China’s anti-corruption campaign is what it is
Asia Unhedged thinks some western analysts harbor an unnecessarily cynical view of China’s ongoing anti-corruption campaign. The belief in some quarters is that it’s a sham effort by President Xi Jinping to eliminate political opponents.
While a few of Xi’s enemies may have indeed gone into the mix (doesn’t this sort of thing happen in the West too?), it’s more accurate to take the Communist Party’s growing anti-corruption campaign at face value. Next to overpopulation and political instability, corruption is China’s greatest curse. It’s toppled dynasties and leveled otherwise thriving economies throughout history. So Beijing’s efforts to nab corrupt officials and businessmen is likely a good thing for financial markets and investment.
Chinese officials are going after these criminals with a vengeance. China’s Interpol office on Wednesday released a list of 100 wanted economic fugitives, according to Reuters. This is the latest move in the “Sky Net” initiative launched last month against suspected corrupt officials who have fled overseas. Sky Net wants to bring them to justice and recover the stolen assets.
Published on the website of the Central Commission for Discipline Inspection, the party’s anti-corruption watchdog, the majority of the list contains the names of mid-level officials and company executives. “Via Interpol and other channels, China has requested law enforcement organs in related countries to strengthen cooperation and help bring these suspects back to justice,” said the website, according to Reuters. The list showed the suspects’ photographs, visa numbers, possible flight destinations and the crimes they were accused of committing.
Xi is getting on the right side of popular opinion in China with his anti-corruption drive. Next to industrial pollution, the hot-button issue with most Chinese concerns corruption, whether it involves bribery, theft, favoritism or other abuses by government, party or business figures and their families.
Given the large numbers of U.S. investors who have been burned by phony book keeping and other irregularties during the scandal over U.S.-listed Chinese stocks, foreigners should view China’s current anti-corruption Jihad as a positive. This is especially true after you add up all the dirty money that’s been removed from China.
The Washington-based Global Financial Integrity group, a non-profit organization that analyzes illicit financial flows, estimates that about $2.83 trillion flowed illegally out of China from 2005 to 2011.