Scale Of Corruption In China May Be Bigger Than India's, But There Is One Major Difference

An excerpt from 'India’s China Challenge' by Ananth Krishnan.
Prime Minister Narendra Modi and Chinese President Xi Jinping on September 4, 2017 in Xiamen, China. 
Prime Minister Narendra Modi and Chinese President Xi Jinping on September 4, 2017 in Xiamen, China. 

I have often thought of how corruption in China compared with that in India. In two very different societies with different political systems, a common cancer proliferated. Considering the opacity that still shrouds the political elite in China, and the larger size of its economy, the world’s second largest, it is likely that the scale of corruption there dwarfs India’s. Chinese authorities have themselves estimated that as much as 800 billion yuan (Rs 8 lakh crore) may have been taken out of the country as ill-gotten wealth. The Rs 4,479 crore supposedly stashed by 339 Indians in Swiss banks pales in comparison.

There are far fewer checks and balances in China, especially in the still murky state-run sector, where the lines between Party, politics and business are blurred. Zhou Yongkang was a case in point: he leveraged his political connections to amass wealth in one of the most lucrative state-dominated areas of the economy – the petroleum industry. And he was by no means an exception.

As an outsider, I didn’t often get a glimpse of this hidden world of wealth, but on the rare occasions that I did, my jaw would drop. I would hear many stories from a friend who worked in helping high net-worth Chinese emigrate to the US, Canada and Australia. He told me his main business wasn’t in Beijing, Shanghai or Guangzhou, but in small towns in Hebei or Jiangxi one may have never heard of. In these places, local-level officials or well-connected businessmen had rapidly amassed fortunes – mining was one common source, while real estate millionaires were ubiquitous – and wanted to get their fortunes out of China just as rapidly, and move their families abroad. Such emigration was common even prior to Xi’s ascension – a reflection of the confidence of Chinese elites in their political and legal system. The arrival of Xi, and the subsequent crackdown on corruption, only hastened such plans.

One such small-town businessman became an unlikely acquaintance, introduced to me by a common friend. He had made a fortune as one of the biggest real estate players in Beidaihe, a seaside town east of Beijing off the Bohai Sea that’s famous as a getaway for the Party elite. I won’t forget in a hurry the evening we first met.

Our common friend sent me the address of a restaurant I hadn’t heard of, somewhere in north Beijing, near the Bird’s Nest stadium. I entered a private room to see my new acquaintance stacking bottle upon bottle of some of the most expensive and hard-to-find Chinese Moutai liquor from Guizhou. I didn’t have the heart to tell my host that I preferred to not eat meat as dish upon dish was wheeled in, but I had to draw the line when a massive sea cucumber was placed right in front of me. ‘Do you not like to eat it?’ he asked. As I stammered, my friend nudged me and said this was by far the most expensive item on the menu. Left with no choice, I had to eat the whole thing, piece by piece. Washing it down with 60 per cent strong alcohol didn’t help.

Once dinner was over, we were driven to the villa of a fairly well-known artist who lived close by. The Beidaihe tycoon wasn’t wasting a minute of his Beijing visit and wanted to go back with a new painting to add to his collection. It must have been past midnight – after much of the liquor collection had been consumed – when we showed up at the artist’s house, who seemed to have just rolled out of bed. He led us down to his basement and showed us some of what was on offer, laid out on a table.

My friend, however, had his eye on a painting that was up on the wall, already framed. That wasn’t for sale, he was told. ‘I’ll pay what you want!’ he insisted, offering an extraordinary amount, before proceeding to grab the painting and smash it on the ground.

He extracted the canvas from the debris, rolled it up under his arm, and coolly walked out of the door.

That the scale of graft in China dwarfs that in India is no reason for us to feel sanguine. Corruption in the two countries is, in some sense, two different beasts. In the decade I spent in China, I noticed that corruption is far less of an everyday problem. One reason that the Party – despite the prevalence of so many corrupt officials at the top – still enjoys widespread legitimacy is that it has ensured the efficient (and usually painless) delivery of basic services. Whether it’s getting your electricity connection or gas supply or driver’s license, the system generally works (and without extra banknotes to move things along).

As the Party-run newspaper Global Times once observed of corruption in the two countries, ‘The game is the same, only the rules are different.’ A Chinese engineer based in India put it succinctly to the paper: ’In India, people are more blatant about asking for a bribe. They will tell you to your face how much it will take to get a license stamped. In China, things are more subtle – you have to guess what’s required.’ Or to borrow from Xi’s vocabulary, in China, the tigers may be much fiercer (and far wealthier), but in India, the flies are overwhelming. And for the man on the street, flies tend to be a far greater nuisance than the tigers you’ll probably never have to encounter.

Excerpted with permission from India’s China Challenge by Ananth Krishnan, HarperCollins India.