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Inside Asia: Corruption and unrest
From Lee Han Shih in Singapore

How corrupted are Chinese officials? Going by a recent report, nearly 75% of the Chinese bureaucracy could be on the take.
Last month, China's auditor general discovered that officials have siphoned off huge sums of money earmarked for the 2008 Beijing Olympics projects. Li Jinhua, in his report to the Standing Committee of the National People's Congress, said he had also unearthed widespread embezzlement by those handling poverty relief funds set aside for farmers.
And there are numerous cases of large-scale tax evasion by state-owned enterprises as well as inefficient building of infrastructural projects (a polite way of saying that money pumped into roads, hospitals and, most worrying of all, work to mitigate the damage wrought by the annual flooding of the Yangtze and the Yellow River are quickly pumped out for private, non-specific uses).
In all, 1.4 billion yuan is missing from last year's budget.
If this sounds like a large sum, it is. In China, where two yuan can buy you a decent meal at a roadside eatery, 1.4 billion yuan goes a long way. What is more alarming is the pervasiveness of corruption shown in Li's report.
Of 55 major departments investigated, 41 (just below 75%) were found guilty of malpractices. "Most of the money… has gone into the hands of staff members or to office building construction," Li said.
This figure of 75% is, of course, based on a single audit and does not necessarily reflect the overall situation. But it is a fair warning on the scale of money-taking among Chinese civil servants.
In fact, things have gone so badly that the Chinese, ever fond of categorising, have identified 15 types of corruption in the public sector. They are:

  • Group work in taking money and blame. This could take the form of group smuggling, corruption or wastage. As everyone covers for everyone else, it is the hardest form of abuse to uncover and stamp out.
  • Running private businesses — mostly bars, karaoke joints, brothels — through relatives and friends. The officials provide protection and early warnings of raids.
  • Taking advantage of legal and administrative loopholes to give friends licences to develop land and run businesses, and buy cars at special rates.
  • "Privatising" public functions: This happens when most of the power in a department or division is held by one or two people, who then use that power to get bribes or rebates, or to misappropriate funds.
  • Buying into a position (say the post of a mayor of a small city for a million yuan), then using the position to make back many times the investment. The usual return is 20 times the initial amount.
  • Monopolistic practices: Using official powers to drive out competitors of your own private business or to take over the competition.
  • Power and sex: A girlfriend or mistress of a high-ranking official starts her own business and uses his power to give it unfair advantages.
  • Carpe diem mode: Seizing the day by taking a large sum, spending it on wine and women, and then disappearing from the scene.
  • Red-and-black mode: The alliance of a public servant (represented by the colour red) and organised crime (black), in controlling resources and transport rights, and collecting protection money.
  • The ugly-patriarch mode: The head of a village or a party cadre takes control of the territory under his control and makes it his private fiefdom. Disobedience is crushed by force, beating and torture.
  • Fall of a rising star: A promising young official who started out with great ideals but has been corrupted by money and power.
  • Middle-age crisis mode: A middle-aged official who has done a good job, risen to a high position and turned bad.
  • The "59" symptom: This refers to civil servants on the verge of retirement (at age 59), who worry that that they will lose all the perks of their job when they step down, and hence start to abuse their position to make money for the future.
  • Transferring public money directly into private pockets. This is the most common form of corruption among Chinese civil servants.
  • Overseas alliance: Teaming up with businessmen from Taiwan, Hong Kong, Singapore and elsewhere to transfer state money to other countries for private use. The massive buying of properties in California by mainlanders is largely financed by this mode.

Corruption is as old as the history of China itself, but it has become so bad in recent years that Zhu Rongji, in his outgoing speech as premier last March, called for a deepening of his famous anti-graft campaign and asked officials to "listen when people complain".
Wen Jiabao, Zhu's protégé and successor, said recently that preventing such abuses is a matter of "life or death" for the ruling party and country. Wen is not exaggerating.
The longer he takes to act, the more corruption will erode economic institutions and leadership credibility, and the more Chinese citizens will believe they will have no recourse for justice. At the moment, their frustration is expressed in limited forms of civil disobedience. If frustration is allowed to grow, large-scale riots and even civil war may erupt. It was by exploiting the corruption of the nationalist party that the communists came to power. Wen is making sure they will not lose it the same way.

Lee Han Shih is a veteran Greater China watcher. 

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