Communal Corruption in China

Tyler Cowen reported an interesting statistic today in his blog.

“Chinese academics have estimated that government officials spend about 500 billion yuan ($73 billion) in public funds each year on official banquets, nearly one-third of the nation’s expenses on dining out.”

Of course, this probably isn’t that surprising to Chinese people. I suspect one reason the figure is so high is because “officials” can be a pretty broad term, that likely encompasses many, many levels of government service (unfortunately I can’t find a citation of the original source). In a communist system, a factory manager in a state-run company, or head of a local agricultural collective are de facto public employees. It should also be unsurprising given that basic salaries for these officials are so low, and public employees and civil servants already rely on other perks such as heavily-subsidized housing to supplement their wages and create a higher real income, leaving less incentive to petition for an increase in earning and reform a currently lucrative system.

There’s an expression in Chinese: “you quan jiu you qian”. It translates roughly to “to have power is to have money”. So despite a communist ideology preaching equality (or at least some parity) of personal wealth, officials routinely use the resources and connections of their department for personal ends — drivers/the company car, dinners, free opera tickets, dinners, gifts, etc. On one hand I imagine Western/American politicians are a bit better, and certainly with much less cultural acceptance. On the other hand I’m reminded of the great BBC comedy series Yes, Minister (and Yes, Prime Minister), where a running joke was the power, corruption, and extravagance of the UK’s Civil Service…

My own limited experience has only confirmed this Chinese corruption phenomenon. When I vacationed in China in middle school, a relative (some medium/high-ranking official in the city health department) commissioned her company driver to take us out for an overnight “camping trip” in the mountains. The car, the whole lamb and other provisions we purchased, the use of the driver, the rental of the massive Uighur ger, and the hiring of the Uighur guides/helpers were all expensed to her department. My dad recently returned from a month-long business trip in China and told us that he had spent a total of 80 yuan ($11) during his entire stay — the rest was reimbursed or paid for.

There are signs, however, that public opinion in China is turning against the banality of corruption in government, perhaps because more of the economy and employment is being shifted to the private sector. The Chinese government recently found $1.5 billion of public funds held by officials for private use in a recent crackdown, and seems willing to hand out death sentences for these cases of embezzlement. Last year China cracked down on officials drinking during lunch on the public dime, and sent around inspectors to administer surprise breathalyzer exams in government offices with the power to fire those who were found to have been drinking. It remains to be seen whether it will crack down on the ‘soft’, quasi-legal corruption of expensing official banquets and the like.

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3 thoughts on “Communal Corruption in China

  1. “You quan jiu you qian”, huh? What crazy concepts you Chinese have invented — I wonder if the West will ever experience a phenomenon like that.

    In any case, I have to imagine that a growing middle-class, with access to information technology, will eventually demand that some of the corruption be reigned in. It’s hard to imagine corruption on that scale being tolerated, even with the efforts the PRC undertakes to quash dissent. Perhaps latent resentment will boil over when the remarkable Chinese economic growth engine stalls a little bit. Either that, or they’ll have to substantially increase the guest-lists at these feasts.

    • I may have failed to communicate some of the nuance, or perhaps I messed up the translation. It’s supposed to convey an added idea that the Chinese culture values influence/rank over pure wealth; not only is influence intrinsically more broadly powerful, anything you can obtain with money (in this case cars, dinners, etc.) you can obtain with influence. There’s also a concept called “guanxi” (“connections”) in China for which favors may be performed in some reciprocal relationship, but where money might fail to achieve any effect, or the money required would be absolutely prohibitive. In contrast, I think the U.S. culture is much more concerned with money and the idea that you can buy anything with money (except/even love).

      I agree that there will be more calls to curb corruption in the future. Perhaps the Chinese government can allow private individuals to “buy-in” to government-sponsored dinners, or create a cost-neutral “public option” meal plan…

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