posted By David Bandurski, January 18, 2009, 10:03am HK]

[Frontpage image by cbcastro available at Flickr.com under Creative Commons license.]

3 Comments to “Exactly how much have officials swindled out of China?”

  1. [...] full article, please access here         Admonishing tones have hung in the air this [...]

  2. David says:

    Micah:

    Thank you for your wry observation.

    You’ve passed the 五毛党 think test, and your certificate will be sent directly to your confidential Gmail address.

    Best,
    David

  3. Micah Sittig says:

    > The degree of attention these old figures garnered from the media and from
    > readers across the country tells us that there is a need for much greater
    > transparency on the part of the government.

    Nah, it tell us that public opinion needs to be molded to care less about facts and figures, and more about being patriotic and harmonious.

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