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Source: China Daily China Daily

Anti-corruption efforts may help change business environment

Published: 25 Feb 2015 01:21:18 PST

Anti-corruption efforts may help change business environment China is at an odd time (or call it "the new normal"), when GDP growth is no longer seen as the single most important criteria in measuring an official's performance.

That's now being measured by a person's political and ethical integrity.

In 2015, perhaps the biggest challenge to every local economy will not be how much new investment and how many new building projects it can have, but whether its leaders can continue holding their office without being summoned by anti-corruption investigators and inspectors representing the central government.

Last year offered enough lessons. Just look at how many officials have failed to defend themselves. Up to now, as the official People's Daily reported, 17 city or county-level bosses have lost their office in Shanxi province, for instance.

During the second half of 2014, Shanxi was in the eye of what the Chinese-language press called the anti-corruption "storm", thanks to its intricate old-boy network with once powerful central government connections, most notably Ling Jihua, former director of the Communist Party of China Central Secretariat. The authorities announced recently that Ling was under investigation for alleged disciplinary violations.

Having seen so many officials deposed on corruption and other criminal charges, even the usually cynical Beijing taxi drivers can tell that President Xi Jinping is serious about his anti-corruption campaign.

Overseas business people based in the Chinese mainland, too, will have to adapt to the political "new normal" with a new set of skills: learning how to deal with officials and local politics in different ways.

There is little doubt the anti-corruption storm will continue in 2015, swirling from one province to another. Few local officials are likely to dare to risk their careers dining or having fun with business friends, in facilities with either open access or restricted membership. Invitations to this sort of occasion will no longer work, even with a red packet attached.

A much more preferred, and certainly potentially much less threatening way to approach a local official will be to simply pay a visit to his office and enquire openly about the feasibility of your plan, preferably with his assistants present.

Once the business talk is over, the meeting will be too-no need to invite the official for a banquet afterwards, while previously, such an offer would be a necessary gesture showing the visitor's understanding of "public-private partnership with Chinese characteristics".

In the central government's code of behavior for all officials, going to lavish banquets and luxury clubs is among the things that are strictly banned. But in places that are still in the process of a leadership reshuffle, like Shanxi, fixing a meeting with the local government head would be difficult, as well as fruitless.

One business practice among low-ranking bureaucrats, which is not easily done away with even within an anti corruption campaign, is the self-preservation tactic of just ceasing to perform their daily services, whatever they are.

From data provided by the energy-rich province it is clear that Shanxi's economy is paying a high price for its past excesses, or as President Xi Jinping has called it, their "cave-in style" of official corruption that interrupts the normal functioning of government.

Shanxi is an especially bad example. In the first three quarters of the year, its actual GDP grew 6.1 percent, ranking it third from the bottom among all mainland provinces. Prior to the leadership change, its annual growth target was set to be an ambitious 9 percent.

There is a big difference between getting rid of a few corrupt officials and making an entire team learn how to play under entirely different rules, and removing just one inadequate leader and finding an adequate, not just mediocre, replacement.

In Shanxi, it will probably take a whole year for the central government to build a new leadership structure across both provincial and county levels, run by individuals who are not only politically trustworthy, but economically capable.

The author is editor-at-large of China Daily.

 

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