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08/09/2007 | China - Corruption and Centralization

Stratfor Staff

China has taken another step to centralize its domestic grip with the creation of a National Corruption Prevention Agency. The difference between this watchdog and Beijing's previous efforts is that the new agency will answer directly to the State Council -- not to multiple local governments notorious for their often shady dealings.

 

Should it not instantly become mired in bureaucracy or corruption itself, the new entity's independence, flexibility and strength of mandate signal that the "Shanghai crackdown" model is about to be expanded, and with maximum central control.


Seven months after plans were first announced, Beijing established the National Corruption Prevention Agency (NCPA) on Sept. 7 with the appointment of new Supervision Ministry head Ma Wen, formerly the deputy secretary of China's Central Commission for Discipline Inspection (CCDI).

With the new agency, Beijing has taken one more step in centralizing its grip over anti-corruption activities at home.

Though multiple Chinese anti-graft bureaus already exist, traditionally they have been under implicit local government direction -- the level of Chinese government at which corruption runs most rampant. This new corruption-busting agency is part of the Ministry of Supervision, answering directly to the State Council. The fate of the old anti-graft bureaus overseen by the CCDI has not yet been clarified. The powers the NCPA wields, enhanced by its immunity from local government interference, and the flexibility with which it can maneuver should in theory give it more impact.

Since 1978, the CCDI has been the first agency to deal with allegations of corruption. Only after an official has been investigated and found guilty by a CCDI commission can the Politburo decide whether the official deserves prosecution.

This system was established to shield elite central government officials from any risk of exposure. As time passed, the CCDI cascaded into multiple levels of anti-graft bureaus scattered throughout the political hierarchy, becoming a shield even local officials could use. Many local government officials, some of whom were affiliated with prosecutors' offices, assumed indirect influence over CCDI commissions.

The country's economic opening in the 1980s freed local governments from the watchful gaze of central government monitors. But as China grew richer with the burst of local government-driven entrepreneurial activity, local government corruption also grew in breadth, scope and gravity. Corruption has since spread virtually unchecked throughout the Chinese political bureaucracy.

In recent years, the unsustainability of this trend has become increasingly clear. Rural and urban social unrest has ballooned, caused by corrupt local government actions, such as illegal land seizures or failure to prevent excessive pollution by local government-owned businesses. Riots induced by popular anger against corrupt local government officials has also increased. Facing a population increasingly disillusioned with Deng Xiaoping's aphorism, "To get rich is glorious," the central government consequently turned to local government corruption to direct public discontent away from the Communist Party of China (CPC) and to harness the discontent as a tool of discipline against disobedient local government officials.

The purge of Shanghai's political elite for corruption in September 2006 was a milestone in this respect. The CPC chief in Shanghai, an enormously powerful individual, was removed over a pension scheme-related scandal in a very public downfall. The anti-graft audits for this showcase were veiled in secrecy, and kept well away from CCDI operations. Officials from this once financially and politically powerful city continue to be purged, with Shanghai being used as a showcase to warn all other would-be disobedient local government officials.

The NCPA enables Beijing to leapfrog over the CCDI as "first responder," giving the State Council a first crack at identifying who should be flagged and pinned down for anti-corruption investigations and prosecution. Nothing has been said about dismantling the existing CCDI networks, stretching throughout the national political system, but Ma's former CCDI tenure means that the NCPA will not be kept in the dark. This is just as well, since dissolving the pre-existing structure would rock the boat, potentially sending local targets that Beijing has already identified into hiding.

With the CPC Congress scheduled for Oct. 19 and the 2008 Olympics just around the corner, the pace at which Beijing consolidates top-down controls across China's scattered spectrum of local government and law enforcement agencies is set to increase. Armed with this new agency, it appears Beijing has no intention of slowing down any time soon.

Stratfor (Estados Unidos)

 


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