Page 50 - 2017 White Paper
P. 50
7 White Paper on the Business Environment in China
What Next started the year with a bang by announcing a revamp of
the Communist Party’s approach to fighting corruption
At this point it appears that the continuing relevance while vowing to continue with the crackdown, the South
of SOEs in China owes more to political influence and China Morning Post reported. “We should revamp the
vested interest than in their ability to successfully structure and institutions and supervision mechanism
compete domestically or even internationally; while the [for fighting corruption]”, CCTV quoted President Xi as
Communist Party’s de-facto control over the enterprises saying when outlining the CCDI’s agenda for 2016 (Huang
themselves may insulate them from significant failures in 2016).
their domestic market, that same control will likely lead
to increasing backlash against China’s overall mandate to At that same address, Bloomberg noted Xinhua
‘go out’ and invest abroad. In other words, the continuing quoting President Xi as saying: “The Communist Party
prosperity of SOEs at home due to practices that, once central leadership’s firm determination to fight corruption
again, “[are] increasingly incompatible with global trade has not changed; the goal of preventing corruption from
regimes and threatening to multinationals” (Browne spreading has not changed”, adding that the president
2012). emphasized that the campaign should continue to “cover
all sectors” in a “zero-tolerance” manner (Ting 2016).
This is just one facet of the overall paradox of
reform in contemporary China: despite a wide-ranging Summing up the campaign’s latest milestone
consensus within and without China that substantive accomplishments during a press briefing at the
political reform is necessary for the long-term relevance conclusion of the September 2016 G20 summit in
of the Communist Party, the short-term consequences Hangzhou, Xinhua reported, President Xi announced that
of that reform—both real and imagined—remain too he had enlisted the cooperation of the G20 members in
unpalatable for much progress to be made. collaborating with China’s anti-corruption and anti-graft
efforts, including the establishment of a research center
In light of the overall situation, it would appear that on fugitive repatriation and asset recovery in China. In
nobody in a position of authority has yet been willing to addition, a G20 2017-2018 anti-corruption action plan
risk halting the flow of lucre that many vested interests had been formulated, President Xi said. “(These) will
in Beijing no doubt enjoy as a result of SOEs’ success-by- leave corrupt officials no place to hide in G20 members’
fiat, even if it would mean an overall healthier national territories and in the world at large”, he said (Xinhua
economy and even as an increasing number of economic 2016b).
measures indicate that China may be on the cusp of
significant economic hardship. At the same time, China Daily reports, the CCDI
revealed its latest progress and results update. According
Strictly pragmatically, the most likely candidates for to the CCDI, 2,020 economic fugitives, including 342
successful investment overseas are not the SOEs that former officials, have been returned to China from more
authorities seem to want to prop up as industry champions, than 70 countries and regions since 2014. In addition, a
but rather smaller—and more independent—enterprises total of 7.62 billion yuan (US$1.14 billion) in illegal assets
which are more likely to evade significant concerns about had been seized. To capture economic fugitives who seek
propriety and transparency. In our opinion, these firms are refuge overseas, the Chinese government had established
also most likely to make significant positive contributions the Central Anti-Corruption Coordination Group, led by
to overseas economies and China’s own. the CCDI, and launched its Sky Net operation. In April
2015, Interpol international arrest warrants for 100
Anti-Corruption Campaign Chinese fugitives. By the end of July 2015, CCDI data
showed that 33 had been returned from 16 countries and
Progress Report regions. Two of the 33 have so far been convicted and
sentenced (Zhang and Cao 2016).
President Xi Jinping’s anti-corruption quest continued
unabated in 2016. In his January 2016 speech addressing All very well and good for President Xi’s administration
the annual meeting of his top discipline watchdog, the in netting these very solid achievements – but we have
Central Commission for Discipline Inspection (CCDI), he to ask the question – in 2016 and onwards, how is the
intensive anti-corruption campaign really affecting
50
What Next started the year with a bang by announcing a revamp of
the Communist Party’s approach to fighting corruption
At this point it appears that the continuing relevance while vowing to continue with the crackdown, the South
of SOEs in China owes more to political influence and China Morning Post reported. “We should revamp the
vested interest than in their ability to successfully structure and institutions and supervision mechanism
compete domestically or even internationally; while the [for fighting corruption]”, CCTV quoted President Xi as
Communist Party’s de-facto control over the enterprises saying when outlining the CCDI’s agenda for 2016 (Huang
themselves may insulate them from significant failures in 2016).
their domestic market, that same control will likely lead
to increasing backlash against China’s overall mandate to At that same address, Bloomberg noted Xinhua
‘go out’ and invest abroad. In other words, the continuing quoting President Xi as saying: “The Communist Party
prosperity of SOEs at home due to practices that, once central leadership’s firm determination to fight corruption
again, “[are] increasingly incompatible with global trade has not changed; the goal of preventing corruption from
regimes and threatening to multinationals” (Browne spreading has not changed”, adding that the president
2012). emphasized that the campaign should continue to “cover
all sectors” in a “zero-tolerance” manner (Ting 2016).
This is just one facet of the overall paradox of
reform in contemporary China: despite a wide-ranging Summing up the campaign’s latest milestone
consensus within and without China that substantive accomplishments during a press briefing at the
political reform is necessary for the long-term relevance conclusion of the September 2016 G20 summit in
of the Communist Party, the short-term consequences Hangzhou, Xinhua reported, President Xi announced that
of that reform—both real and imagined—remain too he had enlisted the cooperation of the G20 members in
unpalatable for much progress to be made. collaborating with China’s anti-corruption and anti-graft
efforts, including the establishment of a research center
In light of the overall situation, it would appear that on fugitive repatriation and asset recovery in China. In
nobody in a position of authority has yet been willing to addition, a G20 2017-2018 anti-corruption action plan
risk halting the flow of lucre that many vested interests had been formulated, President Xi said. “(These) will
in Beijing no doubt enjoy as a result of SOEs’ success-by- leave corrupt officials no place to hide in G20 members’
fiat, even if it would mean an overall healthier national territories and in the world at large”, he said (Xinhua
economy and even as an increasing number of economic 2016b).
measures indicate that China may be on the cusp of
significant economic hardship. At the same time, China Daily reports, the CCDI
revealed its latest progress and results update. According
Strictly pragmatically, the most likely candidates for to the CCDI, 2,020 economic fugitives, including 342
successful investment overseas are not the SOEs that former officials, have been returned to China from more
authorities seem to want to prop up as industry champions, than 70 countries and regions since 2014. In addition, a
but rather smaller—and more independent—enterprises total of 7.62 billion yuan (US$1.14 billion) in illegal assets
which are more likely to evade significant concerns about had been seized. To capture economic fugitives who seek
propriety and transparency. In our opinion, these firms are refuge overseas, the Chinese government had established
also most likely to make significant positive contributions the Central Anti-Corruption Coordination Group, led by
to overseas economies and China’s own. the CCDI, and launched its Sky Net operation. In April
2015, Interpol international arrest warrants for 100
Anti-Corruption Campaign Chinese fugitives. By the end of July 2015, CCDI data
showed that 33 had been returned from 16 countries and
Progress Report regions. Two of the 33 have so far been convicted and
sentenced (Zhang and Cao 2016).
President Xi Jinping’s anti-corruption quest continued
unabated in 2016. In his January 2016 speech addressing All very well and good for President Xi’s administration
the annual meeting of his top discipline watchdog, the in netting these very solid achievements – but we have
Central Commission for Discipline Inspection (CCDI), he to ask the question – in 2016 and onwards, how is the
intensive anti-corruption campaign really affecting
50
