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    Greater China
     Jun 6, 2012


SUN WUKONG
Corruption is still wild and divisive
By Wu Zhong

HONG KONG - The student-led street demonstrations in Beijing in the spring of 1989, symbolized by the occupation of the Tiananmen Square and the bloody military crackdown on June 4, are generally labeled as a "pro-democracy movement". However, the fundamental cause of protest was public anger over skyrocketing inflation and what may now be called the "sprouts" of official corruption.

The outrage was very understandable. The late 1980s were just several years after Deng Xiaoping started capitalist-style reform and opening up of the economy. It was a time when, for most of the country's adult population, "inflation" and "corruption" were still alien things. Not long before, they had lived in a society

 

basically free of inflation and corruption under the rule of Mao Zedong.

To turn a socialist planned economy into a free-wheeling market-oriented one, the removal of state controls on prices was inevitable. So by the mid-'80s, the Chinese Communist Party (CCP) and government started to pilot a reform to ease price controls. China was still suffering a serious shortage of consumer goods. So when the government moved, prices began to shoot in accordance with the law of supply and demand.

The official figure of inflation in 1988-89 was about 35%, and probably failed to tell the whole story. In any case, people became panicky, seeing their savings shrink in value day by day. The older ones were reminded of the "big inflation" in 1948-49, when the tumbling value of the money in their pockets helped the CCP drive the then ruling Kuomintang out of the mainland. Their fears spurred panic buying sprees across the country in 1988. People poured into shops to buy anything they could grab, regardless of whether they actually needed what they were buying or not.

Adding to their anger was that some people, particularly children of senior officials, were taking advantage of the shortage of supply to make profits. They used the influence and connections of their parents to buy in consumer goods that were in great demand and in short supply, such as color TV sets and refrigerators, and resell them for handsome profits. People accused them of exacerbating inflation and making the lives of ordinary citizens even more miserable. Such activity was called "official profiteering", and it was this that marked the first widespread recognition of official corruption.

The sudden death on April 15, 1989, of liberal-minded former general secretary of CCP Hu Yaobang, who was sacked by Deng two years earlier for his tolerance toward "bourgeois liberalization" or Western ideas, triggered the eruption of public discontent. At first, some students spontaneously went to mourn Hu at Tiananmen Square. Then they took to the streets with demands for greater freedom and a crackdown on "official profiteering". They were soon joined by people from various sectors including party and government officials. Without boiling public anger with inflation and corruption, the protests started by students could hardly have won such popular support.

The CCP, having successfully broken up the protests with military forces on June 4, also learned a bitter lesson. In present Premier Wen Jiabao's words, inflation is like a tiger which must be kept inside a cage. If it is let out, it will bite people. And inflation combined with corruption could cause the collapse of a government. In other words, the CCP sees inflation and corruption as its two deadly enemies.

In any case, since the June 4 bloody Tiananmen crackdown, Beijing has always been carefully on guard against inflation and stepped up efforts to fight against official corruption.

The government has been quite successful in keeping inflation in check over past two decades or so. At the same time, with the country increasingly being run as a free-wheeling market economy, people have become more used to price fluctuations. More importantly, with more money in their purses nowadays, mild inflation worries them less.

But Beijing's crackdown on official corruption in past two decades can be said to be a failure. Compared with any type of corruption today, "official profiteering" pales into insignificance. Corruption seems to have spread to every corner and all levels of officialdom, including the politburo at the top. The amount of dirty money involved in a single case nowadays tends to be astronomical.

That the CCP could be more successful in keeping inflation at bay is perhaps because this is an enemy from outside, which is easier to identify and defeat without mercy. But official corruption is an enemy inside the body of the CCP itself and so i more difficult to deal with. As many have pointed out, without political reforms to enhance public supervision, the CCP itself can never really win the battle against official corruption.

Nevertheless, Global Times, a sister publication of the People's Daily - CCP's flagship newspaper - has tried to justify the failure in the battle against corruption. In an editorial on May 29, it said:
China obviously is in a season with a high-incidence of corruption, as conditions to completely root out corruption are not ripe. Some people say that with "democracy" the problem of corruption could be easily solved. This view is naive. There are many "democratic countries" in Asia such as Indonesia, the Philippines and India, where corruption is much more serious than in China ...

In no country can corruption be rooted out completely. The crux of the matter is to control it within the extent of public tolerance.

To give huge pay raises to officials, public opinion won't accept. Our system does not allow retired officials to make use of their influence and connections to make big money. Let tycoons work as officials, people would feel "strange". Chinese officials' statutory salaries are very low, so that some local officials have to seek welfares through "hidden rules" (meaning taking bribes).

"Hidden rules" nowadays seem to somehow prevail in Chinese society. Even practitioners in public sectors such as medical doctors and teachers also have their "hidden rules". Many people's statutory salaries are not high, but they have "grey (illicit) incomes".

Supervision of public opinion must be strengthened ... But the public must also rationally understand the reality and objectivity that corruption cannot be completely removed in China at the current stage ... [1]
I quote the Global Times editorial at length here because it speaks for itself. No further comment is really needed other than that it tries hard to justify official corruption as long as the evil is still "within the extent of public tolerance". In other words, officials can continue to take bribes as long as there is no massive protest or rebellion.

But the lesson from 1989 is still very fresh. No wonder the article immediately causes a big uproar in China. In an unusual move, even some other state-run media outlet such as China Youth Daily and even Xinhua News Agency turned on Global Times with signed commentaries criticizing the newspaper.

The Chinese edition of Global Times was launched in 1993, and an English version was started in 2009 as a new media outlet to project China's "soft power" internationally and domestically. However, its often hardline rhetoric on current international issues proves counterproductive. Now with an editorial to justifying corruption, the newspaper further hurt its own image.

Note: 1. Click here for full text (in Chinese).

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