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A comparative study of administrative corruption in ancient and modern China

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A comparative study of administrative corruption in ancient and modern China

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A COMPARATIVE STUDY OF ADMINISTRATIVE CORRUPTION
IN ANCIENT AND MODERN CHINA

by

Jia Ming Miao

_________________________________________________________________

A Dissertation Presented to the
FACULTY OF THE USC GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PHILOSOPHY
(POLICY, PLANNING, and DEVELOPMENT)

December 2010

Copyright 2010 Jia Ming Miao
DEDICATION

To my parents, and to BB!
ii
ACKNOWLEDGMENTS

I would like to sincerely and gratefully thank my advisor, Prof. Gerald
Caiden, for his guidance, patience, understanding, and above all, his mentorship. I
would also like to thank Prof. Shui Yan Tang and Prof. Baizhu Chen for their faith in
me, which have been so instrumental in helping me endure and survive the
experience as a PhD candidate who meanwhile has a full time job.
I must also thank Ms. June Muranaka for her assistance and help in enabling
me to have all my paperwork done properly and on time from across the Atlantic
Ocean.
I thank my parents and family. Their unyielding support, unending
encouragement, and unwavering love were undeniably the bedrock upon which my
life has been built.
I would like to thank my editor, Dr. Shantanu Duttaahmed and a fellow
Trojan, for his professional assistance.
Finally, and most importantly, I thank the University of Southern California
for the investment they made in me. It is a privilege to be part of the Trojan Family,
and I am very proud to be a member.
iii
TABLE OF CONTENTS

Dedication ii
Acknowledgments iii
List of Tables v
Abstract vi
Chapter One: Introduction 1
Chapter Two: Corruption: Definition, Classification, and Phenomena 7
Chapter Three: Phenomena of Systemic Corruption in China 17
Chapter Four: Corruption in Pre-Modern China 43
Chapter Five: Corruption in Contemporary China 97
Chapter Six: Concluding Thoughts 140
References 157
iv
LIST OF TABLES

Table 1: Imperial Officials in Chinese History (Jian 1962, 102) 56
Table 2: The Distribution of Officials in the Provinces (Finer 1997, 1149) 57
Table 3: Symptoms of Power Distance (Hofstede 1991, 37) 72
v
ABSTRACT

The aim of this dissertation is to examine systemic corruption in relation to
ancient and contemporary Chinese regimes in which corruption has been prevalent.
The focus is on an examination of how corruption arises in regimes, how corruption
has become systemic and entrenched in the Chinese society, and to what extent
corruption helps and hurts the regime.
Most of the existing research either turns study of corruption in China into a
blanket criticism of the regime, or tends to focus on officials’ behaviors rather than
the regime and the system, or to blame corruption on the Chinese culture without a
careful analysis of to what extent culture conditions corruption and why the Chinese
culture is what it is.
The author notices that corruption in contemporary China resembles, and to
some extent revives and/or continues corrupt practices in China’s imperial era, and
that corruptions in both pre-modern and contemporary eras are systemic rather than
individualized problems.
This study examines corruption in pre-modern and contemporary China
through the goals of the regimes, the officialdoms, the corrupt practices, the
ideological, institutional, and power structure of the regimes, and corruption’s impact
upon the goals of the regimes, especially their survival, stability, and security.
Corruption in China should be studied as a systemic problem with reference to the
regime’s goals, basic power structure, and functioning. The author concludes that in
vi
vii
a highly authoritarian society like China, corruption is closely related to the ideology
and institutions chosen by the regimes to ensure the regimes’ survival, security, and
stability. Furthermore, while regimes struggle to keep corruption under control,
nevertheless, corruption is often tolerated or utilized by the regimes to serve their
purposes. Corruption is indeed a vice and has many negative impacts upon a given
society, such as wasting public resources, corrupting public morality, sabotaging
government procedures and policies, distorting justice, perpetuating inequality,
fueling public discontent, undermining the legitimacy of a regime, and so on. There
is no justification for corruption from a moral stand point. However, despite its
inherent evilness, corruption, if observed from a functional perspective, has played a
functional role in both the traditional and contemporary China with respect to the
regimes’ survival, security, and stability. It is in the process of understanding
corruption’s functional relation with the regime that we can better understand how
corruption itself becomes systemic.

CHAPTER ONE
INTRODUCTION

Corruption is considered a major challenge facing the People’s Republic of
China. Hu Jingtao, the President of the Chinese Communist Party, called corruption
an issue concerning “people’s support for the party and the party’s life or death” (Hu
2007). As many high-ranking officials are found guilty of large scale corruption, and
a lot more local officials practice petty corruption, public discontent soars, and trust
in the government is eroding. Prevalence of corruption has also undermined public
morality in Chinese society. Despite the government’s repeated pledges to eradicate
corruption, there is no evidence that corruption is abating.
Many reformers in China, and scholars elsewhere, have blamed this
pervasive corruption entirely on China’s political system. It is said that the
Communist Party monopoly and the resultant lack of transparency, authoritarianism,
and weak civil society are responsible for the rampant corruption among its officials
(Pei 2007, 5). Proponents of this view fail to explain why corruption is equally
serious, if not worse, in some democratic countries like India, Mexico and
Philippines.
Some scholars have pointed to culture in an attempt to find the roots of
corruption. Indeed, some corrupt practices, such as patronage/clientelism
(baohusan), falsification (zuojia), trading power for money (quanqian jiaoyi),
“brown-nosing” (eyufengcheng), embezzlement and the taking of bribes (tanwu
1
fubai), etc., do have deep cultural roots and have been practiced for centuries in
China. Blaming corruption entirely on culture fails to do justice to the complexity of
the issue: change of political regimes, economic reforms, and certain features of the
country itself (such as China’s vastness and the corresponding scarcity of per capita
share of resources) may have all contributed to the state of corruption in China.
Otherwise, we would have to ask, why certain nations that have shared China’s
Confucian heritage, such as Japan and Singapore, are less corrupt?
Still others link corruption to China’s economic reforms (Sun, 2004), or to
the institutional “involution” of the Chinese Communist Party (Lu, 2000), in trying
to interpret corruption in contemporary China. Neither approach is adequate because
the emphasis still remains on the behavior of individual officials, rather than the
system as a whole. Although such individual and behavior-based approaches might
be appropriate for individual corruption, when corruption is systemic, as in China,
the ‘individual corruption’ approach is inadequate. The functioning of the system in
relation to its goals, rather than individual motivation and behavior, is the focus of
this study, for understanding systemic corruption in China.
As the phenomena of guanxi, qianguize (hidden rules), and corrupt networks
demonstrate, corruption in China is a deep, recurrent, and systemic problem. It is
systemic rather than individualized: it is endemic, rather than isolated; and
regularized, rather than random and sporadic. No Chinese organization or institution
is immune to its contagious power: in many organizations, dissent to corrupt practice
is simply disallowed and may result in imminent retaliation. Even foreign
2
companies regulated by the anti-corruption legislations in their home countries often
have to resort to guanxi or qianguize, or participate in a special connection network
to get business done. Corruption has infiltrated the very fabric of the system.
Moreover, most of the corrupt practices, especially guanxi, qianguize and
corrupt network (enterprise), were not only closely related to the ideologies,
institutions, and power-preserving tactics selected by the regime in the interest of its
own survival, security, and stability, but were also shaped, perpetuated, and
amplified by these prevalent ideologies, institutions, and tactics. Corruption grows
and flourishes under authoritarian regimes not by coincidence: excessive authority
coupled with discretionary power, the human inclination towards seeking self
interest, lack of transparency and dearth of check and balance upon power always
leads to corruption. In addition, those occupying same or similar positions or sharing
common interests tend to protect each other and form coalitions to resist change,
thereby perpetuating and fortifying corruption. Authoritarian forms of government
have been preferred throughout Chinese history because they were perceived as the
means to secure the survival, stability, and security of the regime, and the power-
holders. As authority is entrenched, so is its byproduct—corruption. Oftentimes
corruption is also tolerated by the regime in the interest of larger and more
fundamental goals of the regime, especially its own survival, security, and stability.
It is thus not surprising that although all governments in Chinese history
have been vocally attacking corruption in highly moralist tones, in reality, corruption
is nurtured under the ideologies and institutions the regimes have adopted for their
3
own survival, stability, and security. Systemic corruption actually grew among the
elite classes, and corruption was often tolerated, even utilized to serve the regime’s
survival, stability, and security.
In the next four chapters, the author will conduct a systematic analysis of
corruption in relation to the regimes in pre-modern imperial China and contemporary
China in an attempt to uncover how corruption was correlated to the ideology and
institutions chosen by the regime, how corruption was tolerated or utilized by the
regimes to serve their purposes, and how the regimes struggled to keep corruption
under control in the interests of their survival, security, and stability.
In chapter two, the author conducts an overview of the existing definitions of
corruption and chooses a working definition in light of the purpose of this
dissertation.
In chapter three, the author conducts an overview of the phenomena of
corruption in contemporary China, reviews the current approaches to research
corruption in China, and puts forward a proposal for treating corruption as a systemic
phenomenon and studying it in relation to the functioning of the regime.
In chapter four, the author analyzes corruption in pre-modern China in light
of the goals of the regime, the elitism in the officialdom, the ideology and
institutions chosen by the regime for its own security, how corruption grew in the
officialdom and in what circumstances the regime was still viable despite corruption,
and when corruption eventually threatened the regime and destroyed its viability.
The purpose, is to study corruption in light of the goals of the regime in the
4
comparatively static and agricultural pre-modern Chinese society, and to examine
how certain values were perpetuated in the long imperial, pre-modern Chinese
history.
In chapter five, the author analyzes the roots of corruption in contemporary
China in light of the genesis of the regime, the revolutionary/developmental goals
chosen and affirmed by the regime, the functional role of corruption in facilitating
economic development, and the potential threat of corruption to the regime. The
discussion here centers on how traditional practices of guanxi and qianguize have
survived and been transformed in the contemporary regime – in light of the regime’s
retention of the traditional authoritarian government, in face of its new missions and
opportunities.
Through this line of analysis, the author intends to shed light on how
corruption has become systemic and entrenched in Chinese society, and to
demonstrate that the regime’s survival, stability, and security has often led it to adopt
ideologies, policies, and mechanism which, though tending to foster corruption,
otherwise helped secure the regime. Corruption, though verbally and symbolically
attacked, nonetheless is considered a necessary evil. The caveat is that in the long
run, corruption will still hurt the regime, although for an open and developing society
it may take a long time for the long-term effect to actually pose a serious threat to the
regime, given the other sustaining factors in support of the society. As a result, the
regime might have sufficient time to work out solutions before crisis sets in,
5
including increasing transparency in government decision-making, opening up the
political process to wider participation, or supporting the civil society.
6
CHAPTER TWO
CORRUPTION: DEFINITION, CLASSIFICATION, AND PHENOMENA

In this chapter, the author discusses the current definitions of administrative
corruption, the problem of systemic corruption as compared with individual
corruption, the interrelation between corruption and cultural values, and eventually
the working definition chosen for this dissertation. The purpose is to lay the
conceptual groundwork for further discussions in subsequent chapters, which will
focus more on corruption in China.

Current Definitions of Corruption
Corruption is hard to define, even though there are a broad variety of
activities and practices that are universally considered as “corrupt.” Gerald Caiden
has identified nineteen categories of most commonly recognized forms of corruption,
including some easily recognizable and universally acknowledged corrupt practices,
including: larceny and stealing; misuse of funds; deceit and fraud; bribery and graft;
extortion; misuse of inside knowledge and confidential information; manipulation of
regulations; tax evasion; acceptance of improper gifts and entertainments; protecting
of maladministration; unauthorized sale of public offices, loans, monopolies,
contracts, licenses, and public property etc. (Caiden 2001, 17). Despite the universal
recognition of the “corrupt” nature of these practices, it is still hard to find or
7
conceptualize a coherent definition of “corruption” that catches the essence of this
garden variety of corrupt behaviors.
Existing definitions of corruption can be grouped into three types: public-
office-centered, market-centered, and public-interest-centered (Heidenheimer 1989,
8-11).
1. Public-office-centered definitions of corruption “focus on the concept of
the public office and describe corruption in terms of the deviations from the norms
binding upon its incumbents” (Quah 2003, 5). For example, Joseph Nye defined
corruption as
[B]ehaviors which deviates from the normal duties of a public role because of
private-regarding (family, close private clique), pecuniary or status gains; or
violates rules against the exercise of certain types of private-regarding
influences. This includes such behavior as bribery (use of reward to pervert
the judgment of a person in a position of trust); nepotism (bestowal or
patronage by reason of ascriptive relationship rather than merit); and
misappropriation (illegal appropriation of public resources for private-
regarding influence) (Nye 1967, 419).

2. Market-centered definitions of corruption focus on the market. A typical
example is Jacob van Klaveren’s definition:
A corrupt civil servant who regards his public office as a business, the
income of which he will seek to maximize. The office then becomes a
“maximizing unit.” The size of his income depends . . . upon the market
situation and his talents for finding the point of maximal gain on the public’s
demand curve (Klaveren 1989, 26, in “Political Corruption: A Handbook”,
by Arnold J. Heidenheimer).

8
3. The third group of definitions focuses on “an erosion of public interest”
(Quah 2003, 6). Carl Frederick’s definition is representative of the public-interest-
centered definition:
The pattern of corruption can be said to exist whenever a power holder who
is charged with certain things, i.e., who is a responsible functionary or
officeholder, is by monetary or other rewards not legally provided for,
induced to take actions which favor whoever provides the rewards and
thereby does damages to the public and its interests (Fredrick 1989, 15).

Among these three types of definitions, the public-office-centered definition,
especially Nye’s definition, is probably the most widely accepted. Many
international organizations have adopted the public-office-centered definition as their
official, or working definition of corruption. For example, the United Nations
Development Programme has defined corruption as “the misuse of public power,
office or authority for private benefit – through bribery, extortion, influence
peddling, nepotism, fraud, speed money or embezzlement” (UNDP 1999, 7).

Systemic Versus Individual Corruption
Corruption in many societies is not just an individual problem. For
individual corruption, the focus is on individual officials who stray from the
prevailing norms of official public behavior (Caiden and Caiden 1977, 306).
Individual corruption presupposes that the norms are still intact, and that corruption
is an exception to the norms.
Systemic corruption, however, is a situation where “wrongdoings have
become the norm, and the standard accepted behavior necessary to accomplish
9
organizational goals according to notions of public responsibility and trust has
become the exception not the rule” (Caiden and Caiden 1977, 306). According to
Christoph Stefes, systemic corruption is characterized both by the magnitude of
corrupt activities and by the presence of informal rules and norms that regularize and
inform these practices. These rules and norms are “informal so far as they are
neither explicitly codified nor externally enforced” (Stefes 2007, 6), but they
“powerfully shape the interests and strategies of public officials and citizens” (Stefes
2007, 7). A vivid example of systemic corruption is qianguize (hidden rules) in
ancient and contemporary China, an interesting phenomenon the author will discuss
in greater length below.
Caiden and Caiden provided the following list of symptoms for systemic
corruption: (1) while the organization professes an external code of ethics, the
internal practices contradict the open, external code; (2) the internal practices of the
organization encourage, abet, and hide violations of the external code; (3) non-
violators are penalized by forgoing the rewards of violation and offending violators;
(4) violators are protected, and when exposed, treated leniently, while their accusers
are victimized for exposing organizational hypocrisy; (5) non-violators suffocate in
the venal atmosphere and find no internal relief and much external disbelief; (6)
prospective whistleblowers have to be protected from organizational retaliation; (7)
violators become so accustomed to their practices and the protection given them that,
on exposure, they claim innocence; (8) collective guilt finds expression in
rationalization of internal practices; and (9) those having formal responsibilities of
10
investigating corruption rarely act and, when forced to do so, excuse corruption as
isolated, rare, and incidental occurrences (Caiden and Caiden 1977, 307).
Similar to the concept of systemic corruption is the bipolar classification of
primary versus secondary corruption. Bipolar classification treats corruption as
primary and secondary. The focal point is how a base of corruption subverts
“statesmanship by partisanship” or “governance by greed” (Werlin 2002, 346-347).
The distinction between “primary” and “secondary” corruption is based on whether
the public norms and societal rules are still intact. According to White:
Primary corruption, the less serious of the two, does not threaten the polity as
a whole. While involving extreme partisanship and selfishness, those
committing acts of primary corruption still accept legal and official norms.
Individuals may try to get away with what they can, but they still believe in
the fundamental rule of law and expect to be punished if caught (White 2001,
45).

In this situation, the government is relatively clean, and corruption may be
interpreted as rule-conscious exceptions (Manion 2004, 5). In other words, there is
no question that the corrupt practices violate the laws. Instead, “individuals
engaging in such practices use the law as their standard in making choices about
their actions” (Manion 2004, 5).
Secondary corruption, however, is considered more dangerous. It occurs
where “the political system encourages corruption and where there is no concern
about punishment or feeling of guilt” (White 2001, 45). Thus, the political system
has “a corrosive effect on governance, which further undermines an already ailing
system and, over time, leads to a culture of acceptance of corruption” (White 2001,
11
45). In this situation, rules, though existent, are practically irrelevant in the sense
that they do not describe official activities well and are not a useful basis for
expectations about official conduct (Manion 2004, 5). In other words, formal rules
and norms exist in words only, but are dysfunctional because the public no longer
holds realistic expectations for officials to behave in accordance with the rules.
Systemic corruption makes anti-corruption efforts a difficult task because
anti-corruption strategies often target individual offenders, motives, and interests,
starting from the assumption that “corrupt exchanges are isolated incidences that are
not informed by certain rules or norms, involving only a small number of
individuals” (Stefes 2007, 8). When corruption becomes systemic, corrupt exchanges
are embedded in complex networks and are guided by specific rules and norms that
they are more powerful than the institutions of the state and the market economy
(Stefes 2007, 9). Often systemic corruption is also facilitated, sanctioned, and
secured by the traditional practices and cultural norms of a society so that such
corruption is hard to dismantle. Little research has been done on systemic corruption.

Cultural Values and Corruption
Cultural values have a significant role to play in relation to corruption. The
role of cultural values can be understood from two angles: First, that the dominant
values of a particular society affect people’s evaluation of certain behaviors as
“corrupt” or acceptable. For example, gift-giving to public officials to show respect
is considered acceptable practice in accordance with the customs and traditions of
12
Kiribati (Mackenzie 2004, 6). Also, people from a more authoritarian society would
be more likely to view as ethical a questionable business practice, such as gift-
giving, than people from a less authoritarian society (Husted 1999, 343-44).
Secondly, certain value tendencies of a given culture are found to be strongly
correlated to corruption. For example, Lipset and Lenz analyzed the 1990-1993
World Values Survey in relation to corruption and formulated three propositions: (1)
cultures that stress economic success as an important goal but nevertheless strongly
restrict access to opportunities will have higher levels of corruption; (2) amoral
familism contributes to corruption; and (3) countries dominated by Protestants are
less corrupt than others (Lipset 2000, 116-22). Bryan W. Husted, using the data
published by Hofstede for fifty countries and three regions, articulated the following
findings: (1) power distance, defined as the extent to which the less powerful
members of institutions and organizations within a country expect and accept that
power is distributed unequally, is positively related to the level of corruption; (2) the
less individualistic and more collectivistic a society, the higher the level of
corruption; (3) the greater a society attaches value to material success, the higher the
level of corruption; (4) the greater the level of uncertainty avoidance (defined as “the
extent to which members of a culture feel threatened by uncertainty or unknown
situations”), the higher the level of corruption (Husted 1999, 343-345).
La Porta el al. also researched the roles that trust and religion play in curbing
corruption (La Porta et al. 1997, 336-337). Based on a sample of 33 countries, it was
discovered that trust correlates to lower levels of corruption while controlling for
13
GDP per head. The offered explanation is that trust helps bureaucrats better
cooperate with each other and with private citizens in fighting corruption. In terms
of religion, the La Porta team makes a distinction between the hierarchical and non-
hierarchical religions, and within this framework, the Catholic, Eastern Orthodox,
and Muslim religions are considered particularly hierarchical. For a sample of 33
countries, “the authors report a positive association between the percentage of
population belonging to a hierarchical religion and corruption, controlling for other
influences” (Lambsdorff 2006, 18). It is explained that hierarchical forms of religion
are detrimental to civic engagement, a factor that helps curb corruption (La Porta et
al. 1997, 337). A reproduction of this study for a larger sample of 114 countries,
however, shows a much weaker correlation between the percentage of the population
belonging to a hierarchical religion and corruption, as long as GDP per head is
included (Lambsdorff 2006, 18).
In addition to empirical studies, case studies also contribute to our
understanding of the relation between corruption and culture. For example, Glinkina
explains corruption in Russia partly in terms of three “aspects of the national
mentality”: the influence of Asian culture, which emphasizes familial relationships
and friendship; the communist system, which demands blind obedience; and the lack
of respect for the letters of the law, dating from the pre-modern period (Glinkina
1998, 18, 21). Perkins has explained how the central role of the family and the
hierarchical relational structure of the Confucian system has shaped the cronyism-
like business-government relationships in East Asian and South Eastern Asian
14
societies (Perkins 2000, 233). Very recently Peter Larmour studied gift-giving in the
Pacific Islands and showed that the concept of culture is still a relevant, very useful
concept in understanding corruption and the problems of corruption-control
(Larmour 2008, 226).

A Systemic Approach to Study of Corruption
As the problem of systemic corruption and corruption’s interaction with
cultural values demonstrate, the concept of corruption is highly complex and cannot
be understood in isolation from the understanding of the state, especially the goals
and the power structure of the state. As Johnston summarizes it, because the basic
idea of corruption is the abuse of power and trust, the breakdown of accountability,
or unacceptable efforts to influence power-holders, an understanding of corruption is
necessarily linked to our view of “what power is, where it comes from, and what
should be done with it – usually, in the context of government” (Johnston 2004, 1).
The study of corruption, according to Johnston, should tell people “about political
system and its continuing development” (Johnston 2004, 20). In other words, the
concept of corruption and any study of it would have to “ask questions about state,
society, and political change-effect, to examine boundaries and distinctions between
public and private, and acceptable versus unacceptable uses of wealth and power, at
the level of systematic development rather than specific actions” (Johnston 2004,
21). Johnston’s view echoes Caiden’s observation that corruption, especially
15
systemic corruption, must be studied in light of the operation of the society (Caiden
and Caiden 1977, 301-306).

Conclusion
For this dissertation, the author adopts the modified public-office-centered
definition of Johnston, defining corruption as abuse of public roles or resources for
private benefits while recognizing that corruption is a systemic problem having much
to do with the sources, uses, limits, and accountability of wealth and power. The
author further defines “abuse,” “public,” “private,” and “benefit” in light of their
historical/cultural contexts, especially the goals of the regime or society that creates,
distributes, delegates, and regulates administrative power.
With this specific definition of corruption, the author will then elaborate on
the methodologies utilized for this study, and lay out a research roadmap in the next
chapter.
The author then will analyze, by examining corruption in contemporary as
well as pre-modern imperial China, how corruption has grown within and been
nurtured by giant political systems. These systems have been organized for, and
concerned primarily with their own survival, stability, and security.
16
CHAPTER THREE
PHENOMENA OF SYSTEMIC CORRUPTION IN CHINA

Most of the existing research on corruption in China has focused on
individual, rather than systemic corruption. As recent studies of guanxi, qianguize
(hidden rules), and corrupt networks have shown, corruption in China is indeed a
systemic problem. Thus, a more adequate approach needs to be developed to study
systemic corruption in China, and as such, to search for the roots of corruption in the
systematic functioning of the Chinese government and society.

Existing Theories and Frameworks
Various approaches have been attempted to understand corruption in
contemporary China. These approaches bear the common shortcoming of focusing
on the deviant behavior of individuals while failing to address the systemic
dimension of corruption, even though deviant individual behavior has been analyzed
in light of its structural causes and consequences.
1. Institutional Approach
Some scholars attempt to understand corruption through analyzing the
institutional features of the Chinese Communist Party (the “CCP”). A representative
of this approach is Lu Xiaobo, who believes that “organizational involution” of the
CCP is the key to understanding corruption in contemporary China (Lu 2000, 22).
By “organizational involution,” Lu means a process whereby a revolutionary party
17
refuses or fails to adapt itself to, and be transformed by, the reutilization and
bureaucratization that characterize a modern bureaucracy, while the revolutionary
party is unable to maintain its original distinctive competence and identity (Lu 2000,
22). He concludes that “one of the fundamental causes of official deviance,
including corruption, has been the changes in the organization’s capability to
maintain committed, coherent, and deployable cadre over the fifty years since the
CCP came to power” (Lu 2000, 228). Lu observes that the CCP went through
institutional involution during the Maoist era (1949 – 1976) when the new regime
refused to become bureaucratized, but stuck to its Utopian ideal of creating a new
type of “socialist man” through revolutionary modes such as mass mobilization,
core-task creation, moral inspiration, and ideological indoctrination (Lu 2000, 230).
Under the pressure from the regime, cadres, as well as ordinary citizens, were
prompted to seek coping strategies in order to fulfill their individual needs, which
were ignored or denounced by the state (Lu 2000, 230). As a result, they
“formulated a set of informal rules of the game that deviate from, and sometimes are
distinct from, those of the official order” (Lu 2000, 230). The CCP’s efforts in the
post-Mao era to depoliticize and formalize the regime (by adopting laws and
restructuring institutions) did not solve the problem because many modes of
operations among the officials have been prevalent and deep-rooted (Lu 2000, 232).
When the ideological control and the politicized pressure mechanism are relaxed,
“[o]fficial deviance, which has always been present, became qualitatively more
perverse and quantitatively more pervasive” (Lu 2000, 230).
18
2. Economic Approach
Sun Yan’s book Corruption and Market in Contemporary China represents a
different approach: rather than seeing the root cause of corruption as internal in the
CCP’s institutional construct, Sun argues that corruption in contemporary China “has
been largely rooted in the course of economic liberalization” (Sun 2004, 193). Sun
focuses on the presence of opportunities (e.g., extensive government regulations,
institutional fragility and legal ambiguities) and corrupt motivation (e.g., absence of
moral sanctions, erosion of values and material deprivation) to interpret corruption
(Mushkat and Mushkat 2007, 84).
According to Sun Yan, 1992 serves as the dividing point between the two
stages of China’s economic liberalization: the first stage being the decentralization
stage, and the second stage being the market transition stage (Sun 2004, 193).
During the first stage, the contributing factors to corruption include: the dual-track
system, which allowed bureaucrats to interact with the market without added
mechanisms against those who cashed power from one track to the other;
decentralization, which gave local officials growing autonomy over fiscal and
distributive decisions without added mechanisms from above or below to control
how the increased authority was exercised; expansion of government regulation over
market activities without added mechanisms to check how the new regulatory
functions were performed; state-owned enterprise reform, which increased
managers’ autonomy over firm decisions without corresponding requirement of
liabilities and transparency; and commercial affiliation of state agencies and public
19
institutions, without enforcement of conflict-of-interest rules or fiscal obligations
(Sun 2004, 193). During the second stage which marked the end of the planned
economy and launched a full transition to a market economy, corruption became
aggravated as opportunities for illicit profiteering increased, while checking
mechanisms were further weakened (Sun 2004, 194). Specifically, with profiteering
opportunities on the increase, government power decentralized, and
departmental/provincial/local governments’ autonomy increased, consequently a
competitive-corruption model took shape (Sun 2004, 194). Under this model, “rent
extraction is shared among multiple officials and private interests in competitive
bribery, in contrast to a kleptocracy where a ruler monopolizes rent extraction, and to
a bilateral monopoly where rent extraction is shared between the ruler and a few
powerful private interests (e.g. mafia-dominated states)” (Sun 2004, 194). “The
reduction and change of state functions have in themselves created sources of rents
and spoils” (Sun 2004, 196).
Sun deems the state as an important force for mitigating corruption. In
answering the question why corruption in China had not gotten “worse,” like in other
former socialist countries such as Russia, Sun answered that “the institutional and
political strengths of the Chinese state have helped to avoid possibly the worse
combination in a post-socialist context: the amalgamation of bureaucratic capitalism,
oligarchic capitalism, and booty capitalism” (Sun 2004, 200). “A progressive
worsening of corruption has been reinforced by a progressive weakening of the state,
contrary to the neoliberal contentions in China and popular discourses in the West
20
that blame an excessive state” (Sun 2004, 207). In other words, Sun believes that the
root causes of corruption in contemporary China are outside rather than inside the
regime, and has less to do with the Communist ethos of the CCP than with such
universal factors as opportunities, incentives, disincentives, and capabilities of the
state.
3. Cultural-Psychological Approach
There is a third approach to understanding corruption in China – a cultural-
psychological approach. According to Wang Jianxin and Lu Xiaokang, the Chinese
cultural ethos (“habitus”) underlies widespread corruption. Wang and Lu identified
the following as the characterizing features of Chinese habitus: emphasis on this life
rather than the after-life; reliance on experience and practical wisdom rather than
abstract reasoning; pursuit of prestige, status, and success through interpersonal
relationships; passive adaption to the external environment and rather than active
action to change them; willingness to compromise principles to accommodate
practical needs; adherence to the “middle ground;” and acceptance and
internalization of gradation and hierarchy (Wang and Lu 2009, 137). These cultural-
psychological features represent the habitus of Chinese people and tacitly dictate the
daily behavior of thousands of million of Chinese people (Wang and Lu 2009, 137).
Wang and Lu recognize that the thousands of years of the “feudal” tradition,
especially the undeterred administrative power of the emperor, have played critical
roles in shaping the Chinese ethos (Wang and Lu 2009, 137). Particularly, living
under authorities and required to pay loyalty and obedience to authoritative figures,
21
officials and commoners had to resort to indirect, hidden, even corrupt means to
address their personal needs and to express dissatisfaction (Wang and Lu 2009, 138).
In addition, because one’s survival, security and stability often depended on those in
higher positions, a person had to learn to read the will of his or her superiors, in order
to please those in critical positions, and to feign obedience and loyalty in order to
succeed in career (Wang and Lu 2009, 138). These observations coincide with the
view of Liang Qichao, a vanguard of Chinese modernism, who held monarchy and
Confucianism responsible for generating “slavishness” among the Chinese (Sullivan
2006, 176).
Practically-minded and very experienced in dealing with power, most
Chinese are flexible with respect to rules and principles and would not mind
departing from them when doing so might be beneficial under the circumstances
(Wang and Lu 2009, 138). This is referred to as ju ti wen ti ju ti fen xi (to solve
problems based on the specific circumstances) (Wang and Lu 2009, 138). According
to Wang and Lu, when it comes to formal rules, “what an individual sees first is not
the solemnity, mandate, and binding force of the rules, but flexibility, adaptability,
and grey areas” (Wang and Lu 2009, 138). Consequently, rules and principles are
mostly mere maidservants to power. They are easily bent by those in power and
constantly circumvented by those underneath administrative power. At the end of the
day it is the will of those in power, rather than the laws and rules, which determine
the results.
22
The Inadequacies of the Individual Approach
The existing approaches share a common shortcoming: they all focus on
individual, rather than systemic corruption. Therefore, the focus has been on the
deviant behaviors of individual officials rather than the fault of the system. As has
been explained, the individual approach is inadequate where corruption is systemic –
“a situation where wrong-doing has become a norm, and the standard accepted
behavior necessary to accomplish organizational goals according to notions of public
responsibility and trust has become the exception to the rule” (Caiden and Caiden
1977, 306). In such a situation, focusing on individual behavior is not the right
approach. There is no guarantee that if the offenders are removed, corruption will
abate, because the old patterns will continue with new players. Although people may
change, the system persists (Caiden and Caiden 1977, 307).
Even though the official Chinese media often refers to corruption as isolated
official deviation from the CCP ideals and norms, in reality corruption is deep-
rooted, pervasive, and in some circumstances taken for granted as the normal way to
get things done. Corruption in China is a systemic rather than individualized
problem. Three phenomena confirm that corruption is indeed systemic in China:
Guanxi, hidden rules, and corrupt networks.
1. Guanxi
Guanxi is “a network of private contacts characterized by personal, informal,
and clandestine deals” (Fan 2002). As such, it is “the web of relationships that
functions as the set of interlocking laces which connects people of different [status]
23
together” (Jia 2006, 49). Considered one of the most important success factors in
doing business in China (Yeung and Tung 1996; Abramson and Ai 1999), Guanxi
benefits those in the network by affording them privileged access to information,
resources, opportunities, and powerful people. Having a resourceful Gaunxi network
therefore translates into a shortcut to scarce resources and lucrative commercial
opportunities.
Because Guanxi is important, businesses are willing to invest in developing
Guanxi. According to a survey by the Hong Kong Independent Commission against
Corruption in 1993, Guanxi accounted for 5% of the total costs in doing business in
China (ICAC, 1993). Not only is Guanxi exploited for commercial purposes, it is
frequently relied on by ordinary Chinese to transact businesses on a daily basis. It
has been observed that Chinese are prone to rely on shouren (people within one’s
gaunxi network), to acquire goods and services, access public health care, obtain
government required licenses and permits, and fulfill other daily needs (Ledeneva
2008, 122). “Because of preexisting relationships such as friendship, kinship, or
guanxi indebtedness, [shouren] can be relied on to help obtain [the] desirable object
or to ‘get things done’” (Yang 1994, 64). Because guanxi relationship is essentially
stable and reciprocal, by transacting business through shouren one expects better
treatment, less procedural hassles and delays, lower transactional costs, assurance of
the quality of the acquired goods or services, or simply avoidance of fraud.
Is guanxi inherently corrupt? It is without doubt that all gaunxi practices are
discriminatory in terms of favoring the insiders over the outsiders. Therefore guanxi
24
practice contravenes modern values of fairness, impartiality and equality (Fan 2002).
Furthermore, “guanxi network provides the context for minimizing the transaction
costs of corrupt behavior, in that they transform high-risk exchanges into self-
implementing contracts” (Di Felice 2007).
Guanxi, however, has been a social practice with a long history in Chinese
society (Di Felice 2007). As Di Felice pointed out, Chinese social behavior can be
partially understood in terms of hierarchical roles taught by Confucianism, which
dictate the obligations an individual has in five cardinal relationships – son toward
father, subject toward emperor, student toward teacher, wife toward husband, and
younger brother toward older brother (Di Felice 2007). This hierarchical system of
ethics has been transplanted into the society at large and the workplace, forming the
basis of a pervasive “organized dependency” in ancient Chinese societies as well in
the Communist state (Di Felice 2007). As a result, guanxi is widely practiced in
China now as before. Guanxi practice also comports well with the Confucian idea of
graded affection, which justifies gradation of affection and mutual obligations in
terms of the closeness of relationship and gives priority to one’s kins and close
friends (Gardner 2007, 73). After all, equality is an alien concept to Confucianism
(Gardner 2007, 70).
Guanxi is also closely related with lack of generalized trust in the society
(trust that is universalistic and based on openness rather than personal favoritism or
self interest). The mechanism of Guanxi operates through particularized trust, which
is based on familial ties, personal friendship, or a history of reciprocal relationship
25
(Uslaner 2005, 77). In contemporary China, as always, trust is highly particularized
as trusting relationships exist mainly between people that are known to each other
and rarely between strangers. Because highly particularized trust correlates to
serious corruption, unsurprisingly guanxi, which operates through particularized
trust, positively correlates to corruption.
Guanxi also plays the functional role in overcoming power distance. By
joining a resourceful network, one expects to associate with those people in higher
positions in order to obtain “convenience” or benefits that will otherwise be
unavailable. Thus the art of guanxi (guanxixue) has been developed in China, which
focuses on the art and techniques of cultivating personal relationships and networks
of mutual dependence, creating personal obligations and indebtedness, and
exchanges of gifts, favors and banquets (Ledeneva 2008, 122). For occupants of
high positions, it is also common to use cunning, compelling, and aggressive tactics
to avoid being approached by persons they do not want to associate with (Ledeneva
2008, 122). Guanxi in its functional sense is essentially solicitation of
patronage/clientelism, and as such facilitates corruption.
For most Chinese people, the practice of guanxi is not always a voluntary
choice, but a necessity in order to survive and thrive in the system. Indeed, those
who choose to ignore the guanxi network and its prescribed norm of reciprocity risk
“ostracism by friends and relatives” (Yang 1994, 69). An absolute denunciation of
guanxi carries negative moral implications in the Chinese culture. After all, guanxi
26
is rooted in kinship ethics and popular Confucianism, and as such carries an ethical
dimension (Ledeneva 2008, 127).
Arguably the modernization and market transition of Chinese society has
reduced ordinary people’s need for guanxi practices. However, for commercial
transactions, the opposite might be true. It has been observed that market transition
and revival of private businesses lead to the growth of clientelism (Wank 1999),
which depends less on affective ties and more on particularized trust based on
reciprocity (Sun 2004, 72). Indeed, commercialized guanxi practices are guaranteed
to thrive where scarce resources (such as state contracts, import-export licenses, bank
loans, favorable tax incentives, valuable market information, land use rights, etc.) are
in high demand, market entry costs and transactional costs are substantial, official
control of lucrative industries and national economy remain intact, and decision-
making is centralized in key officials.
2. The “Hidden Rule” (qianguize) Phenomena
While guanxi binds and benefits insiders, “hidden rules” (qianguize) bind
insiders as well as outsiders. If guanxi gives its participants a favorable advantage,
qian guize denies opportunities to and penalizes those who defy the rules.
The word “qian guize” (hidden rules) was coined by Wu Si to name the
unspoken but normalized rules in traditional Chinese officialdom (Wu Si, 2009).
Wu Si essentially discovered that “hidden rules,” though often in conflict with
formal rules and standards, have been so widely practiced that they effectively
control the operation of the Chinese society (Wu 2009).
27
Currently qian guize (“hidden rules”), as discussed in the Chinese context,
encompasses two distinctive types of practices. The first type is organizational
hidden rules, meaning tacit behavioral norms inherent in a community or
organization. Lin Zhe, a professor of politics and law at the CCP Central Cadre
Training Institute, provides the following summary:
The ‘hidden rules’ refer to the practice of following the tacit rules of the
community. The tactic rules are secretive, hidden, unspoken, but agreed-
upon. At many places observance of hidden rules is a condition for
acceptance into a community, to win trust from other community members
and to get things done. If the routine practices within the community are to
establish personal relationships with the superiors, to brownnose him, to give
gifts to him on special occasions, and to give gifts to each other, it is likely
that these practices have become the “hidden rules” governing the personal
and official behavior. If one refuses to observe these hidden rules, he will be
considered a non-conformist and as such has difficulty maintaining good
relationships with other members of the community. Eventually he might be
kicked out, or will be isolated (Lin 2007).

An organization dominated by “hidden rules” may nonetheless have an
external code of ethics or publicized standards. However, the internal practices often
contradict the publicized ethical code and constantly encourage, abet, and hide
violations of the external codes (Caiden and Caiden 1977, 306).
The second type of “hidden rules” is the unspoken yet operative norms in
market transactions. These operative norms also contradict the open transactional
rules and impose extra costs. Many of these “hidden rules” are simply rent-seeking
tools and as such corrupt per se. “Hidden rules” are most common in connection
with lucrative government contracts, banking transactions, real estate industries
(such as acquisition of land use rights), health care (such as medical equipment
28
procurement), and import/export. The most common “hidden rules” are payment of
kickbacks to representatives of business partners, cash gifts to surgeons and
reporters, commissions to loan officers of banks, etc. (Lin 2007). Indeed, kickbacks
and cash gifts have become important supplements to the incomes of doctors,
reporters, corporate sales representatives, even professors (Lin 2007).
3. Corrupt networks
Many corruption cases in contemporary China involve “collusive
corruption,” meaning officials and non-officials cooperating with and protecting
each other in committing massive corrupt practices. “In the worst instance, collusion
has transformed entire jurisdictions into local mafia states” (Pei 2007, 3). “Collusive
corruption” often involves multiple patron-client relational chains traceable to one or
several “top patrons,” in most cases the most senior official of the region or senior
figures in an industrial sector. The operation of the patron-client relation in
contemporary China is not very different from ancient Chinese practice: lower
officials seek favor from and carry out the will of the senior officials, and the senior
officials protect and cover for the lower officials. Likewise, non-officials (like the
ancient local gentry) send gifts to or establish personal connection with junior
officials in exchange for their protection. In some cases, a merchant is associated
directly with a senior official to form corrupt coalitions, as illustrated next in the
cases in Mu Suixin, the former mayor of Shenyang (Sun 2004, 127-28), and the
recent case involving former Shanghai Mayor Chen Liangyu.

29
Systemic Approach – Perspective and Methodology
As guanxi practices, qianguize, and collusive corruption demonstrate,
corruption in contemporary China is a systemic rather than individualized problem.
Why so? First, guanxi, qianguize and collusive corruption are all rooted in
and interwoven with institutions and operational systems chosen by the regime, and
are therefore byproducts of the system originally designed to secure and benefit the
regime. Guanxi is closely related to the hierarchical and relational worldview of
Confucianism, the ideology chosen by pre-modern Chinese monarchs to secure their
regime and still holding sway in China’s governmental and corporate culture (Di
Felice 2007). Hierarchy provides great power and privilege on occupants of high
positions and creates the necessity for those underneath the authority to reply on
authorities for one’s benefits and success. Emphasis on interpersonal relations
creates a culture highlighting relational harmony, reciprocity and mutuality. The
result is a society characterized by “organized dependency” (Di Felice 2007),
pursuant to which people rely on personal connections to circumvent formal
procedures for career advancement and economic and well as personal benefits.
Qianguize is impossible without the over-centralization of official power, a
strategy both the ancient and contemporary Chinese governments adopt to secure
their grip upon the country. This has changed little since ancient times. Even Deng
Xiaoping’s comprehensive reform did not touch the CCP’s monopoly of public
power. Although significant decentralization of central government power has
occurred, decentralization did not mean concession of the power of the Party.
30
Official power was not reduced in the post-Mao reform era, but was simply
redistributed to the lower levels of the hierarchy (Johnston and Hao, 1995). “The
two central pillars of the planned economy remained in place: the huge party-state
machinery and monopolistic state organizations from the center down to local village
government, and the high political and social status enjoyed by Communist officials
within these organizations” (Di Felice 2007). Monopolization of power, including
power to regulate economic activities, created opportunities for agencies and local
governments to create “hidden rules” for self enrichment. As Hilton Root explains:
[I]n China different bureaus and agencies all want their own market
over which they have monopoly powers. An economy of sectors and
regions emerged whose primary function was to award officials
shares of the local economy and the right to collect rents from those
who traded in that economy. The development of a labyrinth of local
trade and licensing restrictions serves the same function (Root 1996,
747).

Guanxi and qianguize based on government monopoly combines to create
collusive corruption. Motivated by self-enrichment in the new market environment,
officials expanded their guanxi practice to encompass vertical relationships between
officials and businesses (Di Felice 2007). At the same time, officials continue to
collude among themselves to expand and perpetuate their privileges. The result is
corrupt collusive networks “comprising not only multiple party and state
organizations, but initiated by private enterprises, nongovernmental organizations,
and even organized crime groups” (Di Felice 2007).
Second, like other forms of systemic corruption, guanxi, qianguize and
collusive corruption all involve willing and unwilling participants. Unlike
31
individualized corruption, systemic corruption is institutionalized and does not go
away with the removal of corrupt officials. It involves both willing and unwilling
participants. While willing participants hide behind the system to profiteer from
corrupt practices, unwilling participants are pressured into compliance because non
cooperation will be penalized, while violation of formal and external rules is
expected and protected (Caiden and Caiden 1977, 307). For example, one refusing
to play by “hidden rules” will be deprived of the benefits one is seeking; one refusing
to honor guanxi relationships will be ostracized from their guanxi network, and bear
the stigma of a traitor; ones refusing to collude in a corrupt network will risk not
only loss of trust from their superiors and colleagues, but also loss of job, and in
some extreme cases, reputation and life. In a corrupt system, non-compliance always
comes with a price. Violators, both willing and unwilling, eventually become so
accustomed to corrupt practices that they lose their sense of guilt and shame.
Finally, guanxi, qianguize, and collusive corrupt networks have infiltrated
into those parts of the government that are supposed to prevent and fight corruption
and corrupted their institutional culture. This symptom indicates that corruption is
indeed a systemic problem in China (Klitgaard 2004). Corruption has contaminated
the law enforcement and the judiciary, including the anti-corruption bureaus charged
with investigation and prosecution of corruption. A case in point is the recent
prosecution and death sentence of Wen Qiang, former chief of Chongqing’s justice
bureau and former deputy chief of the Chongqing Police Department. Over a period
of fourteen years, Wen shielded five major organized crime gangs in Chongqing
32
(Xinhua July 7, 2010). Xie Caiping, one of the major gang leaders in Chongqing
nicknamed Chongqing’s mafia “godmother,” was actually Wen Qiang’s sister-in-law
(Ramzy 2010). Under Wen’s patronage, gangs controlled all aspects of daily
operations of the city, taking “a big cut of everything from transport to construction,”
operating brothels and illegal gambling dens, even openly killing their rivals (Ramzy
2010). The corrupt network included not just Wen, but many key local officials,
even police officers and judges. In the Chongqing case, 1000 people were arrested,
782 were prosecuted, including 87 government officials in cahoots with the
gangsters (Ramzy 2010). Unfortunately, protective network between organized
crime and law enforcement existed at many places in China, not Chongqing alone.
According to Ko-lin Chin, Professor at Rutgers University and expert on Chinese
gang crimes, “[e]verywhere you go it is pretty much the same” (Ramzy 2010).
Where corruption has become systemic, it “has become so regularized and
institutionalized that organizational supports back wrong-doing and actually penalize
those who live up to the old norm” (Caiden and Caiden 1977, 306). According to
Gerald and Naomi Caiden (Caiden and Caiden 1977, 301-306), systemic corruption
must be understood in light of its relationship within the operations of the society.
One needs to understand how a society functions in relation to its goals in order to
comprehend how it accommodates, encourages, and even embodies corruption. The
key is not so much the techniques of organizational method as the organizational
goals and the qualities necessary to support them. Indeed, corruption is closely
related to the situation where specific, substantive, and public goals are displaced
33
and particularized benefits for privileged individuals or groups take their place.
However, another relevant but often overlooked aspect of corruption is that
sometime corrupt practices are means to achieve the goals of the organization,
especially those of a state. Corruption may not be the goal by itself, but is often a
byproduct of the systems, techniques, or institutions chosen to further the goals of
the organization, or simply tolerated for the purposes of achieving larger and major
goals of the organization. For example, in his famous and controversial book Prince,
Niccole Machiavelli advised those who become rulers through wicked means to
decide immediately after their seizure of power “about all the injuries they need to
commit, and do all of them at once,” based on the rationale that “injuries should be
done all together so that, because they are tasted less, they will cause less
resentment” (Skinner and Price 1988, 33). Though using one’s authority for
calculated and intentional infliction of injuries is essentially evil and corrupt, when it
becomes necessary to secure one’s power, Machiavelli’s view is that a ruler should
wisely inflict them so that the regime itself may survive, be stabilized, and be
secured (Skinner and Price 1988, 33).
In Chinese history, governments at different times have been defining their
goals differently. Underlying these themes were the common goals of all regimes:
survival, stability, and security.
Traditional Chinese empires justified the legitimacy of the imperial reign by
reference to the “Mandate of Heaven,” and considered the ideal state one under the
unified authority of a sage king who manifested “true goodness,” protected the
34
livelihood of his subjects, and promoted virtues such as filial piety (Gardner 2007, 15
and 54-55). Such an imperial government valued tradition over innovation,
harmony over progress, and stability over change. It was not until the early 1900s
that the rulers of the last Chinese Dynasty – Qing, realized that China lagged behind
in comparison with modernized countries and attempted its own reform in order to
achieve modernization – more for the purpose of survival than progress – only to be
overthrown without seeing the fruit of its reforms. The revolutionaries who
overthrew the Qing Dynasty organized their own political party (Guomintang – the
“Nationalist Party”) around the “Three Principles” – Principle of Nationalism,
Principle of Democracy, and Principle of People’s Livelihood – in order to build a
modern state. The CCP at its revolutionary stage avowed to liberate the Chinese
people from the yokes of “imperialism, feudalism, and bureaucratic capitalism,” and
to build an egalitarian and prosperous society reflecting Communist ideals. The
Communist reformers represented by Deng Xiaoping pledged the CCP’s dedication
to economic development and promised prosperity to the Chinese people. Though
different and reflecting the concerns of their own time, the goals of the regimes
throughout Chinese history share a commonality: underneath the pronounced goal lie
the concerns with the regime’s survival, stability, and security, the same values that
have concerned every regime.
1. Survival
Concerns with survival underscore the goals of every regime, including the
Chinese. Since the founding of the first unified Chinese empire – the Qin Dynasty
35
(221 B.C.), Chinese history has been repeating the cycles of order and chaos (Lin
2002, 64). Indeed, the first imperial dynasty – Qin (221-207 B.C.), lasted for only
fourteen years and historically was the most short-lived Chinese dynasty, despite its
strong military force, its well-drafted and strictly enforced laws, and its advanced
infrastructure. Later Chinese dynasties learned from the lessons of the Qin dynasty
and resorted to not only military might, but also political skills to ensure the survival
of the regime. According to Jia Yi, an imperial advisor living between 200 and 168
B.C., Qin’s failure was due to its inability to adapt to its changed position from a
conqueror to a ruler, and to use grace as well as might as a means to secure the
support of the populace.
Indeed, survival required artful statesmanship. Regimes, even the greatest
ones, were troubled with external and internal challenges: external invasion, civil
war, unrest, rebellion, dissolution, etc.. To ensure the survival of the state, a regime
must ensure both internal support and external might. It must maintain a strong
military force, secure the support of the elites, control its generals, appease its
populace, and wisely dispose of its financial resources. Indeed, a lot of the
undertakings of the state were for the purpose of survival, such as the construction of
the Great Wall, maintenance and training of a strong army, surveillance over the
populace, suppression of dissidents, collection of taxes, selection, control and
supervision of government officials, and, most importantly, reinforcement of social
institutions such as clans and families.
36
2. Stability
The survival of a regime is critically dependent on its stability. To keep a
regime stable required much effort, control, contrived nationalism, and emphasis on
tradition. It also required competent, capable, reliable, trustworthy leadership.
The key to stability lies in dealing artfully with the internal tensions a regime
necessarily embodies: tensions between the power-holder and the bureaucrats,
between different factions of elites, between the haves and the have-nots, between
the progressively-minded and the conservatives, between the elites and the
commoners, etc. Though the authorities need to heed and address the demands from
different sectors of the society, it is unlikely that everyone will be satisfied. Under
most circumstances, the authorities need to strike a balance between competing
interests to make sure that all concerns are at least partially addressed, while a
compromise is properly negotiated and enforced.
As long as tensions within the society are moderate, they help rulers by
ensuring rulers act as active balancers, mediators, and as the ultimate arbitrators.
They also give the ruler an opportunity to display qualities of competent leadership:
justice, discernment, prudence, determination, etc. Potent and skillful rulers can
therefore use tensions to enhance their stature and the prestige of the regime.
Not every ruler is competent and skillful. Very often a ruler had to use
unusual means to achieve stability, such as favoritism, bribes, contracts, alliances,
rewards, etc., which had the effect of weakening the ruler’s authorities, enhancing
the stature of certain interest groups, and compromising the core values and
37
principles that define the regime. Stability under these circumstances is therefore
temporary, rather than lasting, as the weakening of the moral foundations of the
regime may erode its sanctity and legitimacy—factors upon which long term stability
always depends.
3. Security
A regime needs to ensure its own security, the security of the key component
interest groups, and the security of its members. While individual members of a
society look to the state for the protection of their security, the state also needs the
popular support to ensure its own security. As Xunzi, an ancient philosopher and a
contemporary of Confucius said: “The common people must be happy with the
regime, then the noblemen would be secure in their positions. The prince is like a
boat, and the commoner is like water. The water can carry a boat, but can also
overthrow a boat” (Wang 2007).
How to assure the masses that they were safe and their welfare was being
promoted so as to ensure the regime’s security? The authorities had to demand
veneration and offer benefits so that individuals would depend on the system for
their protection and success. By eliciting dependence, veneration, and responding to
the expectations of the commoners, a regime best ensured its own security. To
ensure security of the regime, the regime always acted in the name of the masses,
although in reality the individuals – who constitute the masses – are often discounted
or neglected. Indeed, to a regime, individuals (except those individuals in the ruler’s
38
clique) are replaceable and dispensable; the individual is nothing compared to the
whole society, the collectivity, and the notion of publicness.
Indeed, the Chinese history consists of striving for survival, stability, and
security. Various corrupt practices emerged and were perpetuated in the course of
the many regimes’ efforts to achieve survival, stability, and security. Many of these
practices were actually necessary and unavoidable although they contradicted ideals,
morality, dreams, and they were disliked, resented, and opposed but accepted as
necessary to keep China (or the idea of China) and the Chinese Empire intact. The
religious morality came in reaction to real politick, the demands of statehood, and
dreadful political and administrative practices.
An appreciation of a regime’s primary goals – survival, stability, and
security—has informed the author’s research about systemic corruption in China.
Indeed, it is only with reference to a society’s functioning to achieve these ultimate
goals can corruption (as a systemic rather than individual issue) be fully understood.
Very few regimes chose corruption as their goals. Indeed, many of them adopted
rigorous anti-corruption mechanisms, such as Emperor Hong-wu’s harsh penalties
imposed on officials who committed embezzlement involving amounts that were
negligible and trivial by later standards, and Chairman Mao Zedong’s massive
campaign targeting corruption and official privilege abuse. Corruption grew within
the regime either as byproduct of the institutions, ideologies, and tactics employed to
secure the regime, or was tolerated in the interest of larger or more fundamental
goals of the regime. For example, privilege was often awarded as a means to secure
39
loyalty, to build alliance, and to neutralize political rivals, although privilege under
most circumstances causes corruption.
Thus, in responding to the query “how systemic corruption came about in
China,” one needs to inquire how various forms of corruption have been accepted,
tolerated, or even regularized as compatible with the goals of survival, stability, and
security, and what are the ultimate impacts of corruption on these goals. The
following questions need to be answered:
1. What corrupt practices are tolerated by the regime as “necessary evils?”
2. What corrupt practices threaten survival, stability, and security?
3. What corrupt practices are most harmful to statehood/society?
4. What corrupt practices do people most resent?
In order to answer these questions, this dissertation contains a comparison
between corruption in the traditional Chinese empires and the contemporary regime
led by the CCP, in an attempt to establish the relations between corrupt practices and
the regime’s concerns for its own survival, stability, and security. Although
corruption in the Nationalist (Kuomintang) regime also deserves research and
discussion, the Kuomintang regime was short, transitional, and extremely unstable
from its very beginning, therefore fundamentally different from the well established
regimes like a traditional Chinese empire and the People’s Republic of China. As a
result, this dissertation will not include a comprehensive analysis of corruption in the
Kuomintang regime, other than a brief discussion of what factors or conditions might
have contributed to wide-spread corruption and the eventual fall of the regime.
40
Corruption in the Kuomintang regime is a special phenomenon that deserves special
treatment, which falls outside the scope of this dissertation, which focuses on
corruption in well-established regimes.
In a nutshell, this research will be organized around the following tasks:
1. To analyze the phenomena of corruption in Imperial China and
contemporary China to discover the commonality of corrupt practices
during pre-modern and contemporary times;
2. To analyze the underlying institutional incentives and disincentives with
the officialdom, to discover how corruption was related to the elite class,
government structure and institutional design in the pre-modern and
contemporary periods;
3. To analyze to what extent corruption was an inevitable consequence of a
regime’s institutional and ideological choice, and when corruption
became the regime’s informal official compensation system, in pre-
modern and contemporary times;
4. To analyze scenario where corruption contributed to the survival,
stability, and security of a regime, and when corruption has hurt these
goals, in pre-modern and contemporary situations.

Conclusion
Because corruption in contemporary China is of a systemic rather than
individual nature, none of the existing approaches that has been adopted to research
41
corruption – neither the institutional research, nor the economic research, nor the
cultural psychological research – is adequate. Corruption must be interpreted in
relation to the functioning of the society and primary goals of each regime – survival,
stability, and security. Differentiation should be made with respect to corrupt
practices that temporarily aid the regime to reach its primary goals, and those that do
disservice to these goals, although ultimately all corrupt practices will hurt the
regime as they undermine the regime’s legitimacy, erode public trust, discourage
individual integrity, create hidden institutions, and deplete public resources. Despite
these harms, corruption needs to be studied as the means to achieve the ends of the
regime. Special attention should be paid to the pragmatic purposes each corrupt
practice serves, how the corrupt practice was generated, which ideological value,
institution, or political tactic is correlated to the practice, why the practice has been
tolerated, and who benefited from or is harmed by the practice. Assessment and
evaluation of corruption should be made in light of the regime’s primary goals –
survival, stability, and security. Otherwise anti-corruption efforts will be hollow
moralistic slogans devoid of any efficacy.
42
CHAPTER FOUR
CORRUPTION IN PRE-MODERN CHINA

This chapter analyzes corruption in pre-modern imperial China from the
prism of the regime’s goals of survival, stability, and security. To accomplish this,
the constituency and goals of the pre-modern Chinese empire and the goals of
imperial regimes will first be analyzed, then the ideological and structural support
the imperial regimes adopted to fulfill their goals will be discussed. Thereafter, the
research will examine how the ideological and structural support the imperial
regimes relied on to accomplish survival, stability, and security, which embodied
certain inherent traits and tendencies, correlated to prevalent forms of corruption in
the imperial regime. Lastly the dissertation will discuss, through analyzing the
interaction between the three major social classes of an imperial regime, how
corruption was tolerated, perpetuated, and amplified within the imperial government
system, and when corruption indeed threatened the survival, stability, and security of
the regime. Based on the goals of the imperial regimes in ancient China and the
structures and techniques they chose to support and secure the regime, corruption
was unavoidable and, when accepted and routinized, would naturally doom the
regime.

43
The Imperial Government
The imperial form of government dominated China from 221 B.C. (the
founding of Qin Dynasty, the first unified empire) to 1911 A.D. A traditional
Chinese empire was a hierarchical political structure consisting of three classes of
participants:
a. The supreme ruler, bearing the title of “emperor,” exercised all power over
his subjects and ruled the country in the name of heaven. The ruler was the state’s
sole legislator, ultimate executive leader, and the highest judge (Mote 1999, 98).
“His pronouncements were, quite literally, the law, and he alone was not bound by
his own laws” (Mote 1999, 98). The emperor was the ritual head of the state,
analogous to the head of every Chinese clan or lineage (Mote 1999, 98). The
emperor was also the ultimate moral authority and was supposed to safeguard the
core values of Confucianism (Mote 1999, 98). The emperor, as the primary
protector of his subjects, was also the supreme commander of the imperial military
force.
b. The imperial court, consisting of the emperor and his close advisors,
commanded an officialdom staffed by central and local officials. The imperial
officialdom mediated between the ruler and his subjects. Local officials, especially
county magistrates, carried out most of the daily administrative functions in support
of the functioning of the empire: collecting taxes in grain, textile, or cash from the
local farmers or villagers; calling up the emperor’s subjects to serve their allotted
time in the labor coup or armed forces; maintaining granaries, canals, and roads in
44
proper repair; up-keeping the imperial dispatch/communication system; keeping
official files and records; registering land and households; administering justice, etc.
(Loewe 1968, 36-37, 68). Most officials were selected through the rigorous civil
service examinations, a series of highly competitive, multi-level examinations that
selected candidates for civil services based on their knowledge in Confucian classics.
c. At the bottom of the hierarchy were commoners, mostly peasants with
meager financial means, but also including landholders, small estate-holders,
craftsmen and merchants in towns and cities, etc. They were expected to focus on
their occupations, pay taxes, and provide labor when required by the government.
Commoners were given no opportunity to participate in the political affairs of the
empire. Yet, at least in theory, a peasant’s son could become an official through
excelling in the civil service examinations.
Among the commoners there was a privileged subclass: local gentry, mostly
patriarchs of influential clans, wealthy land-owners, holders of junior scholarly
degrees, or retired officials. Local gentries managed local affairs and superintended
a great many public services, such as repair of walls and temples, management of
ferries and of dike-building, upkeep of local temples, provision of food relief in time
of need and similar managerial activities (Fairbank 1986, 44). They were frequently
called in to arbitrate civil disputes (Finer 1997, 1153). Many local gentries
maintained close relationships with local officials. A local official, who was
forbidden to serve in his hometown according to the imperial civil service code,
would rely on local gentries familiar with his administrative jurisdiction to
45
successfully carry out his official duties and functions. Local gentries also needed
the local officials’ prestige and protection to entrench their privileged status and
reinforce their authority. Therefore, powerful local gentries often formed a close
bond with local officials. Typically the relations between gentries and officials
involved corrupt exchanges, such as giving of gifts in exchange for protection.
An empire was a powerful political machine. With the country unified,
administrative power centralized, infrastructures in place, and a royal army standing
by, an empire was probably the most efficient government apparatus in the pre-
modern world, judged by its ability to mobilize and allocate resources, collect taxes,
promote agricultural productivity, respond to natural disaster and internal conflicts,
and mount effective national defense against external enemies (Wu 2009, 235).
It was not easy to keep a vast empire intact and functional. The empire was
so enormous that it took weeks, even months, to travel from the capital to remote
provinces. For example, according to the records from the early nineteenth century,
it could take as long as forty days to travel from Peking, the imperial capital, to
Canton, an important province in the South (Finer 1997, 1147). Travel from Peking
to Nanjing, the most important city in the prosperous Southeast China, normally took
ten days, but the trip could take as long as twenty-five days depending on various
factors, especially the weather (Finer 1997, 1147). Travel to the remote and
mountainous Western province of Sichuan was more difficult and normally took four
to six weeks according to the records in 1842 (Finer 1997, 1148).
46
An empire, due to its very vastness and complexity, necessarily embodied
many tensions: tensions between the supreme ruler and his officials, between the
different political factions within officialdom, between the ruler and his subjects,
between competing geographic interests, between the military and the civil
officialdom, between the empire and the surrounding states and tribes, between the
haves and have-nots within the empire, to name but a few. What must a wise ruler
do in order to safeguard the regime? How did corruption grow and spread in
imperial officialdom?

The Goals of a Traditional Chinese Empire
The first unified empire in Chinese history – Qin, was a failure. This empire
had been designed as an ever-lasting edifice: after conquering all the competing
“kingdoms” by superior military might, the founding emperor of Qin imposed a
well-designed legal and administrative structure upon the nation, undertook massive
infrastructure construction projects (such as the Great Wall and public roads
connecting all major provinces of the empire with the imperial capital), and
ruthlessly destroyed any existing and potential enemies, including the execution of
hundreds of Confucian scholars that the emperor believed to have taught ideas that
hurt the regime. None of these measures proved successful: the empire lasted for
only fourteen years.
As historians in ancient and modern times have observed, Qin’s founding of a
unified empire met with the approval of the masses. Had the rulers of the Qin
47
Empire taken advantage of the popular support for unification of China and carefully
designed policies to secure the approval of the subjects, the empire would have been
successful. As Sima Qian (145-87 B.C.), one of the earliest and greatest Chinese
historians in the Han Dynasty commented:
Qin annexed all lands within the bounds of the sea and conquered all the
princes. It then declared itself the emperor and protector of all people, and all
great people under the heaven welcomed its reign. Why? China had been
without a king for long time. The royal family of Zhou had declined, and the
five major powerful princes had died. No one heeded law and order. Princes
competed for dominance by their might; the strong oppressed the weak, and
those with superior manpower oppressed those with inferior manpower.
Warfare was incessant, and gentlemen as well as commoners suffered. Now
Qin became the king and held power over the earth. From now on there
would be a son of heaven over the people. The people’s life and livelihood
would be protected, [this is] why they all looked up to the ruler and submitted
to his authority (Sima1959, 283).

The people’s primary concerns were indeed their livelihood – their own
survival, security, and stability. If the regime had given them a chance to sustain and
improve their lives, support their families, and pursue their occupations, they would
not have abandoned a stable, sustainable life to support rebellion against the empire.
The rulers of Qin, however, ruthlessly exploited their subjects and destroyed their
hopes of leading a peaceful, sustainable life. Shortly after the founding of the
empire, the imperial government undertook massive construction projects around the
country: not only public infrastructures, but also palaces and imperial tombs, massive
projects that benefited the emperor and his family alone. Almost one third of the
empire’s available labor forces were conscripted for these construction projects –
without compensation paid to the laborers. At the same time, the rulers resorted to
48
oppressive means to maintain its control. A great number of laws were enacted to
govern all aspects of social life: from traffic to operation of businesses in each
industry – everything was governed by law. Punishments were severe for offenses:
even very minor offenses would subject the offender to cruel punishment. For
example, conscripts could receive a death penalty for reporting to duties late.
Excessive burdens on its subjects, coupled with overuse and abuse of laws and force,
gave rise to wide-spread resentment of the regime and resultant uprisings. The
empire was overthrown when the majority of those under its rule viewed it as a threat
to their survival and livelihood and desired to see its demise.
Successive imperial rulers learned the lesson: rulers should reign not by force
alone, but also by grace and mercy, so that the subjects would respect and depend on,
rather than hate the government. They chose Confucianism, a philosophical-political
framework advocating filial piety, propriety, sanctity of authorities, benign
authoritarianism, and social harmony, as the ideological “constitution” for successive
Chinese empires.
Confucianism was an essentially paternalistic political philosophy.
Confucianism in its ideal form could be articulated as follows:
… a sort of benevolent paternalism, in which there is supposed that the ruler
genuinely and deeply cares for his people just as a father does for his
children. Like a father in his family, the ruler determines what is best for
those under his care. He decides, and his subjects are supposed to follow his
charts, on the assumption that he has weighed their interests conscientiously
and concluded what is the most appropriate direction to take. In its ideal
form, paternalistic rule might qualify as a government for the people, but
never should it be thought of as a government by the people (Gardner 2007,
146).
49
Confucianism suited the need of imperial rulers for several reasons:
a. Confucianism justified the ruler’s authority by the mandate of heaven.
Pursuant to Confucius and his disciples, an emperor’s authority was derived from the
heaven and must be unconditionally submitted to (Gardner 2007, 81-82). Dong
Zhongshu, a Confucian scholar serving in the court of Han Wudi (156-87 B.C.) who
was primarily responsible for the establishment of Confucianism as China’s imperial
ideology, believed that unification of an empire under the “son of heaven” was the
“constant rule of heaven and earth and viable principle for the past and the present
(Shen 2008, 77).
b. Confucianism reinforced the hierarchical structure of imperial society.
Confucianism rationalized hierarchy as “the way of nature, as exemplified by the
different natural positioning between Heaven and Earth, high and low respectively”
(Jiang 2006, 28). Xunzi, one of the founders of Confucianism, stated,
Where the classes of society are equally ranked, there is no proper
arrangement of society; where authority is evenly distributed, there is no
unity; and where everyone is of like status, none would be willing to serve
the other.

Just as there are Heaven and Earth, so too there exists the distinction between
superior and inferior, but it is only with the establishment of intelligent
kingship that the inhabitants of a kingdom have regulations.

Two men of equal eminence cannot attend each other; two men of the same
low status cannot command each other – such is the norm of Heaven. When
power and positions are equally distributed and likes and dislikes are
identical, and material goods are inadequate to satisfy all, there is certain to
be contention. Such contention is bound to produce civil disorder, and this
disorder will result in poverty. The Ancient Kings abhorred such disorder.
Thus, they instituted regulations, ritual practices, and moral principles in
order to create proper social class divisions. They ordered that there be
50
sufficient gradation of wealth and eminence of station to bring everyone
under supervision. This is the fundamental principle by which to nurture the
empire (Knoblock 9.3).

c. Confucianism thus advocated that those in lower positions should
conscientiously obey and honor those in authority, while those in authorities must
take due care of those underneath their authority and use their power responsibly.
An emperor, in carrying out the heavenly mandates, should thus rule with virtue and
compassion by protecting the livelihood of his subjects, paying attention to moral
teaching, and burdening his subjects lightly. Also, peasants must be genuinely
respectful and obedient to their magistrates, while a magistrate, often referred to as a
“father-and-mother official,” was expected to “treat [the] local population with the
earnest concern they might devote to children under their care” (Mote 1999, 751).
Confucianism valued family and promoted filial piety, thereby contributed to
the stability of the society. Ancient Confucianism “highlights the kinship group as a
paradigm of social order – that is, as a network of intimately related roles” (Schwartz
1985, 21). The most essential tenet of Confucianism is filial piety, meaning
unswerving loyalty to one’s parents and genuine care for their welfare (Rosemont
2006, 11). As Mencius claimed, filial duty and reverence for the sovereign were
what distinguishes a human being from a beast (Gardner 2007, 72). Often one’s duty
to parents takes precedence over his duty to the community, even to the state.
Confucius himself so taught:
The Duke of She spoke with Confucius, saying, In our community there was
a certain ‘Mr. Upright.’ When his father stole a sheep, the son gave evidence
against him. Confucius said, in our community the upright are different from
51
this. A father covers up for his son and a son covers up for his father. This is
where uprightness is to be found (Gardner 2007, 39).

Zhu Xi (1130-1200 A.D.), a famous commentator on the Confucian Four
Books in the Song Dynasty, commented that “covering up that a father and son do
for each other is the ‘apex’ of heavenly principle and human emotion” (Gardner
2007, 39).
The prominence given to filial duty reveals that family is at the heart of
Confucian social order (Rosemont 2007, 12). From a personal perspective family
was the locus of “where, how, and why we develop into full human beings”
(Rosemont 2007, 12). From the social-political perspective family was the prototype
of the State, and filial duty “proceeds to the service of the ruler” (Legge 1899, 465).
Just as filial piety is required for children towards their parents and for the offspring
toward ancestors, subjects were required to revere and obey their rulers. Thus, a
subject’s obligation to support the imperial regime (represented by the person of the
emperor) acquired a naturalistic/moral dimension.
d. Confucianism highlighted personal virtues and provided a moral guidance
for the ruler as well as imperial officials. Confucius and his followers believe that “a
good society and a righteous government must start and hence be founded on the
moral perfection of the human person” (Cheng 2004, 124). From the Confucian
perspective, “not only do human beings realize their distinctive capacity by
upholding the social order and letting themselves be shaped by it, but their cultivated
character will also have a transformative effect on other human beings” (Shun 2004,
52
192). Officials, who carry out the responsibilities of administering the people on
behalf of the emperor, were supposed to be persons of impeccable moral character.
Moral cultivation was a pre-condition to becoming an imperial office holder. Ideally
a Confucian official was a superior man (jun zi), who was inherently truly good
(ren), righteous (yi), ritually appropriate (li), wise (zhi), and sincere (xin), who was
loyal to the emperor, filial to his parents, and loving to the people, who had few
desires and did not change in accordance with the environment.
An ideal model of a Confucian state consisted of:
Thousands and millions of peasants paying taxes at the rate of about ten
percent to the state; and a ruler who collected taxes through bureaucrats at all
levels, drafted soldiers to form an army to defend the empire and its subjects,
maintained the order of the hierarchical structures consisting of fathers
relations to children, and princes relationships to officials, enforced the rights
the ruler granted his subjects, and provided welfare to the society (Wu 2009,
236).

In this ideal Confucian society, the people’s interests in having their security
and livelihood protected were balanced against the ruler’s authorities over the
people. A ruler was expected to exercise self-restraint and act with benevolence
towards the people, while the people were supposed to obey and love their ruler.
Most of the Chinese rulers since Han Dynasty tried to model their societies
after the Confucian model. A great example was Emperor Hong-wu, the founding
emperor of the Ming Dynasty (1368-1644 A.D.). Ray Huang called the founding
principle of Emperor Hong-wu’s Confucian society “agrarian simplicity” (Huang
1981, 144). To ensure that his subjects’ tax burdens were reasonable, Emperor
Hong-wu proclaimed very light land taxes, and applied a progressive tax rate system
53
so that heavy burdens fell on the more affluent land owners (Huang 1981, 143). The
empire encouraged agricultural activities, but restricted industrial and commercial
undertakings. The empire maintained a small officialdom (with less than eight
thousand official positions at the time of its founding), and at the same time relied
heavily on communities, clans, and Confucian morality in maintaining the society’s
daily functioning. Ray Huang gave the following account of local communities in
early Ming Dynasty:
Under the Hong-wu emperor villages were organized into self-governing
communities, each drawing up its own charter to be patterned after the model
specified in an imperial decree. In every community two pavilions were
constructed: one to commend the good deeds of the residents and the other to
reprove evil-doers. In these pavilions the village elders arbitrated dispute
over inheritance, marriage, property holding, and cases of assault and battery.
The good and bad deeds of the villagers were also posted at those pavilions.

Twice a year, in the first and tenth lunar month, every community held its
local banquet. Attendance by all households was compulsory. Before food
and drink were served there were chants, lectures, and reading of imperial
laws, and the reprimanding of individuals who had committed misdeeds in
the village. A person who had committed an offense yet chose to absent
himself from the public denunciation was declared an “incorrigible subject,”
whom the village community must recommend to the civil government for a
sentence of exile to the frontier (Huang 1981, 142).

Emperor Hong-wu based the economic foundation of his empire on
agriculture in pursuance with the Confucian doctrine (Huang 1974, 2). Not only so,
he also attempted to institutionalize Confucian values such as filial piety, benevolent
authoritarianism, administrative simplicity, modesty, contentedness, hard work, and
stability. The result was two-fold. On the one hand, the Ming society cemented by
high authoritarianism, communal ties, bondage to land, and familial values were
54
super-stable. The dynasty lasted for almost 300 years. Yet on the other hand,
“[h]aving accepted Hong-wu’s concept of agrarian simplicity, the bureaucrats could
no longer actively stimulate and develop the more volatile sectors of the national
economy, which would have produced not only a different kind of managerial
system, but also a different political philosophy, a different set of laws, and different
office organizations” (Huang 1981, 144). Rather than being creative at improving
the society, they tended to care more about their status and the comfort of their
families, and their personal prospects of survival and advancement in the
bureaucracy.

The Imperial Officialdom
Confucianism did not provide ready answers regarding the practical wisdom
of governance. The reality was that a saga king, however virtuous he may be, did
not rule alone; he must exercise his power through the imperial officials. The
officials who exercised administrative power on behalf of the ruler indeed
determined the quality of administration in the empire. A virtuous but weak ruler
would not benefit his subjects very much if his officials were evil and corrupt, while
competent and moral officials would benefit the subjects even when the emperor was
mediocre in terms of personal morality.
Almost all pre-modern Chinese dynasties had to maintain officialdoms in
order to effectively administer the empire. The imperial officialdom, despite its
importance, was by no means large by modern standards. The following table
55
demonstrates the number of imperial officials in given years in Chinese history and
their percentage within the general population (Jian 1962, 102):

Table 1: Imperial Officials in Chinese History

Year Number of officials Population
Percentage of Officials
among the Population
2 A.D. (West Han) 132,805 59,594,978 0.22%
157 A.D. (East Han) 152,986 56,486,856 0.27%
609 A.D. (Sui) 195,937 46,019,956 0.42%
755.A.D. (Tang) 368,668 52,919,309 0.7%
1291 A.D. (Yuan) 16,425 59,848,964 0.13%
1474 A.D. (Ming) 80,000 61,852,810 0.13%

Also for example, the total number of civil officials in the early Qing
Dynasty was an insignificant 20,000 (Finer 1997, 1149). Ninety percent of these
officials were in the imperial capital – Peking, serving in various central government
agencies. Only slightly more than 2,000 officials were assigned to administrative
posts in the provinces. According to the figures in P.C. Hsieh’s The Government of
China, the distribution of these provincial and local officials was as shown in Table
2.
How did such a small number of officials manage to administer a vast
country like China? To take a county magistrate as an example: the average
population of a county at the end of the eighteenth century was some 200,000 (Finer
1997, 1149). The central government only provided him with no more than a
56
handful of aids: “one or two assistant magistrates, a gaol warden, and a few
miscellaneous officials such as postmaster, tax-collector, and granary supervisor”
(Finer 1997, 1149). “Such a staff was irrelevant. So vast – indeed limitless – were
the magistrate’s responsibilities and so extensive his territory that he needed a whole
battery of people to handle the paperwork, and even more numerous ‘runners,’ that
is, petty employees, to go and get the villagers do what was required of them” (Finer
1997, 1150).

Table 2: The Distribution of Officials in the Provinces

Level Number of officials
8 Viceroys, 15 Governors
18 Commissioners of Finance
13 Commissioners of Justice
(number unknown) Salt Controllers
Provincial Level
13 Commissioners of Grain
Tao (Circuit) Level 92 Intendants
185 Prefects (Chi-fu)
Fu (Prefecture) Level
41 Independent Sub-Prefects (T’ung-chi)
72 Chou Magistrates
Chou (City) Level
1554 County Magistrates
Total 2011

As a result, a group of off-the-budget government agents were relied upon for
fulfilling the administrative functions. Those people were the magistrate’s clerks, or
often referred to as “runners” who came from the lower class (Finer 1997, 1150).
57
Their numbers varied depending on the size of the county – there could be as many
as 1,000 clerks in large counties and as few as 100 in small counties (Finer 1997,
1150). The clerks/runners were the magistrate’s “teeth and claws.” They were,
however, not on the government payroll, so properly speaking these clerks were not
government employees. They survived on “customary fees” collected from the
populace for their “services.” “For instance, the clerks received fees, for ‘pen and
paper,’ for registering documents, for expediting cases, and for other matters which
... were ‘as numerous as the hairs of an ox’ ” (Finer 1997, 1151). Those customary
fees were through unspoken but repeated practices in the past, and were indeed
regulated by “hidden rules.” The government, however, connived with such
practices because otherwise it would have to raise taxes to pay those clerks. In an
agricultural society with limited industrial and commercial activities as revenue
sources, the only way to meet this hypothetical expenditure was to raise land taxes.
Who were eligible to serve as imperial officials? The traditional means of
selecting imperial officials was the civil service examination system, a highly
competitive examination system for selecting candidates for civil services to the
empire. Written examinations were administered at three levels: prefectural,
provincial, and imperial, with successful examinees at each level being awarded
degrees of licentiates. Although all degree holders were given superior status and
privileges (such as immunity from prosecution in the magistrate’s court without
being stripped of the degree by the provincial education commissioner, lighter tax
obligations, ceremonial privileges, etc.), normally only success in the imperial
58
examination at the national level opened the door toward civil service. Historical
data has demonstrated how rigorous the examinations were. For example, during the
Song Dynasty success rates were between 1 to 10 percent at the lowest level, at times
as low as 1 percent (Mote 1999, 129). The statistics on civil service examination in
the Qing Dynasty gave a detailed picture of the rigor of the system: in a typical exam
year, the minimum number of those sitting for the first degree (xiu cai) was at least
1,255,446 (Finer 1997, 1145). Among those people, eventually 238 got the jinshi
degree (Finer 1997,1145).
Thus, it took time, resources, and a lot of support to prepare for the civil
service examination. For example, “when Chang Chien of Jiangsu finally took top
honor at the Peking palace in 1894 he said he had spent 35 years preparing for
examinations and 160 days actually in examination halls. His was not an extreme
case.” (Fairbank 1986, 31). Indeed, one aiming at becoming an official through civil
service exams often had to start preparing at the age of seven or eight. A typical
example of one who survived the arduous exam-taking process and stood qualified
for an official post is one “about thirty-five years old who had spent at least a quarter
of a century in the strenuous discipline of classical scholarship. This made [him]
master of the Confucian morality, which sanctioned the exercise of power. When he
was appointed as an official, [he] would know the words and ceremonies that should
accompany [his] every act” (Fairbank 1986, 31).
Due to the tremendous investment in the preparatory process, some said that
the entire civil service examination system was bogus, favoring the wealthy and the
59
privileged (Finer 1997, 1146). But statistical data does show that “the system did
permit a degree of upward mobility” (Finer 1997, 1146). Finer’s research contained
the following data:
Over the entire Ch’ing (Qing) era, 19.1 percent of those prestigious chin-shih
(jinshi) came from families which had contained no degree holders at all over
the last three generations, and another 19.4 percent of them came from
families that had produced one or more first degree (sheng-yuan) holders but
not better; and only 505 came from families which had thrown up chin-shih
holders in the last three generations. So at least one-third of the chin-shih
(jinshi) came from families that had low or nil educational backgrounds over
the last 100 years (Finer 1997, 1146).

But as a general matter, one has to devote tremendous resources to scholarly
endeavor in order to succeed in the civil service examinations and to become an
imperial official. As a result, those who succeeded in the system were likely to be
indebted to many, including his family members, relatives, teachers, examiners,
same-year graduates, and all those who had helped or supported him (Fairbank 1986,
31). All of these people expected benefits and paybacks.
Imperial officials, however, were not well paid. Civil servants remunerations
were especially poor in Ming (1368-1644 A.D.) and Qing (1636-1911 A.D.)
dynasties. Emperor Hongwu, the founding emperor of the Ming Dynasty, modeled
his empire after the Confucian model of a self-sufficient, frugal, moral, and
agricultural society. His government was designed to “foster self-sufficient
communities and so to have the populace police themselves, the army to feed itself,
and the rural populace to provide the corvee labor for local roads and yamen
services” (Fairbank 1986, 43). Accordingly, official taxes were low, government
60
income was limited, and officials were paid only nominal salaries (Fairbank 1986,
43). The Qing government largely inherited its predecessor dynasty’s official
enumeration system. The amount of money paid to junior officials, like a country
magistrate, was barely sufficient to support the subsistence of the official and his
family. At the same time, imperial officials were given great prestige and serious
administrative power.
Actual expenses of an official far exceeded their official salaries. Just
consider the regular extra-budgetary expenses of a magistrate: those expenses
typically included “hiring private secretaries, a very highly paid class . . .
entertaining and making gifts to superiors; occasional capital levies to make good
some shortfall in tax income; and so forth, the total amounting to some 5,000 to
6,000 taels excluding the cost of the private secretaries, food, clothing, entertaining,
and per diem expenses” (Finer 1997, 1151). Comparing the actual expenses with a
magistrate’s meager salary, one would wonder how he could manage to make ends
meet. As in the case of local clerks (runners), a magistrate made up for his
budgetary shortfall through collection of customary fees: he could use his
discretionary authority to levy fees on every possible occasion and for every
conceivable function (Finer 1997, 1151), such as funding local administrative
functions or ad hoc projects. These fees “were neither legal nor illegal. They were
simply unofficial – customary, tolerated, and expected” (Finer 1997, 1151).
Imperial officials as a group therefore shared a number of commonalities:
they all received a solid education in Confucianism, shared the core Confucian
61
values, and were upholders of Confucian ethical and ritual codes. They were elites
in the society and were held to higher moral standards. At the same time, their
financial means, at least judged by the salaries they were paid, were not
commensurate to their prestige and power. Like all human beings, they also had
desires for a comfortable lifestyle. Like other Chinese, they lived in a complex web
of relationships which required maintenance. Indeed, the culture was such that an
individual must cultivate personal relations with others, not only superiors and
subordinates but friends at his own status level, all of whom might be of use at some
time (Fairbank 1986, 43). Maintenance of relationships required reciprocal conduct,
so that gifts and favors were constantly exchanged (Fairbank 1986, 43). Officials
were thus not only tempted, but sometimes pressured, to use his power to expand
their financial means, sometimes for the very purpose of staying in power.
The relationship between officials and the emperor was not always smooth.
Sometimes the emperor lost his trust in his top officials and attempted to establish
new institutions to circumvent them. For example, Emperor Hong-wu abolished the
position of prime minister in 1380 and instituted the Grand Secretariat to take its
place. However, when the Grand Secretaries’ power grew and the Chief Grand
Secretary eventually became the de facto Prime Minister, Emperor Yongzheng (in
power from 1722 through 1735) in the Qing Dynasty instituted the “Military Plans
Office,” also known as the “Grand Council,” for the purpose of circumventing the
Grand Secretariat so that the emperor could directly control imperial decision
making. Institutional reforms as such were not always successful as newly
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established institutions eventually became identified with the officialdom, and the
ministers serving in these institutions eventually lost their distinction and became
just well-rounded and self-serving like other career bureaucrats.

Corruption In the Imperial Officialdom
1. Bribery in the imperial officialdom
Regular “gifts” to one’s superior (often in amounts that were hundreds, even
thousands of times of an official’s annual salary) was a common practice in the
imperial officialdom. In fact, this was a “hidden rule.” Feng Erkang provides a
succinct summary of the gift-giving practices in the Qing officialdom. His research
revealed that imperial officials regularly gave gifts to their superiors, and local officials
regularly sent gifts to central government officials (Feng 1991, 2). In fact, there were
informal rules regulating the practice of gift giving, and gifts were given different names
depending on the positions of the involved parties and the occasions on which they were
given. For example, officials typically gave gifts to their superiors on traditional
holidays and the birthdays of their superiors and their spouses (Wu 2009, 152). Local
officials typically gave “transit gifts” (chengyi) to senior officials transiting through
their jurisdictions (Wu 2009, 152). There were many other forms of gifts, each
having a specific name, such as “winter gifts for coals” (tanjing), “summer gifts for
ice” (binjing), “farewell gift” (biejing), etc. It has been observed that a substantial
portion of the central government officials’ incomes were from gifts from provincial
and local officials (Feng 1991, 2).
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A provincial food administrator under Emperor Daoguang’s (in power from
1782-1850 A.D.) kept a record of the gifts he was obligated to give: gifts to the
General of Xi’an on “three festivals and two birthdays” amounted to 4,000 taels of
silver per year; gifts to military lieutenant generals on the same occasions totaled
2,000 taels; gifts to the Provincial Head of Shan’xi amounted to 1,300 taels per
quarter, 5,200 taels a year; gifts to the Governor on “three festivals and two
birthdays” amounted to 1,000 taels each time, 3,000 taels a year; other miscellaneous
gifts included gifts to other officials and the superior’s secretaries (Feng 1991, 2).
This official therefore had to pay at least 15,000 taels of silver in gifts per year,
although his annual salary was only 105 taels. Where did he get that much money?
In reality, the food administrator received gifts from his junior officials as
well. Thus, ultimately all the money circulating in the imperial officialdom was
collected from the people. County magistrates, who were charged with collecting
taxes from peasants and were given broad discretion in collecting additional fees for
local welfare, often kept a portion of the collected fees for themselves (Fairbank
1986, 43). At the same time, local gentries also sent gifts to county magistrates in
exchange for their favor and protection. An unscrupulous junior official who got
rich through public service would make generous gifts to his superior in exchange
for protection and patronage. As a result, senior officials got rich through gifts from
their unscrupulous subordinates. They also used gifts to secure the favor and
patronage from their own superiors.
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Lavish gift-giving in the imperial officialdom was often referred to as
“improper practice” (lou gui). Some rulers tried to use legal or institutional
measures to abolish this practice. For example, Emperor Hong-wu of the Ming
Dynasty (ruling from 1368 through 1398 A.D.) severely punished officials who gave
or received lavish gifts. Emperor Yong Zheng of the Qing Dynasties launched
reforms to legalize and publicize the fees and surcharges levied at the grassroots
level so that more revenue would be available to subsidize the officials’ incomes,
hoping that this would cure corruption, including lavish gift-giving, within the
imperial officialdom. None of these measures proved to be successful. It has been
observed that:
The ‘improper practice’ of gift-giving was an important measure to
redistribute incomes among the officials. Gift-giving not only functioned to
balance the officials’ incomes and to improve their job satisfaction, but was
also consistent with the social norms of Chinese society. Gift-giving helped
establish personal relational bonds among the officials. In other words, this
“improper practice” was the lubricant in the imperial officialdom (Liu 2008).

2. Extortion
Confucianism has a paternalistic ideal for government: the king and the
officials are supposed to love the people like their children, while the common
people are instructed to focus on their occupations and manage their families. Local
officials, who were supposed to take care of the welfare for the local commoners,
were often addressed as “parental officials.” In reality a local official, because of his
official status and almost absolute power over the commoners, was a formidable
figure to the commoners. The idiom among the commoners in the Ming and Qing
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Dynasties was that “a country magistrate could destroy a family, and a prefecture
could kill an entire family” (pojia de zhixian, miemen de fuyin).
The power of the officials over the commoners became a resource for their
self-enrichment, so were the clerks (runners), who relied on their affiliation with
official power to enrich themselves through customary fees. An imperial edict in
1736 maintained that “the ‘wicked clerks’ had pocketed for themselves the
equivalent of 20 to 30 per cent of the land tax” (Finer 1997, 1156). According to Wu
Si, the teeth of official power lay in the official’s ability to “legally inflict harm,”
meaning exercise of legal discretion in a seemingly lawful manner for the illegal
purpose of intimidation and extortion (Wu 2009, 6-8). One can easily find stories of
extortion in official and unofficial historical records. For example, according to Yao
Yuanzhi and Zhao Yi, two Confucian scholars in the Qing Dynasty, in Sichuan there
was a widely practiced lougui (improper rule) called Zeikaihua (thief screening),
pursuant to which officials would use the excuse of “screening accomplices” to
detain wealthy individuals living close to the crime scene whenever there was a
reported theft or robbery (Yao and Zhao 2007). In order to be released, the detainee
would have to pay a large sum of money to the officials to be “cleared.” “Thief
screening” indeed became a regular source of the local officials’ illegal income (Yao
and Zhao 2007). Another example was in Fang Bao’s What I Saw in the Prison, in
which the author recorded how prison guards and imperial executioners used cruel
tortures as a way to pressure the prisoners’ families to pay bribes (Fang 1983, 710).
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3. Patronage/Clientelism
Hierarchy in the imperial officialdom fostered a “brownnosing culture.”
Because senior officials’ favor and recommendation would greatly help a junior
official’s political career, and a senior official’s animosity would generally doom a
junior official’s political future, junior officials typically tried very hard to gain their
superior’s attention and win their favor. At the same time, senior officials also tried
to win the favor of the emperor, whose personal opinion would determine an
official’s entire career, even his life. Winning the favor of one’s superior, however,
was not always easy. As Chen Hongmou (1696-1771 A.D.) in the Qing Dynasty
observed, his peers were busy networking within officialdom and befriending their
superiors, but spent little time attending to official duties and paid little attention to
the welfare of the people (Kong 2007). Emperor Kang-xi (in power 1661-1722
A.D.) also chided his officials for their tendency to “form cliques to advance [their]
personal interests” and to give each other undue assistance and protection in order to
climb to high offices (Finer 1997, 1157).
A good relationship in Chinese culture has always been one that is less
formal and more personal. Therefore officials always tried to be connected with
their superiors through personal ties, such as common teachers, common geographic
ties, marital relations, etc. Indeed, “all the apparent rationality of selection and
grading, promotions and propitious postings depended not so much on what the civil
servant knew but whom he knew” (Finer 1997, 1157). When no personal ties were
available, junior officials sometimes tried hard to fathom the personal interest or
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hobbies of their superior in order to give the “right” gifts, say the “right” words, do
the “right” things, and even wear the “right” clothes in order to please them. For
example, Yan Song, one of the most powerful ministers/grand secretaries under
Emperor Jiajing (ruling from 1522 through 1566, A.D.), gained the emperor’s favor
by writing elegant Daoist “green prayers” and feigning interest in Daoism in order to
win the favor of the Emperor, a devout Daoist. The story was that when the emperor
gave Daoist caps to his grand secretaries, none of them were willing to wear them
except Yan Song, who wore his Daoist cap at the court meetings although the Ming
government had an official dress code for its officials and Confucian official-
scholars loathed Daoist styles (Mote 1999, 670). This was a significant gesture:
Yan Song had not only shown his respect for the emperor’s religious practices, but
more importantly, his unreserved deference to the emperor himself. As a result,
when the Chief Grand Secretary fell out of the emperor’s favor and was removed
from the office, Yan was chosen as his replacement, although eventually Yan also
fell out of the emperor’s favor and was removed.
A more extreme example relates to Wei Zhongxian, a powerful eunuch under
Emperor Tian Qi (ruling from 1605 A.D. through 1627 A.D.). Trusted and relied on
by the young emperor who was not interested at all in his official duties, Wei
essentially represented the emperor to his ministers. To please Wei, local officials
even offered to build “living shrines” for Wei, encouraging people to worship Wei in
a manner similar to ancestor worship (Spence 1990, 17).
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Yan’s case and Wei’s case, though extreme, indicate the extent of the
brownnosing culture in the imperial officialdom. In this hierarchical structure, an
official’s political advancement and welfare depended upon those above him and
others within his circle of personal relationships (Fairbank 1986, 43). He would
have no incentive for considering the welfare of those below him and not within his
circle (Fairbank 1986, 43).
4. Fractional Strife
Liang Qichao, one of the reformers living through the end of the Qing
Dynasty and the beginning of the republican area, once commented that social
relations in Chinese society were so “atomized” that the Chinese people, in effect,
became parochial, close-minded, and lacking in a basic sense of collective identity
and public morality (Sullivan 2006, 176). Liang’s observation accurately reflects
politics in the imperial officialdom, where officials fought not for the public
interests, but for the interests of their particular political factions.
Factionalism emerged when different groups in the officialdom competed for
influence, royal favor, and power of leading figures of particular factions in the
interest of those who depended on the faction leaders for their own interests and
agenda (Fairbank 1986, 43). Factions could be based on ideological and political
views, familial ties, loyalties, even geographic origins. Mote studied the politics of
the early Qing Dynasty and observed that “[r]egional or local factors such as shared
dialects and parochial cultural traditions were the unifying factors in geographic
factionalism” (Mote 2000, 882). Mote analyzed the root of factional strife between
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Chinese officials from northern and southern regions, and made the following
observations:
The banner-based Manchu factions all had to work with Chinese officials,
and they favored northerners. The relationship developed early because the
northerners were on the scene when the Manchus invaded; they were useful
for their knowledge of the capital region and its historic relations with Inner
Asia, and they were accepted as trustworthy. The favored Chinese
northerners in turn vigorously protected their dominant position and tried to
prevent southerners, whose strong performance in the civil service
examinations gave them a much larger number of potential appointees to high
offices, from gaining important posts in the central government. [E]ventually
those southerners in the court were called the “southern party” (nandang).
That of course led to labeling the northerner Chinese officials at court the
“northern party” (beidang) (Mote 2000, 882).

The vices of fractional politics were obvious: factional rivalry diverted the
attention of officials from administrative tasks to political struggle, consumed a lot of
resources, caused discord among the elites, and distorted the government’s decision
making process. However, the rulers (emperors) often tolerated factionalism,
sometimes even used factionalism to fortify their imperial power. Because
competing political factions needed an arbitrator, the emperor often played the role
of balancing different factions so as to limit the influence of any particular individual
or group, to gather information from different sources, and to enhance their own
prestige and importance (Mote 2000, 883).
Factionalism is closely related to other forms of corruption, such as bribery,
clientelism, nepotism, obstruction of justice, and illegal profiteering. Factionalism
also made anti-corruption more difficult. Those officials belonging to the same
political faction often protect each other. As a result, those fighting corruption and
70
trying to incriminate corrupt officials might end up fighting a whole network of tens,
hundreds, even thousands officials bound by factional ties. Corrupt officials
therefore often hid behind factional politics for their own protection.
Charges of corruption are sometimes used as weapons in factional politics.
Corruption-related charges are often brought as a pretext to defame, damage, or even
to destroy a rival faction.

Adaption of Ideologies, Institutions and Systems
The relation between the imperial ideology/politics and corruption in pre-
modern Chinese empires is an interesting research topic, especially in light of the
empire’s practical need to survive, and to maintain its stability and security. In this
section, the author intends to analyze the connection between imperial
ideology/politics and corruption from four angles: power distance, amoral familism,
strategic/particularized trust versus generalized trust, and lack of public ethics.
1. Great Power Distance
Power distance is defined as the extent to which the less powerful members
of the society expect power to be distributed unequally (Hofstede 1991, 28). The
following table excerpted from Hofstede’s book describes symptoms of great power
distance.
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Table 3: Symptoms of Power Distance (Hofstede 1991, 37)

Small power distance Large power distance
Inequities among people should be
minimized
Inequalities among people are both a
expected and desired
There should be, and there is to some
extent, interdependence between less
and more powerful people
Less powerful people should be
dependent on the more powerful; in
practice, less powerful people are
polarized between dependence and
counter dependence
Parents treat children as equals Parents teach children obedience
Children treat parents as equals Children treat parents with respect
Teachers expect initiatives from
students in class
Teachers are expected to take all
initiatives in class
Teachers are experts who transfer
impersonal truth
Teachers are gurus who transfer
personal wisdom
Students treat teachers as equals Students treat teachers with respect
More educated persons hold less
authoritarian values than less educated
persons
Both more and less educated persons
show almost equally authoritarian
values
Hierarchy in organizations means an
inequality of roles, established for
convenience
Hierarchy in organizations reflects the
existential inequality between higher-
ups and lower-downs
Decentralization is popular Centralization is popular
Narrow salary range between top and
bottom of organization
Wide salary range between top and
bottom of organization
Subordinates expect to be consulted Subordinates expect to be told what to
do
The ideal boss is a resourceful democrat The ideal boss is a benevolent autocrat
or good father
Privileges and status symbols are
frowned upon
Privileges and status symbols for
mangers are both expected and popular
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Highly hierarchical, a traditional Chinese empire is a typical high power
distance society. Within the hierarchical structures those occupying lower positions
were required to be obedient and pay respect to their superiors, while the authority
holders were expected to care about the interests of those beneath them.
Because families, communities, and governments in pre-modern China were
highly hierarchical, effective oversight over power-holders was almost impossible.
This was particularly true, because in a hierarchical structure those in higher
positions were given immense discretionary power, and had the authority to make
decisions for those beneath them within the existing power structure, while those
occupying lower levels were afraid of even expressing their concerns. The system
“required a sense of moral community exemplified in an orthodox ideology and
upward-looking commitment to an established leadership with one person at the top”
(Fairbank 1986, 44). At the same time, the masses were expected to be passive
(Fairbank 1986, 43). Although Confucian ethics required an official to act
responsibly with respect to those under his power, if one chose not to do so, there the
masses would have little institutional recourse. Thus one can fairly say, conceivably,
the higher one’s position, the fewer restraints were imposed upon them.
2. Amoral familism
The most important value of in traditional Chinese society was probably filial
piety, meaning unswerving loyalty to one’s parents and genuine care for their
welfare (Rosemont 2006, 11). The imperial government did indeed enforce filial
duties. For example, the Statute of the Tang Dynasty (codified around AD 650),
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which served as the model statute for later dynasties, prescribed stiff penalties for
committers of “unfilial acts” including the following:
… sons who curse or beat their parents or report their crimes to the
authorities should be executed; those who disobey their parents’ orders or
materially support them in a deficient manner should serve two years of penal
servitude; those who have separate household registers (i.e. live apart) from
their parents or keep private goods should serve three years of civil servitude;
and those who fail to marry according to their parents’ wishes should receive
one hundred strokes with a heavy stick. The state even makes sure that a son
should respect his dead parents’ authority; hence, if he conceals his mourning
before the appropriate time or forgets his grief and makes music, he should
serve three years of penal servitude; if he has children while mourning, he
should serve one year; and if he marries, three years. (Knapp 2006, 65)

For another example, since the Han Dynasty it was mandatory that officials whose
parents passed away must withdraw from their posts and undergo three years of
mandatory mourning. Exception were allowed only in cases of “genuine state
emergencies in which it could be said that the bereaved son sacrificed his primary
interest (his obligation to his ancestors) in order to serve his sovereign” (Mote 1999,
732).
The exercise of filial duty was closely related to the Confucian view that
family was the locus of “where, how, and why we develop into full human beings”
(Rosemont 2007, 12). From the social-political perspective family was the prototype
of the State, and filial duty “proceeds to the service of the ruler” (Legge 1899, 465).
The emphasis on family and filial duties to parents led to the further
veneration of ancestors, and affinity between those sharing ancestral ties. Indeed, the
Chinese stressed their links to their founding ancestors. The ancestors’ graves
tended to tie the descendents to that place. As a result,
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[m]any successful families that moved their relatives temporarily to the
capital, or to provincial places where their bureaucratic elders were assigned,
maintained a branch of the family at their rural point of origin. They
continue to own land there, and maintained family shrines and lineage
properties (often including endowed schools) at those sites, thereby
perpetuating their close links to a rural village or town. Every individual’s
identity, as given in official and in ordinary social contexts, included the
name of his or her lineage’s place of census or registration. The ties of that
shared “native place” (whether or not the individual had actually been born
there) were fundamental to social relationships. (Mote 1999, 764)

The practical implication of common ancestry is the duty of care between
people belonging to a same lineage and clan. It is moreover the norm, not the
exception, for families that are well-off to have relatives of modest or even poor
means within their immediate lineages (Mote 1999, 764). As a result, the lineage or
clan “functioned as the achievement group within which some measure of
responsibility for poor relatives had to be met” (Mote 1999, 764).
Traditional emphasis on loyalty to family could in some circumstances
conflict with one’s concern for those outside the family (Wong 2004, 43). After all,
Confucianism believed in “graded affection, in which it is believed that the degree of
love one feels toward another depends on the closeness of the particular relationship”
(Gardner 2007, 73). Universal love which was based on equality was considered a
repugnant concept for its denial of filial duty (Gardner 2007, 70). Indeed, strong
familism led to partiality, which compromised public interest (Wong 2004, 43). An
official serving in the pre-modern imperial government had to often draw a fine line
between what was legitimate help to one’s relatives and what improperly encroached
upon his integrity as an office holder. As Hall and Ames have observed, Confucian
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ethics “is liable for continuous disagreement as to when the line between a rightful
loyalty to family has crossed the line into nepotism and special privilege” (Hall and
Ames 1987, 308-09).
3. Particularized trust
Generalized trust is universalistic in nature and rests on the foundation of
openness rather than personal favoritism or self-interest (Uslaner 2005, 77).
Personalized trust, including particularized trust and strategic trust, in contrast, is
based on personal relations or day-to-day experiences with specific people (Uslaner
2005, 77).
Personalized rather than generalized trust was the predominant mode of
interpersonal trust in pre-modern China. There was no teaching by Confucius or
Mencius regarding generalized trust. In the Confucian classics, trust was always
mentioned in the context of particular duties and relationships. In practice trust was
always based on some kind of personal tie such as familial connection or mutual
friendship. Even among one’s personal connections trust is graded in accordance
with the closeness of the relationship. For example, trust between direct family
members is presumably stronger than that between remote relatives or friends.
Strategic trust supplemented particularized trust through the practice of
guanxi (personal connection). By practicing guanxi, one of lower status could access
people of higher status through friends who have familial or other ties to the wealthy
and powerful, while one at the same time makes his social network available at one’s
friend’s demand (Jia 2006, 49). Trust is essential to the practice of guanxi because
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without believing in another person’s willingness to return a favor extended today,
one would not have extended the favor. Once the initial experience proved to be
good and trust was built, it was expected that the parties would build further on their
mutual trust so that the “trusted relationship” could be reutilized in the future. Trust,
therefore, was the cement for guanxi and must be proven, and repeatedly proven
through repeated transactions and one’s persistence in returning the favor. Because
trust was so essential to building relationships and mattered tremendously to one’s
success, anyone with ambition was always careful in terms of building his reputation
and trust with those that one wanted to associate with.
Guanxi necessarily discriminated against the outsiders in favor of the
insiders. Indeed, this insider/outsider division underlay all traditional politics: while
insiders were treated like family members and were entitled to share the resources of
the network, outsiders were not accorded the same treatments. They were deemed
strangers, competitors, and sometimes enemies.
4. Virtuous Approach to Administrative Ethics
Administrative ethics is essential to a clean and just government.
Administrative ethics goes beyond personal morality and provides ethical principles
and frameworks for analyzing competing interests:
Operating within the government imposes upon individuals certain loyalties
and obligations, which may sometimes come into conflict with [the official’s]
personal ethical preferences. Loyalties to one’s superior, one’s agency, one’s
professional standards, the Constitution, and the less clearly defined “public
interest” all may compete for the administrator’s attention (Burke and Richter
2007, 5).

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Thus, even if the personal characters of individual officials are critical to
administrative ethics, administrative ethics cannot be based on personal character
alone. Personal moral sensitivity comes from one’s feeling based on one’s character,
rather than an impersonal analysis of the situation alone (Svara 2007, 22). Although
personal character is undoubtedly very important, an ethics system relying on
character alone is inadequate in coping with complex situation. As Svara has
correctly pointed out:
An administrator may want to be good, but does he or she know how to do
good, i.e., what actions are appropriate for reach of the virtues. Definitions
of virtues may be circular. For example, Mayo (in Sommers, 1985, 172)
defines the virtues of justice as ‘a quality of character, and a just action is one
such as just man would do.’ To decide what a just man would do without
consulting a principle of justice (or even considering what consequences
would be ‘fair’) is difficult. In addition, how does one choose among
alternative virtues which may lead to act in different ways, i.e., choosing
between competing ‘goods’? (Svara 2007, 22)

At least two mechanisms must be added to personal character to ensure that a
government operates up to ethical standards. First, principle-based ethical analysis is
an important internal mechanism which assists an administrator in making decisions
in individual cases. Under this approach, “administrators must have a set of
principles and the deductive capacity to appropriately apply those principles to actual
situations” (Svara 2007, 22). Secondly, accountability is an external, supervisory
entity to ensure conformance of individual and organizational behavior to ethical
standards. Ruth Grant and Robert Keohane have given the following definition of
accountability:
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Accountability, as we use the term, implies that some actors have the right to
hold other actors to a set of standards, to judge whether they have fulfilled
their responsibilities in light of these standards, and to impose sanctions if
they determine that these responsibilities have not been met. The concept of
accountability implies that the actors being held accountable have obligations
as to act in ways that are consistent with accepted standards of behavior and
that they will be sanctioned for failure to do so. (Grant and Keohane 2007,
42)

An ideal accountability system is multi-dimensional, encompassing hierarchical
accountability, supervisory accountability, fiscal accountability, legal accountability,
market accountability, peer accountability, and public reputational accountability
(Grant and Koehane 2007, 42).
In light of the above, the government ethics system of imperial China was
grossly inadequate. The tendency was to rely on virtue/character rather than
principles and law. Ethical conduct, as Confucian scholars believe, results
not from one’s effort to conform to external norms, but from his good
character. Not surprisingly, judged by its success in meeting the demand for
a general decision procedure, Confucian ethics fares quite badly (Norden
2004, 172).

Indeed, under the traditional Chinese virtuous administrator model, personal
morality and public ethics were not distinguishable from each other and there were
no clear standards and principles guiding the practices in conformity with these
ideals.
Furthermore, accountability systems in imperial China was single-
dimensional and seriously flawed. Only one form of accountability mechanisms
existed in pre-modern China – supervision by the superiors. An official was not
supposed to be accountable to and supervised by the public. He was only expected
to take care of them. The masses had no right and power to look into the decision-
79
making of the officials. As a result, to avoid being punished for misconduct, an
official need only to buy out his superiors, which was easy to do for reasons
discussed above.

When Corruption Threatens Survival, Stability, and Security
As discussed above, to keep an empire unified and to ensure its survival,
stability, and security, imperial rulers in ancient China chose the Confucian
government model, which anchors good governance on the virtue and self-constraint
of the ruler, and his ability to protect the livelihood of his subjects. Confucianism,
which emphasizes hierarchy, filial piety, personal virtues, benevolent sovereignty,
and frugality, was established as the imperial ideology. Imperial officials, who were
well trained Confucian scholars, were employed in administering the empire on
behalf of the ruler.
Also as discussed above, Confucianism as the imperial ideology embodied
certain traits or tendencies that were conducive to corruption. Among them,
Confucianism’s high view of authorities, sanctification of familism, endorsement of
particularized trust, and exclusive reliance on individual morality and character to
ensure ethical conduct, contributed to the institutionalization of corruption in pre-
modern Chinese. Despite these inherent traits and tendencies, Confucianism
remained the favorite ideology of the imperial rulers.
The Confucian governance model supported many great dynasties, although,
as history illustrates, none of these great dynasties persisted forever as their founders
80
had wished. There was a repetitive pattern of great dynasties going through the cycle
of reform-prosperity-crisis-decline-demise. New dynasties repeated the fate of the
previous ones, and rampant corruption typically accompanied the fall of each great
dynasty. Some great dynasties, such as Tang and Ming, were actually overthrown by
peasants revolting against oppressive officials. What was behind the fall of a
dynasty? What was the role of corruption in this process?
The analysis must start with the components of the dynasties: the emperor,
the officials, and the subjects.
1. The emperor
An emperor is the only “owner” of the empire. As such, he is primarily
responsible for holding his empire together, and ensuring the survival, stability, and
security of the regime.
With the exception of founding emperors of dynasties, emperors received
their positions and duties through hereditary succession. Pursuant to the Confucian
doctrine of filial duty, an emperor could not easily change the rules, policies, and
institutions established by predecessor emperors.
Most of the founding emperors in Chinese history were good at drawing
lessons from previous regimes and appreciating the importance of a clean
government to the livelihood of the people and the survival, stability, and security of
the empire. Furthermore, because most emperors were potent military leaders and
experienced power manipulators, they were good at choosing good advisors, and
were not hesitant to use rigorous, even cruel measures to punish corrupt officials.
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Therefore, corruption was often under control when the founding emperor of a
dynasty was in power. For example, the founding emperor of the Song Dynasty
enacted a law that prescribed the death penalty for officials who embezzled six taels
of silver (equal to about U.S. $100 in today’s value) (Wang and Liu, 2002, 86).
Emperor Hong-wu, the founding emperor of Ming, ordered that any officials who
embezzled eighty taels of silver (about U.S. $ 4,000 in today’s value) would be
sentenced to death (Wu 2009, 143). Moreover, after a corrupt official’s execution,
his skin would be peeled off, filled with hay, and put on public display (Wu 2009,
143).
Successive emperors, who typically did not command the same level of
competency and political will as their forefathers, tended to be more lenient and less
effective in dealing with corruption. Because the imperial governmental structure
was essentially one person (the emperor) ruling over the multitudes (the officials and
the masses), the ruler’s lack of competency immediately created opportunities for
corrupt officials. Indeed, how would an emperor find out about corruption within
officialdom, unless he was informed by his officials. Even if an emperor knew about
corruption in his officialdom, what could he do if the entire officialdom was corrupt?
There is an answer to this in the History of Ming. In 1628, the new emperor
Chongzhen, the last emperor of Ming, called on his officials to cling to the principles
of “civil officials should not care for money, [and those commanding the military]
should not fear death.” Han Yiliang, then an imperial inspector in the Ministry of the
Treasury, reported to the emperor the real practices in the imperial officialdom: to be
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secure in an official position, an official would have to spend money on gifts for his
superiors, bribe various central government ministries and agencies, show hospitality
to fellow officials passing through their jurisdictions, etc. As a result, an official
would incur thousands of taels of silver (each thousand taels of silver was about U.S.
$5,000 in today’s value) each year to cover these expenses – all out of his own
pocket. How would it be possible for an official to “not love money?” (Zhang 1974,
Vol. 258). Pleased with Han’s candid report, Emperor Chong Zhen intended to
promote Han and ordered him to make a further report as to the identities of those
officials who had engaged in corrupt practices. Han, however, refused to accuse any
particular official in his report. Indeed, as an imperial official, the risk of losing
credit with his peers and being ostracized carried consequences comparable to those
resulting from offending the emperor. Eventually Han was removed from his
position, and the emperor dropped his investigation (Zhang 1974, Vol. 258).
Han Yiliang’s case illustrates the weakness of the emperor in front of his
officialdom: he had authority over his officials, but at the same time had to rely on
them to rule the country; he could punish individual officials, but could not afford to
alienate the officialdom, nor did he have the power to change its practices.
Corruption, such as bribery, factionalism, self-enrichment, clientelism, and cronyism
were often simply tolerated, and individual practices particularly, fell within the
“hidden rules” of common practices within officialdom. Corrupt officials were
punished in only the most egregious cases, or in connection with other offenses that
the emperor deemed unforgivable and readily punishable.
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In order to effectively control, or circumvent the officialdom, the emperor
sometimes chose a number of officials he liked or would like to trust. However,
imperial favoritism often resulted in enhanced power and privileges for individual
officials, which led to vicious corruption.
2. The officials
As discussed above, imperial officials constituted a special interest group
within the empire. Though holding administrative power, they were not owners of
the empire. They were mere agents, exercising power on behalf of the emperor. As
such, their personal interests were not perfectly aligned with those of the rulers.
While the emperors relied upon them to ensure the survival, stability, and security of
the regime, the officials were naturally more concerned with their own survival,
status, prestige, financial security, and the interests of their offspring.
Though trained to be moral, responsible, and incorruptible, practical concerns
often tempted an official to follow corrupt and deviant practices rather than cling to
their ideals. Poor income from official compensation, practical needs for socializing
with peers and gift-giving to superiors, moral obligations to help and support
relatives, uncertainty about post-retirement financial security, and concerns about
“face” and prestige – all impacted an official’ decision regarding whether to reject
bribes, to exercise his legal power to help his benefactors, etc. Indeed, to be
incorruptible came with a price. Hai Rui, a vice minister in the Ming Dynasty
famous for his loyalty to the emperor and his resistance to corruption, was so poor at
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the time of his death that his household could not come up with enough money to
pay for his burial (Wu 2009, 45).
Since effective supervision of official power was scarce, the only effective
defense against engaging in corruption was the official’s own moral conscience.
Once an official succumbed to temptation and started to engage in corrupt
misconduct, it is likely that he would feel less guilty in engaging in subsequent
corrupt conduct.
The officials’ power was essentially unsupervised. It was impossible for the
emperor to oversee each and every one of his officials. The imperial, “official
supervision mechanism,” such as the imperial censorate system, was not always
effective because the censors were themselves imperial officials. As such, they were
subjected to the same temptations and pressures for self-enrichment as other imperial
officials. Indeed, because of their power and position, imperial censors were
constantly offered bribes. Many actually succumbed.
3. The people
Commoners were powerless in pre-modern China. However, when
commoners were united in opposition to the imperial regime, the empire, even a
most powerful one, could not withstand such opposition. The imperial empire
therefore adopted a dual-mechanism to ensure its survival, stability, and security: it
instructed its officials to treat the commoners like children to protect their livelihood,
so that the commoners would support the regime; at the same time, it prescribed
severe and cruel penalties against those who dared to challenge the authority of the
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empire and the ideology that supported it. For example, after the late Song Dynasty
through the Ming and Qing Dynasties, those who organized or attempted to organize
rebellions against the empire were sentenced to death by lingchi (cutting into
thousands of slices) (Cao 2008, 34-35). Offenders of serious crimes against the state
sometimes saw not only themselves, but also their family members, relatives, even
teachers, students, and friends executed together with them (Cao 2008, 35).
Realizing that the empire’s survival, stability, and security depended on the
livelihood of its people, rulers tended to set tax rates at moderate levels in order to
give commoners some “breathing room.” For example, upon founding the Ming
Dynasty, Emperor Hong-wu lowered the statutory taxes to only one-fifth of the
previous dynasty (Huang 1974, 24, 25, 38 and 46). The subsequent Qing Dynasty
inherited the Ming policy of low taxation. By the end of the Eighteenth Century
official taxes collected by the imperial government of Qing amounted to no more
than 5 percent of the GDP (Naquin S. and Rawski E. 1987, 219).
Officials, however, frequently took advantage of the situation in search for
opportunities for self-enrichment by imposing non-statutory fees and surcharges on
the peasantry. Lower statutory tax rates created room for exploitation because
peasants would still be able to maintain their subsistence after paying statutory taxes
and non-statutory fees and surcharges. As a result, charges of non-statutory, often
illegal fees and surcharges became a routine practice in ancient China. The practice
was so prevalent and well-known that Emperor Yongzheng (in power 1722 - 1735)
had to launch fiscal reform efforts to streamline the imperial taxation system and
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formalize the various surcharges and fees local officials imposed (Spence 1990, 76-
77). Local officials were required to contribute whatever they collected in non-
statutory fees and surcharges to a pool of fund, from which the government would
pay “honesty-nourishing money” (income supplements) to officials (Finer 1997,
1158). The hope was to curb corruption and alleviate the burdens on the peasants by
creating a visible, steady source of revenue to be used specifically to pay higher
salaries to government officials and to provide for local expenditures. The reform
was successful only on a short-term basis. Just decades later, during the reign of
Yongzheng’s son Emperor Qianlong, “the old abuses of extra fees, payments, and
illegal surcharges crept back in” (Spence 1990, 99).
Among all forms of corruption, illegal fees and taxes did most harm to the
commoners, especially the peasants. These practices often developed during times
of peace and prosperity. While the officials saw these fees and taxes as an important
source of extra income, the commoners chose to endure the practice when those
extra fees and taxes did not pose a direct threat to their livelihood. As time went on,
the practices of collecting illegal fees and taxes were routinized and became informal
rules.
However, when the empire was in trouble and needed to increase taxes to
cope with crisis, illegal fees and taxes became a vicious threat to the livelihood of
peasants. When their survival was under threat, commoners would withdraw their
support of the regime. Sometimes they even rebelled against the state.
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To give an example, during the reign of Emperor Chongzheng in the Ming
Dynasty, serious droughts resulted in extreme food shortages in many parts of China,
while the empire also had to defend itself against the Manchurians to the North. A
few years after the young emperor took the throne, a major peasants’ rebellion broke
out in northwest China. To raise funds for disaster relief and to support the imperial
military, the empire increased taxes on four occasions, the last of which occurring
five years before the demise of the empire (Wu 2009, 165). Before finalizing its
decision on the last tax increase, the emperor consulted with his ministers and drew
the conclusion that the planned increase was moderate and would not threaten
people’s livelihood. In reality, the emperor did not take into account the
commoners’ ongoing obligations to illegal fees and taxes which was then a
routinized portion of their tax burdens. Indeed, by counting the customary fees and
taxes collected by the local officials, one would reach the conclusion that the tax
increase would be the last straw on the already overburdened populace, crushing any
hope they might have had of being able to survive. As a result, a lot of peasants
joined the rebellion against the empire. The emperor was indeed facing a dilemma:
he increased taxes in order to save the regime. However, the more taxes he imposed,
the more people rebelled, thereby aggravating the existing threats to the regime (Wu
2009, 171). Eventually the regime was crushed, by the people who languished under
its reign – largely because of official corruption.

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The Dilemma of “Clean Officials (qingguan)”
Not all imperial officials were corrupt. Legends of “clean officials”
(qingguan) were found in both Chinese folk traditions and official histories, such as
the story of Bao Zheng, the prefect of the imperial capital in the Song Dynasty (960-
1279, A.D.), and Hai Rui, a medium-ranking official in the Ming Dynasty. Those
legendary virtuous officials shared certain commonalities: they clung to high moral
standards and strove to be impeccable in their conduct, showed compassion for the
commoners (especially peasants) while remaining absolutely loyal to the emperor,
and were courageous to confront corrupt officials and corrected their wrongs.
For example, Hai Rui, an orthodox Confucian, was known for his zealous
advocacy for Confucian moral standards, and his resistance to corruption was fueled
in large by his zeal for upholding Confucian orthodoxy. He endured poverty and
refused to sacrifice his integrity in exchange for comfort, thereby illustrated the
Confucian ideal of “not to be changed by poverty,” an important virtue of a
Confucian gentleman. Upon his death, his friends found that his personal assets
amounted to less than twenty taels of silver – not enough to pay for a decent funeral.
Even Hai’s political enemies admitted that Hai was a person of moral integrity, even
moral austerity.
Hai Rui not only applied high moral standards to himself, he frequently
confronted those who bent standards and rules without fear of retaliation from those
in higher positions (Huang 1981, 130-139). For example, an incident in 1560
involved Yen Mao-qin, a senior official and a confidant of the then highest-ranking
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and notoriously corrupt grand secretary Yan Song. Upon receiving an imperial
commission to tour the southern provinces for the purpose of reorganizing salt
gabelle to raise additional funds to meet mounting military expenditure, Yen, who
was known for his love of gifts and extravagant feasts and entertainments, issued a
pretentious circular letter to local officials claiming his preference for simplicity and
admonishing against lavish meals and ceremonies (Huang 1981, 152). Knowing that
Yen would pass through his jurisdiction, also knowing Yen’s love for gifts and
extravagance, Hai Rui wrote a lengthy letter to Yen, using Yen’s own circular letter
to illustrate inconsistencies between his words and previous practices, urging Yen to
stop extravagance and to honor his own words (Huang 1981, 153). Upon reading
Hai’s letter, Yen Maoqin took a detour to avoid Hai’s jurisdiction on his remaining
trips.
A more dramatic move was Hai’s letter criticizing Emperor Jiajing. At the
time this happened, Emperor Jiajing, who had ruled the empire for four decades, was
mainly interested in Taoist practices in seeking of longevity and neglecting his
imperial duties. He devoted limited attention to imperial affairs, restricted his
personal contact to a handful of sycophants, and constantly made decisions based on
false information (Huang 1981, 135). Despite his mistakes, “he fancied himself to
be one of the greatest rulers in history” (Huang 1981, 135).
In his memorial to the emperor, Hai Rui bluntly criticized Jiajing and held
him directly responsible for the sorry conditions of the state” (Huang 1981, 135).
“The monarch was described as vain, cruel, selfish, suspicious, and foolish.
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Excessive taxation, widespread government corruption, exorbitant palace spending,
and rampant banditry were cited in detail to justify the charges” (Huang 1981, 135).
Hai Rui nonetheless petitioned the emperor to reform. “All that is needed,” Hai
assured the emperor, “is a change of heart on Your Majesty’s part” (Huang 1981,
135). Before Hai submitted his memorial, he anticipated that he would be executed
for offending the emperor. As a result, he purchased a coffin and said goodbye to his
family.
The emperor was offended, but he knew Hai Rui was loyal (Huang 1981,
135-36). As a result, Hai Rui was arrested and imprisoned, but not executed. He
was not released until the emperor’s death about a year later. When the message of
the emperor’s death and his release reached Hai, he did not celebrate his freedom,
but wept and vomited for the death of the emperor (Huang 1981, 136).
Hai’s remonstrance to Jiajing Emperor won him high prestige among the
Confucian officials as a person of high moral standards and absolute integrity. In
1569, shortly after Emperor Jiajing’s death, Hai was appointed governor of South
Chihli, an important province encompassing the richest regions of the empire (Huang
1981, 137). Hai served in that position for only a year – until 1570. The major cause
of Hai’s downfall was his unsuccessful effort to intervene in the local land tenure
system, which had been abused by large land holders and moneylenders. Hai hoped
to restore wrongfully seized land to dispossessed peasants. Despite his good
intention, Hai’s campaign failed due to both resistance from the local gentry and lack
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of careful administrative planning and implementation that match his ambition. For
example:
The governor made no survey of the field conditions existing before he
launched his one-man campaign. No new legislation was proclaimed. No
apparatus was set up to investigate cases, returning verdicts, or reviewing
appeals. By handling cases himself Hai enabled the petitioners to bypass his
prefects and magistrates. Furthermore, he even permitted the reopening of
cases beyond the five-year statutory limit, on the ground that when a takeover
was not specified by written contract the statutory limit did not apply. Even
though he held that in only one case out of every twenty he had ruled in favor
of the original owner, this fact hardly made his administering of justice more
feasible from a procedural point of view (Huang 1981, 140).

As a result, Hai was impeached. The impeachers depicted Hai as someone
with “enormous ambition but diffuse talent” (Hai 1981, 141). Following his
impeachment, Hai resigned. It was not until fifteen years later did he receive an
appointment again. At the time of seventy-two, Hai was given the position of
assistant head of the censorate in Nanjing, the Ming Empire’s southern capital that
served ceremonial rather than substantive functions. Indeed, due to Hai’s austerity in
literally following Confucian tenets and fearless confrontation with his peers whom
he viewed as deviant from Confucian orthodox, he was viewed as “very rude, very
brusque, and very demanding” (Huang 1981, 136). The empire needed Hai as a
moral icon, but also feared to give him substantive official functions because he
would not be compatible with his peers and would not understand the necessity of
bending rules to get things done.
In 1586, Hai Rui was promoted to be the Censor-in-Chief in Nanjing.
Shortly before his promotion, Hai submitted a very controversial memorandum to
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the emperor urging him to re-institute severe penalties the founding emperor Hong-
wu had imposed on corrupt officials, including revival of the practice of peeling off
the offending official’s skin and making it into a balloon by filling it in with straws
and then displaying it to the public (Huang 1981, 154). Hai’s memorial incited
criticism from his peers and from the emperor himself, who stated that Hai’s
suggestion “for cruel punishment contradicts our sense of good government” (Huang
1981, 154). The emperor, nonetheless, decided to retain Hai. The minister of
personnel agreed, saying that Hai “should never be appointed to an office of any
substance, yet should be retained, as he stood as for an abstract standard of official
integrity” (Huang 1981, 154). Hai died in poverty while serving in his office.
Hai’s case illustrates the impossibility of reforming imperial officialdom by
following the samples of “clean officials.” As Ray Huang commented:
Hai [Rui’s] convictions and temperament indicated that he would be both a
highly regarded and a lonely man. During the quarter of a century he often
found himself fighting a one-man battle for one cause or another. Although
he was widely admired, no one followed him in practice. He had thus
simultaneously personified the best and the worst features of government by
moral principle. His life demonstrated what contribution a cultivated
gentleman could render the society through selfless spiritual sublimation.
Yet the utilitarian value of his virtue was limited” (Huang 1981, 130).

Why so? For pre-modern Chinese moral purists like Hai, the philosophy of
civil governance is derived from “the idea that all patterns of human behavior could
be instinctively classified into moral stereotypes of good and evil,” and their
austerity was motivated by the desire to reinforce the Confucian moral standards by
social values (Huang 1981, 131). What is forgotten is that the entire bureaucratic
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apparatus, rituals, rhetoric, and values were adopted primarily for the purposes of
legitimizing and perpetuating the imperial reign. Even Confucianism itself was
institutionalized only after the imperial government found that it contributed to the
survival, stability, and security of the regime. Understood in this context, corruption
in its various forms, where practiced in response to the defects of the adopted system
and did not immediately threaten the survival, stability and security of the regime,
and was largely tolerated. Indeed, sometimes they even served as lubricants that
smoothed the relationships between the officials and various sectors of the imperial
society and held the servants to the regime as hostages to the emperor’s favor and
wrath. Therefore, despite the highly moralistic tone of the imperial ideology, the
practice in the governance of the empire diverged widely from the theory (Huang
1981, 155).
It is, however, unfair to blame people like Hai Rui and the like-minded for
their moralistic ideals and efforts. In a pre-modern society in which a small literary
bureaucracy managed the affairs of the agrarian masses, one can hardly expect
sophisticated governance theories other than a stress on personal virtues and loyalty
to the sovereign (Huang 1981, 151). Hai had both, and has been remembered as
such. He, like other “clean officials,” have been presented as popular heroes onstage
and such productions have aroused the emotions of a large audience (Huang 1981,
130). However, the number of these officials is few, not much more than a handful:
Bao Zheng, Kou Zhun, Di Renjie, Dong Xuan, etc. Perhaps the reason why these
“clean officials” have become legendary is partially due to their rarity.
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Conclusion
Imperial rulers chose Confucianism as the guiding ideology for their empires
and designed their governments in pursuance with Confucian ideals. A Confucian
society supported by filial piety and Confucian institutional values was considered a
viable and sustainable societal model that ensured the empire’s survival, stability,
and security. Indeed, for a pre-modern agricultural society, a Confucian society was
quite attractive: just envision a society consisting of a ruler who was wise,
compassionate and virtuous, loyal and virtuous officials who governed the people in
conscientious service to the ruler, and subjects who enjoyed their livelihood, loved
their families, and respected their ancestors and rulers.
The reality was that corruption always accompanied imperial officialdom and
politics and at times became rampant. Indeed, certain core values of Confucianism,
such as hierarchy, familism, particularized trust, and reliance on personal morality
rather than public ethics, were conducive to systemic corruption. Also important
was the very nature of imperial officialdom: consisting of Confucian scholars
selected from the commoners to serve imperial interests, imperial officials were well
educated, intelligent, highly ambitious people who endured hardship to become
prominent. Although they were the ruler’s agents, their interests were not perfectly
aligned with those of the ruler. They were given superior social status, but poor
compensations. They had incentives to seek additional, personal benefits. At the
same time, they were held answerable to demands and obligations of their family
members, parents, relatives, peers, superiors, teachers, and various other people who
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were entitled to ask for favors from them in pursuance with the customs of the times
and Confucian moral obligations.
Corruption was systematized when (1) the ruler lost effective control over its
officials, (2) the officials, who shared similar educational background, dilemmas,
practical issues, moral struggles, and social pressures eventually reached a tacit
consensus to use their power for self-serving purposes and to share the profits of
corrupt practices, and (3) the commoners chose to endure the consequences of
corruption, having no effective recourse to relief and out of the instinct to survive.
Once routinized, corruption could hardly be eradicated or reversed. During good
times the imperial system was sustainable despite corruption, as long as the people’s
subsistence was not threatened. When the empire was in crisis, however, corruption
became a crushing burden on ordinary people and would eventually lead to revolt.
Under these circumstances, corruption posed a direct threat to the very survival,
stability, and security of the regime.
In summary, corruption generated in the imperial system as a by-product of
the regime’s choice of ideological and institutional infrastructures for its own
survival, stability, and security, grew and became entangled with the system itself,
and eventually impeded the proper functioning of the system, leading to the demise
of the regime in crisis situations.
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CHAPTER FIVE
CORRUPTION IN CONTEMPORARY CHINA

In this chapter, the author will discuss the roots and functions of
administrative corruption in contemporary China in light of the regime’s concerns
with its survival, stability, and security. The author will first discuss how the
contemporary CCP regime came into being in response to China’s struggle for its
survival, stability, and security in the modern era; then the author will discuss the
goals of the CCP regime during its first and second halves, and how these goals
reflected the regime’s concerns with its survival, stability and security; the author
will then move on to discuss the nature and features of Chinese officialdom during
the reform era, and how the traditional practices of guanxi (connection network) and
qianguize (hidden rules) were interwoven with the operations of Chinese society in
contemporary China; from there on the author will discuss the nature and features of
China’s governmental power structure in order to shed light on how corruption was
inevitable during the reform era due to the government’s goal to develop China’s
economy while maintaining its control over the society, and the society’s responses
to the government’s development-oriented policies. Finally, the author will examine
the Chinese government’s attitude towards corruption and discuss how some forms
of corruption have actually helped economic reform and development, while others
have proved to be more troublesome because of their threat to the regime’s stability
and security. Through these discussions, the author attempts to discover how
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corruption in contemporary China has been related to the government’s goals of
keeping the CCP regime stable and secure, and how corruption has impacted the
CCP’s market reform.

The Birth of the Chinese Communist Party (CCP) Regime
The current Chinese Communist Party regime was born in response to an
arduous quest for China’s survival, stability, and security. What triggered the quest
was a series of crises starting with the Opium War in 1840. The British expedition
force, then consisting of a few thousand soldiers, overpowered the army of the
Empire of Qing and forced China to sign an unequal bilateral treaty – the Treaty of
Nanking, pursuant to which the United Kingdom gained access to five major Chinese
ports and was granted a number of privileges in derogation of China’s sovereignty.
Other western countries followed. During the next sixty years, China signed
numerous “unequal treaties” with Britain, France, the United States, Russia,
Germany, and Japan, opening its interior provinces to western commercial and
missionary efforts, ceding lands to neighboring powers like Japan and Russia, and
losing its control over its former satellite states like Korea and Vietnam. The period
from mid nineteenth century to early twentieth century has been referred to in
Chinese history books as a period of humiliation and infamy.
A nationalistic awakening occurred among Chinese officials and scholars
who deplored China’s “descent from the rarified heights of the Celestial Court to a
terrestrial nadir as the ‘Sick Man of Asia’” (Wright 2001, 105). A series of
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responses were proposed to deal with the crisis. Progressively-minded imperial
officials interested in saving the regime called on the imperial government to launch
reforms. Though resisting such calls at the beginning, the imperial rulers eventually
relented. In August 1906, Empress Dowager Cixi’s issued an edict “promising to
prepare a constitution and reform the administrative structure of China by reshaping
the existing ministries and adding new ones, by curbing the powers of the governors-
general, and by convening a national assembly” (Spence 1990, 246).
The reform came too late. Nationalistically-minded young Chinese scholars
in the first decade of the 20th Century largely saw the Manchurian regime itself as
the source of China’s problem and were determined to overthrow it. Revolution
broke out in 1911, and the New Republic was inaugurated on New Year’s Day 1912,
followed by the abdication of the Qing emperor.
China’s crisis did not end with the demise of the Manchurian regime.
External threat from foreign powers, particularly Japan, persisted until the end of the
Second World War. Internal rivalry between “warlords,” mostly ex military leaders
under the imperial regime, was tearing the country asunder. The majority of the
Chinese population, then estimated at between 400-500 million, lived in destitution
and poverty and did not trust any government.
Two rival forces competed for control over China: the Nationalist Party
(Kuomintang), and the CCP. They both attempted to build a modern nation state in
China. The Nationalist failed, and the CCP succeeded.
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1. The Nationalist Regime
The Nationalist Party (Kuomintang) reigned over China for only twenty-one
years. The ideals of the founders of Kuomintang was to build a modern, democratic
state based on the “Three People’s Principles” – Nationalism, Democracy, and
People’s Livelihood (Zhou 2006, 72). However, during the twenty one years of its
brief reign over China, the regime was constantly struggling for its survival: conflict
with the Communists from 1927-1936, the war against the Japanese from 1937
through 1945, and a civil war with the Communists from 1946-1949. The regime
never had a chance to develop a governmental administration system capable of
implementing Kuomintang’s policies, or create political institutions compatible with
the tenets of traditional Chinese society (Eastman 1984, 42). The regime, which was
founded primarily through military prevalence over local warlords and annexation of
regional powers, was weak from the very beginning. Though nominally a unified
country, Kuomintang China had “largely autonomous power centers whose leaders
did not share all the central government’s political goals and on occasion directly
threatened the government’s very existence” (Eastman 1984, 41). Even in areas
where Kuomintang’s control was relatively firm, “local elites retained a tenacious
hold on the levers of power at the lower level of the administration” to the extent that
the central government’s orders and policies would not be carried out without the
support of the gentry (Eastman 1984, 41). The Kuomintang regime’s constant need
for military campaigns further weakened the regime. During China’s War against
Japan, the Kuomintang government suffered huge territorial losses, thus losing most
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of its revenue base. As a result, it had to rely on printing new paper currency to meet
its fiscal needs (Eastman 1991, 152); inflation rates soared accordingly. The
government continued to print excessive amounts of paper currency to fund its
campaign against the Communists after the Second World War. While the regime
had to resort to unusual and irresponsible means to alleviate its own fiscal crisis, the
livelihood of the people were destroyed.
Widespread corruption among the Kuomintang officials further aggravated
the people’s disillusionment with the regime. Sources of corruption were manifold:
First, many corrupt practices among the militarist warlords and local elites
were transferred into the Nationalist regime. The regime, though nominally unified,
was indeed a loose coalition consisting of the Kuomintang, former militarist
“warlords,” and leaders of the existing social order, especially rich landlords and
bankers who conditioned their loyalty to the regime on the regime’s ability to protect
their interests (Wedemeyer 1958, 323, Eastman 1991, 24). As a result, the regime
had to compromise its revolutionary ideals and ethical demands in order not to
alienate the power holders, whose withdrawal of support will indeed threaten the
regime.
Second, hardships during war-time had caused wide-spread corruption among
the Kuomintang officials. Due to the heavy loss of government revenues during the
Anti-Japanese War, the government had to resort to money-printing to temporarily
alleviate its fiscal problems. As a result, inflation grew and people, including
officials, suffered financial hardship. Many officials and military officers engaged in
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illegal means to make extra money, such as extortion, smuggling, or hoarding goods
for speculation (Eastman 1991, 157). While a few high officials used war as a means
of self-enrichment (due to large government contracts, ability to transport
commodities to and from occupied areas, etc.), many medium and lower-level
officials succumbed to temptations out of desperation and preoccupations with their
own personal situation (Eastman 1991, 159).
Third, post-war inflation eventually grew out of control and drove corruption
toward unprecedented levels (Eastman 1984, 221). Officials, who were not able to
survive on salaries alone, resorted to whatever means available to them to support
themselves and their families. Desperation, rather than sound judgment, took control
of the post-war Kuomintang officialdom.
Eventually, the regime lost the support of the people. By the eve of
Kuomintang’s total military loss to the Communist,
… [t]he Nationalists had lost the support of virtually every stratum of society.
The army had lost all will to fight. Intellectuals – students, teachers, and
members of the professional classes – had for the most part long since
become disillusioned with the regime. Peasants, urban workers, and even the
business classes (who, as members of the capitalist class, presumably had
most to fear from the Communists) had likewise abandoned hope in the
Nationalists. The Communists, meanwhile, had advanced from strength to
greater strength (Eastman 1984, 3).

2. The Communist Regime
The CCP won its military campaign against the Nationalists and founded the
People’s Republic of China in 1949. Unlike the Nationalists who tried to build their
regime upon a coalition with regional power-holders and traditional elites, the CCP
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simply decided to eliminate all potential opponents. The CCP immediately took
radical, even cruel measures to purge actual and potential enemies in order to
consolidate its regime base. In this respect the CCP acted very much like the
founding emperors of ancient Chinese Dynasties, especially Emperor Hong Wu. It
was estimated that several million people were killed during the “Suppression of the
Anti-revolutionaries Campaign,” in most cases without specific charges being
brought against the victims. Mindful of potential threats from dissidents outside and
inside the party and from international anti-Communist powers, the CCP launched
successive political campaigns aiming at purging dissidents, maintaining the CCP’s
ideological purity, or demonstrating the Communist regime’s strength to the world.
Concerned with the legitimacy and strengths of its regime, the CCP regime
demonstrated its zero tolerance for corruption. For example, the CCP launched the
“Three-Anti Movement” in 1951 to target three forms of misconduct among its
officials - corruption, waste, and an obstructionist bureaucracy. The campaign led to
the discovery of corrupt conduct by a number of senior CCP officials, who were
purged from the party (Spence 1990, 536). The most famous case prosecuted during
the campaign involved Liu Qingshan, the party secretary of the prefecture of Tianjin,
and Zhang Zishan, the administrative chief of the prefecture. The case was known as
“the first serious criminal case of New China” (Lu 2000, 58).
In the case of Liu and Zhang, both were found guilty for embezzling state
funds, leading decadent lifestyles, and sabotaging defense construction projects (Lu
2000, 58). The total amount the two officials allegedly embezzled was 171 million
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yuan, equaling U.S. $ 15,000.00 in today’s value (Lu 2000, 58; Wang and Liu 2002,
388). However, as Lu Xiaobo pointed out, “only about 30,000 yuan was for
‘personal purposes,’” and the rest was used to fund the ten commercial and
manufacturing businesses the prefecture legally operated (Lu 2000, 58). Indeed, the
graft and theft Liu and Zhang was prosecuted for were primarily diversion of public
funds from their designated particular purposes to agency production by investing
these funds in government-operated businesses (Lu 2000, 59). The diverted funds
included workers’ living allowance and water drainage construction funds (Lu 2000,
59). Other related corrupt practices included concealment of financial books to hide
misappropriation of public funds, and failure to separate the private and the public in
daily life (Lu 2000, 59). Both Liu and Zhang were sentenced to death.
Before Liu and Zhang’s execution, their defenders petitioned with Mao
Zedong for a revocation of the death sentences so that the two convicted officials
would have an “opportunity for remorse and reform” (Xinhua 2009). Mao
responded that the two officials must be punished severely particularly because of
their senior positions and the bad influence of their corrupt activities (Xinhua 2009).
Mao particularly said that “[o]nly if we executed the two of them can we prevent 20,
200, or 2,000 corrupt officials from committing various crimes” (Xinhua 2009).
The public also responded well to the execution of Liu and Zhang. As Lu
Xiaobo discussed:
The prosecution of major cases involving high-ranking officials like Liu and
Zhang, and the Three Anti Campaign in general, helped to boost the
legitimacy of the new regime among the urbanites. To many people, the
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campaign showed the resolve of the Communist party to stamp out corruption
in its ranks – in impressive contrast to the rampant corruption of the
incompetent Nationalist government in its waning days on the mainland. The
party’s concern with its image as clean and selfless underlined the early
struggle against corruption. In many highly publicized cases, high-ranking
officials who were involved in corruption received heavy penalties. In
interviews with the author, a number of people who had experienced the anti-
corruption campaign of the early 1950s spoke about the appeal the party had
among people familiar with the corrupt bureaucracy of the ancient regime
(Lu 2000, 59).

The Goals of the CCP Regime
According to Richard Lowenthal, post-revolution societies like China or
Russia faced the dilemma between institutionalized revolution and economic
modernization (Lowenthal 1983, 191-201). Indeed, “both the tendency to
institutionalize revolution as a recurrent phenomenon due to the utopian impulses of
communist ideology, and the necessity for the revolutionary process to exhaust itself
due to the requirement of economic modernization, are inherent in communist party
regimes” (Lowenthal 1983, 191). It was, however, impossible to “combine the
struggle for equality with the struggle for economic modernization because
economic modernization necessarily requires social differentiation and material
incentives.” (Lowenthal 1983, 201).
The post-revolutionary history of the People’s Republic of China confirmed
Lowenthal’s observations. For Mao Zedong, “continual revolution” was not only the
goal of the Communist regime, but also a survival tool because a young Communist
regime like China, facing domestic and international enemies, necessarily struggled
to survive. Mao thus resorted to constant massive campaigns to secure the regime
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and the ideology it stood for. Since the founding of the People’s Republic of China,
and up to Mao’s death in 1976, China was engulfed in successive political
campaigns: the Resisting America and Aiding Korea, the Suppression of the Anti-
revolutionaries Campaign, the Three-Antis and Five-Antis Campaigns, the Anti-
Rightist Campaign, the Great Leap Forward, and the Four Clean-up Campaign, and
eventually the Cultural Revolution. Although the Maoist intent was to use political
campaigns to maintain the cohesiveness of the CCP, reinforce the CCP’s absolute
power, educate the masses, reform the minds of CCP officials, purge dissidents from
the CCP and the state officialdom, successive political campaigns also resulted in
interruption of economic development, destruction of social institutions, wide-spread
distrust of each other among the people, and, unexpectedly and as explained below,
increased popularity of gaunxi network.
When the Cultural Revolution ended following Mao’s death, China’s national
economy was on the brink of total collapse. After Deng Xiaoping assumed power in
1978, the CCP’s central leadership redefined the goal of the regime as one of
achieving modernization and prosperity for China. According to Deng, revolution
was merely a means of achieving the ends of Communism, which was identified as
“liberation and development of productive force, end of exploitation, elimination of
the gap between the rich and the poor, and eventual prosperity for all” (Deng 1994,
373). To achieve the goal of “prosperity for all,” Deng affirmed that the regime
should allow some people to “get rich first” (Deng 1994, 373).
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The ensuing measures of economic reform demonstrated what Deng meant
by allowing some people to get rich first. Economic reform was soon launched to
give more autonomy to state-owned enterprises in order to encourage them to take
initiatives in improving efficiency and accomplishing profitability. At the same
time, the government encouraged private entrepreneurship by contracting out
government enterprises and projects and approving the set-up of private enterprises.
At the same time, the government retained the mechanisms of a socialist economy,
such as an “in-plan” supply (a central planning and distribution mechanism that
regulated the prices of certain goods and services) and allocation of goods, state-set
prices for “in-plan” commodities, basic plan quotas and inputs, etc. (Sun 2004, 55).
After 1992, China’s economic reform entered a second stage. During this
stage, the state-planning mechanisms were retired from China’s economic
framework. The market, rather than the state, became the functioning mechanism for
the allocation of goods and finances. “State firms lost plan allocation and were
thrust into the market. In a further retreat from command mechanisms, the
government turned to macrodevelopmental and indirect regulatory roles in the
economy” (Sun 2004, 60). The private sector of the economy had grown
significantly during this second phase of China’s economic reform. Many private
firms were competing with former state-owned firms in the market. The second
phase of economic reform was also accompanied by the decentralization of
government power. Having thrown away the central planning mechanism, the
central government had essentially “contracted out its authority to make policy as
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well as its power to intervene in the economy to various levels of bureaucratic
agencies and local governments in order to create coalition support” (Ngo 2008, 40).
Most of the routine economic decision-makings no longer required higher-level
approvals (Sun 2004, 160).
Thus, in contrast with the big-bang model of comprehensive, systematic
transformation in Russia and the Eastern European countries, China’s economic
reform, having been ongoing for three decades, has been gradual, discreet, and
apparently successful (Sun 2004, 4).

The Role of Communist Officials in the Reform Process
It has been observed that during the reform process, Communist cadres were
quick to adapt to the changing game of the new politico-economic structure (Lu
2000, 190). The gradualistic approach to economic reform had the added benefit of
minimizing oppositions from within the system. Sun Yan observes that:
Chinese officials did not resist reform because China’s gradualism allowed
them to retain some old functions and acquire new ones. Rather than
worrying about losing power, they were able to put their old and new powers
to profitable use, and they had a direct and personal interest in securing that
public policies did not inhibit their market-related activities. Along with
legitimate arrangements of profit-sharing, corruption helped act as a solvent
for the uncompromisable issues of ideology and interests by turning potential
opponents of reform into participants (Sun 2004, 198).

Jean Oi’s research has revealed that government officials, especially local
officials, not only cooperated in launching reforms, but also played critical roles in
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promoting local economic growth (Oi 1995, 1139-1140). What are the reasons
behind CCP’s officials’ support for economic reform?
Indeed, Deng’s reform efforts touched not only China’s economic system,
but officialdom as well. Before the economic reform, China’s officialdom consisted
mostly of “cadres” recruited either from revolutionary veterans, students, discharged
People’s Libration Army (PLA) soldiers, and activists in political campaigns (Lu
2000, 65). Most of these old-time officials were “unproductive political
entrepreneurs” whose life experience was to uphold the Communist ideology and to
obey the CCP (Fan and Grossman 2000, 197, Ma 2001, 149). Under the old system,
“[p]ositions within the bureaucracy rather than economic interests largely dictated
the political behavior of the cadres. As a result, the cadres were more responsive to
their superiors in the party than to the people belonging to the particular class from
which they were recruited (Lee 1991, 69). Most of the cadres recruited during the
Maoist era were therefore loyal to the Communist regime, but lacked modern
concepts and skills necessary for complex administrative and managerial tasks
required during the reform era.
Under Deng’s leadership, the criteria for official recruitment and promotion
changed from political loyalty to the ability to further economic management (Lee
1991, 228). As a result, the constituency of the elite class transformed from
revolutionary cadres to party technocrats (Ma 2000, 149). The standards for
selecting and promoting officials were focused on four aspects: younger age,
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education, revolutionary loyalty, and professionalism – as the standards for cadre
selection and promotion (Lu 2000, 158). Ideological purity was deemphasized.
Compared with cadres in the Maoist era, technocrats promoted in the 1980s
and 1990s were more confident in their personal ability, were more professional and
more competent, but also more individualistic and materialistic, and more concerned
about their personal interests (Ma 2000, 149). They also had opportunities that were
inaccessible to their counterparts in the Maoist era in terms of access to decision-
makers, resources, capital, and information (Lee 1991, 323). These technocrats were
also more likely to support Deng’s economic reform. Indeed, many reforms
programs were initiated by officials at the local, or even grass-roots level (Fan and
Grossman 2000, 195). According to Jean Oi, the role of local officials in the
economy was so important that China’s current political-economic system could be
called “local state corporatism” (Oi 1995, 1998). The local officials’ roles were
summarized as follows:
Within a local corporatist context local officials turned administrative
bureaucracy – of which they are part – into a free channel for information and
resources to facilitate market production. Using information and contacts
that they develop beyond the locality through their routine conduct of
administrative work, local officials can provide an array of essential services
to their local enterprises. This might include raw materials, but increasingly,
it has become important for information about new products, technology and
markets for finished goods. Local cadres use their expansive connection and
bureaucratic position to secure information that will serve local economic
growth… . (Oi 1995, 1139-1140)

Self interest was of course behind the CCP officials’ efforts to promote
economic reform. Not surprisingly, when the official policy was to call on officials
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to lead the society in becoming rich, it also provided opportunities for the officials to
enrich themselves (Lee 1991, 323), sometimes through informal or even illegal
means such as bribes, nepotistic favors, appropriation of public property for personal
benefits, or rent seeking. After all, like officials in the imperial area, officials in
contemporary China were mere agents for the state as well. The problem of agency
cost underlies all principal-agent relationships, including the relationship between
the state and its officials.

Systemic Corruption in Contemporary China: From Guanxi to Qianguize
Where does corruption come from? There is ample evidence to show that
corrupt practices were prevalent within the CCP system during the Maoist era,
especially toward its end.
Lu Xiaobo’s research has revealed that corruption was wide-spread among
the Communist cadres during the Maoist era, although many corrupt practices
involved political rather than monetary gains. Some of the most common corrupt
practices were political opportunism, false accusations, falsification or fabrication of
statistical reports, bureaucratic indifference and blind commandism, false models,
clientelism and patronage, cadre privileges, brownnosing, etc. (Lu 2000, 79-154).
One type of corruption, which involves intensified use of the traditional
practice of guanxi, was called zouhoumen (gaining “back door” benefits). The term
“zouhoumen” emerged in the early 1960s to refer to “informal, illicit ways of
obtaining consumer goods in short supply” (Lu 2000, 144). By the end of the
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Cultural Revolution, zouhoumen had become a routine practice towards obtaining
not just consumer goods, but also career-related opportunities, such as army
enlistment, college admission, or promotion (Lu 2000, 144). The practice of
zouhoumen stemmed from the traditional practice of guanxi. Despite the Communist
government’s denouncement of traditional practices and values, guanxi practices not
only survived, but also flourished during the Communist regime.
It has been noted that guanxi and zouhoumen flourished in response to
material shortages and the general scarcity of resources during the Maoist era (Sachs,
Woo and Yang 2000, 9-11, 12). Alena Ledeneva classified individual needs into
four categories: regular needs (such as foodstuffs, clothes, household goods, etc.),
periodical needs (such as holidays, health resort stays, travel tickets, etc.), life cycle
needs (such as birth clinics, kindergartens, schools, jobs, military services, etc.), and
social needs (Ledeneva 1998, 118). While in market democracies only certain
lifecycle needs are likely to require “the pulling of strings,” in state centralized
economies, guanxi is required to satisfy all types of needs (Ledeneva 2008, 123).
For example, ordinary people often used guanxi to obtain scarce items such as
televisions, train tickets, lean meat, cigarettes, etc. (Ledeneva 2008, 136).
Cultivation of guanxi was also a means that individuals employed to secure
their political safety. Chinese living in the Maoist era were constantly worried about
being accused of ideological disloyalty or other political crimes. They were under
constantly pressured to watch out for informants who might get them into trouble
(Yang 1994, 96). Such concerns with their safety led people “to cultivate guanxi
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with anyone who might do them harm” and to “establish relationships of debts as a
form of political security” (Yang 1994, 97). At the same time, they relied on the
inner circles of family and friends in their search for political security (Yang 1994,
97). The “survival kit” and “safety net” supported by guanxi “offered some certainty
and protection against the arbitrary nature of the state” (Ledeneva 2008, 123).
What is the mechanism of guanxi that made it a safety net for people to fall
back on in during difficult times? It has been observed that the moral force of
guanxi reciprocity was so strong that it was difficult for a person to decline the
request of a friend or to fail to repay a relational debt (Yang 1994, 133-134). Guanxi
practice was supported by Confucian ethics which defined human being in terms of
relational propriety and filial/affective duties. Ignoring affective relations and
refusing to render help to a close relative or friend demonstrated that one does not
have those feelings considered normal for a human being (Yang 1994, 128). Indeed,
according to Irene Yeung and Rosalie Tung, the following cultural values underlay
the practice of guanxi: (1) Chinese value viewing individuals as part of a bigger
relational system; (2) the individual’s obligation to act righteous by repaying favors;
(3) long-term relationship as a stock to be kept and nurtured; (4) moral obligation to
help the disadvantaged and to maintain a good reputation; (5) governance by flexible
ethical standards rather than strict rule of law; and (6) shame and loss of face as the
primary deterrent against immoral or illegal behavior (Yeung and Tung 1996).
These values bound the officials and secret society members alike, and were
interwoven with the moral conscience of every ordinary Chinese. Therefore, even if
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Confucianism was formally denounced during the Maoist era, the moral obligation to
honor guanxi reciprocity persisted and was adhered to at various degrees.
When guanxi was relied on to “get ahead of others” in accessing scarce
resources or opportunities, it was called zouhoumen. For example, during the earlier
years of the Cultural Revolution when colleges were closed, military service was
hotly pursued by youths. As a result,
[o]pportunities to [join the military] became extremely scarce, and the people
most likely to get in were those with powerful guanxi and able to use the
“back door.” The most often utilized, and perhaps most effective, type of
connection was an “old comrade” or an “old colleague” – typical reliable
guanxi – of one’s parents. It was not surprising that those who had the best
chance to be recruited were the children of high-ranking PLA officers (Lu
2000, 145).

Also for example, when colleges were reopened in the early 1970s, “back-
door practices” to get college admission was so prevalent that on 1 May 1972, the
CCP Central Committee issued a special circular titled “Resolutely Prohibiting
Through-the-Backdoor College Admission.” The initiative was intended to criticize
the abusive practice of giving preference to relatives of powerful officials in college
admission and similar corrupt practices (Gu 2007, 6).
Guanxi practice continued through the reform era and has been put to new
uses: to access opportunities and regulated commodities, reduce the costs of
compliance with law, and increase the security of commercial transactions.
During the first phase of China’s economic reform (1978 – 1992), when the
state central planning mechanisms were still in place and the state officials were still
administering state command over economic plans and prices of regulated goods or
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service, guanxi was commonly utilized to secure access to materials, commodities
and resources (Fan and Grossman 2000, 197). The then existent “dual track” system
provided those having good guanxi connections with good opportunities for
profiteering. The “dual track system” resulted from the state’s continual control of
the supply and pricing of certain regulated goods or services, while there was a
parallel open market for these goods and services. The market prices for the
regulated goods and services were thus significantly higher than the state-set “in-
plan” prices (Sun 2004, 42). As a result, acquisition of regulated goods or services
“within the plan” and resale of them at market prices would bring in good profits.
Good guanxi with key government officials therefore increased one’s chance of
obtaining regulated goods at state-set prices. Because of the huge demand for
regulated goods and services, even state-owned enterprises having legitimate need
for those goods or services had to use guanxi to ensure their supply. Consequently,
procurement agents of state-owned companies (caigouyuan) had to be “adept at
cementing guanxi with significant persons in units that [were] potential suppliers and
also find ways to induce suppliers to sell to them instead of other competing buyers”
(Yang 1994, 103-4). Guanxi practice, therefore, became more significant in both the
private and public economic sectors.
The second stage of economic reform was characterized by decentralization
of routine economic decision-making powers, privatization of the economy, and the
transformation of the government’s role from an economy operator to that of a
market regulator. “Shedding off controls over industrial inputs and outputs, the state
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has turned to four new tasks: development, investment, marketization of factors of
production, and transformation of state firms” (Sun 2004, 43). Some industries
became particularly profitable at market reform stage: banking, government
contracts, real estate, import and export, mining, etc.
Government rent-seeking increased during the second stage of the economic
reform, particularly in connection with the most lucrative industries. In this instance,
rent is defined as “payment made to an owner of resources over and above that
which those resources could command in alternative uses. In other words, rent is
return in excess of opportunity cost” (Ngo 2008, 29). Since the government has the
power to create and allocate rent, when the government agents are exposed to offers
of bribery by economic actors trying to capture rents, their ability to create and
allocate rent becomes a source of corruption (Ngo 2008, 30).
Decentralization and the resultant delegation of economic regulatory power
in China has created immense opportunities for government agents, central or local,
to create rents and profits (Ngo 2008, 40). Wu Jinglian, a famous economist in
China, argued that “a vicious circle of corruption is fashioned by rent-creation and
rent seeking in China. Government officials and businesses which benefit from
exchanging rents with bribes will try to maintain and expand the existing rent
regime, hence leading to more corruption” (Ngo 2008, 31). A prominent example is
the land-taking process at some localities, which involves some government officials
who take bribes from developers using their power to take land from city dwellers or
peasants through the official land-taking process, arrange bank loans for those
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developers, grant land use rights to those developers at high premiums, and
eventually participate in the profits when the developed properties are sold at much
higher prices. To take the economically developed Zhejiang Province as an
example: according to the China Youth Journal, in 2009 alone 67 land administration
officials in that province, including fifteen officials at Ju (equal to prefect) or deputy
Ju level, were prosecuted or sentenced for taking bribes in 2009 (CYJ 2010). The
highest-ranking among them was Xu Maiyong, former Deputy Chief of Hangzhou,
whose case might involved amounts received in bribes exceeding 100 million RMB
(about 13 million US dollars). Many leading real estate enterprises in Hangzhou
were investigated in relation to Xu’s case. Also prosecuted and sentenced were the
former Municipal State Land Administration Bureau Chief of Taizhou, the former
Municipal State Land Administration Bureau Chief of Lishui, etc.. Most of those
cases involved huge amounts paid in bribes to officials in exchange for their
assistance in obtaining land use rights, expediting land taking processes, securing
award of construction contracts, arranging finance, etc. (CYJ 2010). In addition to
traditional means of cash for benefits, both bribers and bribees have resorted to more
sophisticated means of bribery disguised as legitimate transactions. For example, in
the case of Liu Changchun, former Municipal State Land Administration Bureau of
Taizhou, bribers sold residential flat units to Liu at prices far lower than their market
prices (CYJ 2010). Liu purchased multiple units of these underpriced real properties
using the names of his father, son, or even remote relatives. In the case of He Min,
former Land Utility Division Chief of the Lishui Municipal State Land
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Administration Bureau, the briber was offered an opportunity to invest 1 million
RMB (about U.S. $ 145,000) in a real estate development project for a “guaranteed
return) of 35%. Half a year later He reaped 350,000 RMB (about U.S.$ 50,000).
Corruption involving real estate projects is not limited to Zhejiang Province
alone. Many high-ranking officials around the country have been removed and
prosecuted for corrupt practices related to real property projects, including: Zhu
Zhigang, former deputy minister of China’s Finance Ministry; Liu Zhihua, former
deputy mayor of Beijing; Du Shicheng, former deputy party secretary of Shandong
Province and party secretary of Qingdao Municipality; Li Baojin, former Tianjin
municipal chief prosecutor; Li Dalun, former party secretary of Binzhou City, Hunan
Province; He Minxu, former deputy governor of Anhui Province. The list can go on
and on. It is estimated 40% of all the recently investigated and prosecuted corruption
cases involved real estate projects (Feng 2010). Those cases typically involve huge
amounts. Also, because real estate projects typically encompass many stages, such
as project approval, planning, bidding and contracting, project supervision, project
examination and acceptance, etc, and each stage requires government permits or
approval, corrupt cases involving real property often implicate large numbers of
officials at the various government agencies responsible for the multiple phases of
real estate development (Feng 2010).
When illicit bribery relating to rent-seeking is regularized and widely
practiced, the otherwise illegal practice becomes the “hidden rule.” According to Sun
Yan, after the early 1990s affective ties play a lesser role in corrupt transactions (Sun
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2004, 72). Instead, the overall commercialization of the society and the proliferation
of rent-seeking have resulted in an increase in corrupt transactions between former
strangers who acted in accordance with qianguize (Sun 2004, 72). Ledeneva and
Yang also agreed that impersonal money is replacing some of the affectively charged
relations in facilitating corruption transactions (Yang 2002, 465-66, Ledeneva 2008,
139). Guanxi, however, is still important because it bolsters trust between parties
within a corrupt transaction. Hidden rules are informal, and in many circumstances
illegal. As a result, trust plays an important role in securing the performance of the
parties in accordance with the unspoken rules and in reducing legal risks. Trust is
easier to build if the parties are within the same guanxi network, or are brought
together by a mutual guanxi contact. Also, repeat players in the same qianguize
transactions are more likely to trust each other. As a result, guanxi has contributed
greatly to the formation and prevalence of qianguize.

The Nature and Features of Government Power In Contemporary China
No discussion of corruption is possible without understanding the authority
structures of the society, especially government authorities. Here the author briefly
analyzes the nature and features of government authority in China from: power
distance, relations between administrative and business authorities, and
administrative ethics.
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1. High power distance
Inequality is a reality every Chinese has to live with. Inequality in Chinese
society is based mainly on position, status, seniority, and wealth. High power
distance is especially evident in the officialdom and large corporate entities where a
handful of key position-holders monopolize decision-making and demand obedience
from those underneath their authorities. Positions also directly translate into
privileges, communal respect, influence and power (Jia 2006, 52).
Some corrupt practices are directly related to privileges associated with
higher positions. Position in China closely relates to the position holder’s
entitlement to material comfort and position-related benefits, such as allocation of
cars and housing benefits. As a result, officials in senior positions often spend public
funds for personal benefits, such as travel, extravagant meals, extravagant offices,
luxury cars, or luxury residences. During the State Auditing Bureau’s inspection in
1993, it was found that nearly 50 percent of the audited counties in impoverished
regions bought vehicles for key officials (Sun 2004, 143). One county government
even purchased a Rolls-Royce (Sun 2004, 143).
Centralization of power in a few key decision-makers in local governments
and state-controlled corporations, coupled with decentralization of power from
central government to governments at lower levels, creates opportunities for
corruption. A vivid example is the “first-in-command” phenomenon, meaning
prevalence of corruption among those who occupy the highest positions in
administrative jurisdictions, departments and agencies, or enterprises (Sun 2004,
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160). For example, Hu Jianxue, the corrupt former Party Secretary of Tai’an City,
Shandong Province, was reported to say that “[w]hen one reaches my rank, there is
nobody to check me” (Sun 2004, 161). Hu was eventually found to have accepted
RMB 600,000 (about U.S. $ 90,000) in bribes and was sentenced to death
(commuted to death with two years of reprieve, and eventually life sentence).
According to a bureau head in Chongqing, Sichuan Province, the prerogative of
being a head of a city, enterprise or department was that “his words would be rules
and laws, and must be followed even wrong” (Sun 2004, 161).
Corruption involving the “first in command” is especially vicious because
once the chief executive of a jurisdiction or government organization is corrupt,
others follow the corrupt practice. Participation in or connivance with corrupt
practices become necessary in order to survive as an official in that jurisdiction or
organization. The following case cited in Sun Yan’s book Corruption and Market in
Contemporary China gives a good example:
A case in point in Shenyang, capital of Liaoning Province. A major
industrial base in the socialist era, the city has been plagued by ailing SOEs
and massive layoffs in the recent decade. Adding to its slow economic
progress was a contingent of corrupt officials who controlled all key branches
of the city government and who milked the city dry with wide-ranging abuses
in the 1990s. At the top, Mayor Mu Suixin traded public offices, land,
contracts, and protection for organized crime for kickbacks. Ma Xiangdong,
executive deputy mayor in charge of foreign investment, used city funds –
designated as bonus for investors – to gamble in Macau and set up a private
company in Hong Kong. The chief of the Tax Bureau harvested Y200,000 to
Y300,000 in cash gifts for each Lunar New Year since the late 1990s and
kept stacks of envelopes filled with cash bribes in his office. The Chief of
the Price Control Bureau stashed away Y40 million in slush funds and
purchases six residences with public funds. The head of the municipal court
sheltered half a dozens mistresses with public funds and bribe money. The
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chief of the State Assets Bureau dropped Y10,000 at a time on escort ladies.
The chief of Finance Bureau used city funds for frequent overseas travels.
The list goes on ：head of the city Prosecutor’s Office, Head of Land
Resource Bureau, head of Tabacco Bureau, and head of the Construction
Bureau. The entire municipal government fell in 2001 (Sun 2004, 127).

The government seemed to be well aware of the danger of high power
distance when it instituted reform measures to introduce bottom-up supervision into
its system (Sun 2008, 62). One such measure was to fill official positions through
“open selection and competition,” requiring candidates for positions to be nominated
at the grass-roots level so as to “reorient cadre incentives towards responsibilities to
voices from below” (Sun 2008, 63). However, this reform measure does not apply to
chief government executive offices. Candidates for these offices are still nominated
by the party organization at the next higher level (Sun 2008, 64). As a result,
“incentive mechanisms have remained the same for holders of the chief executive
offices, especially within the party,” channeling them to obligation and loyalty to
authorities above, rather than to the citizens below (Sun 2008, 65).
2. Comingling of administrative and business authorities
While merchants generally intend to secure the help of officials to “get rich
first,” officials also see their administrative power as a means to “get rich first.”
Many officials have also decided to use their power to help their family members
achieve the same end. A common practice has been to mingle administrative power
with business operations. The central government actually acquiesced in this
practice at the earlier stage of the reform era. Indeed, in the late 1980s, the central
government encouraged local governments and state institutions to establish sideline
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companies to make money so as to ease the central government’s financial burden
(Gong 2006, 94). The policy led to a proliferation of entities that were affiliated with
public institutions, such as subsidiary companies (zigongsi), auxiliary enterprises
(fushu qiye), and service companies (sanchan) (Gong 2006, 94). These entities are
often managed by individual government officials or their relatives (Gong 2006, 95).
Because these companies have “privileged access to profitable projects and
production orders from the government due to their connections with the latter,” they
pose an unfair advantage over their competitors (Gong 2006, 95). They are often
used as a vehicle for the self-enrichment of officials and their family members. For
example, in the case of Anhui Mobile, the state-owned enterprises:
Established a communication company with Y2 million assets in 1999, with
20 percent of its shares controlled by Anhui Mobile and the rest divided
among its managers and employees. This new business made a net profit of
Y35 million within just two years and provided each of the four top officials
of Anhui Mobile with Y86,500 and all the mid-level officials each with
Y58,000 in its dividend distributions. A major reason that this start-up was
able make such a quick and huge profit was that Anhui Mobile gave it the
two most profitable projects and also allowed it to use the existing client
network. (Gong 2006, 95)

In 2008, the CCP the Central Discipline Committee and the Central
Committee Personnel Department issued a joint decree prohibiting party and state
officials from holding positions in commercial firms (Sun 2008, 63). However,
because many of these officials are still benefiting from business operations through
the firms that often are operated by their children and relatives, or by other contacts
in their guanxi network, it is unlikely that the decree will be effective in curbing
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corruption resulting from the marriage of administrative power with business
operations.
3. Loss of Relevance of Communist ethics
It has been observed that in today’s China, the motivation “to get rich” has
replaced traditional Communist values of dedication to the revolution, loyalty to the
party, and pursuing a simple personal lifestyle (Ma 2001, 148-49). At the same time,
an authoritarian regime like China needs to base the ruler’s authority on some claims
of ideological superiority, just like ancient emperors based their authority on the
mandate of heaven. Indeed, the CCP declares itself to be the representative of the
most advanced productive force, the most advanced culture and values, and the
fundamental interests of the people (officially referred to as “Three
Representatives”) (Sun 2004, 191). Moral superiority is embodied in the party’s
self-declared representation of “advanced culture and values.” To substantiate this
claim, the CCP calls on its officials to be fully dedicated to the Communist cause and
to sacrifice personal benefits for the public good (Sun 2004, 191). The CCP’s
moralistic rhetoric, however, directly clashes with the prevalent commercial and
materialistic culture. Indeed, how can one expect an official to stay away from rent-
seeking while the rest of the society is encouraged to “get rich?” How can one
expect the officials to be immune from “imitating Western-life styles” and “copying
Western values” of self gratification and self-centeredness while the entire society is
engulfed in consumerism(Sun 2004, 176)?
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Since the formal official conduct norms are detached from reality, they
become hollow slogans and lose their relevance. As a result, many officials pay
mere lip services to the party’s ideological calls, even rules and norms, and continue
in their corrupt practices. The same happened to the Confucian scholar officials
during the imperial era who would pay lip services to Confucian moral standards, but
did not shy away from self-enrichment and corruption. The same problem plagues
the CCP’s officialdom – corrupt officials often resort to hypocritical practices to
retain an “impeccable” moral image while engaging in corruption. Corrupt officials
sometimes pretend to be frugal, ideologically dedicated, and strongly moralistic, in
order to cover their corrupt practices (Liu 2007). For example, Zhang Zimin, former
President of the Intermediate Court of the Fuyang City, who was found to have taken
bribes amounting to tens of thousands of dollars, used to be known for his tireless
campaigns against corruption (Liu 2007). For another example, Fan Taimin, the
corrupt former police chief of the City of Baoji in Shanxi Province, had the
reputation of being completely faithful to his duties and of leading an exemplary
lifestyle (Liu 2007). Once he openly rejected a cash gift of RMB 30,000 (equal to
about $ 5,000) and wrote to the person offering the gift: “Although I have no money,
but I have personal integrity and integrity as a Party member. The amount of the gift
is not small – it’s equal to my official salary for a few years. But I reject unjust gains
as trash” (Ren 2004). Ironically, at the same time those words were said, Fan was
secretly taking bribes from more “reliable” sources (Ren 2004). It was discovered
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that Fan took at least RMB 300,000 (equal to $ 45,000) and a condo as bribes when
he was in office (Ren 2004).
As corrupt officials resort to hypocrisy to disguise their corrupt conduct,
public trust in public officers erodes. Hypocritical practices not only mock the
published norms of ethical behavior, but also cause the public to be skeptic about the
officials and the sincerity of the party’s moralistic stance. If the officials can ignore
the rules and norms, why requiring common people to obey them? Furthermore,
because of the corrupt officials’ artful cheating and pretenses, it becomes very
difficult to tell an upright official from a corrupt one.

How Corruption Has Helped and Hurt the Regime
The question remains as to how serious the CCP government is in fighting
corruption. On the one hand, corruption has seriously undermined the CCP regime’s
moral credibility and is perceived as one of the greatest threats towards the regime.
In a recent survey on the ten greatest perceived challenges China will be facing in the
next ten years, 82.3% of the surveyed viewed corruption as most severe of the
potential threats to China’s economic standing and stability in the next decade
(Wang et al., 2009). The new leftists, the younger generation of Chinese scholars and
students that are critical of the economic reforms, have instead embraced
Communism and strong nationalism. They constantly refer to corruption as evidence
of the failure of Deng’s pro-market reform (Ma 2010).
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On the other hand, corruption is so interwoven with the existing government
mechanisms that no anti-corruption measure is likely to be successful without serious
political and institutional reform, which the government is unwilling to consider for
fear that fundamental political reform will undermine the stability and security of the
regime. Indeed, some forms of corruption have in fact helped market reform and
economic development, and these types of corruption have actually been encouraged
or at least acquiesced to at certain stages of economic reform in the interest of
promoting development. For example, corruption eased the resistance among the
CCP cadres towards the pro-reform government policies in the 1980s because it
provided opportunities for those cadres and their family members to benefit from
certain reform policies, such as the dual-track system (Sun 2004, 198). According to
Fan and Grossman, the regime has chosen to tolerate certain forms of corruption,
especially bribes from profit-making firms to officials who contribute to their
success in economically better-performing regions, as an informal means of
compensating those officials (Fan and Grossman 2001, 201-202). Fan and Grossman
point to three groups of evidence to support their conclusion: (1) the central
government’s policy of fiscal decentralization and the resultant opportunities it
creates for corruption by local officials; (2) the lack of alternative mechanism to
provide incentives to local officials; and (3) highly selective enforcement of anti-
corruption measures (Fan and Grossman 2001, 204). The central government’s
encouragement of the government operation of sideline businesses in the 1980s
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(Gong 2006, 94) is another example of how toleration of corruption is sometimes
used as a means toward the end of securing the success of the economic reform.
So where does the government stand in terms of anti-corruption? The
government’s top concern is indeed the survival, stability, and security of its regime.
Because economic development is currently the central cause which secures popular
support for the government, in all likelihood the government will continue to raise
anti-corruption rhetoric but cautiously implement anti-corruption measures and to
subject anti-corruption to the goal of development. Top on the government’s anti-
corruption campaign agenda will be those corrupt practices that pose a direct threat
toward the regime. But in general, anti-corruption remain a tool serving the purposes
of securing the regime’s survival, stability, and security rather than a primary goal
itself. There are three types of evidence that support this conclusion.
1. First, the government CCP is resistant to any political or institutional
reform that might pose a threat toward its control of the state and the cohesion of its
leadership. The CCP firmly refuses any proposals to copy Western democracies, a
position recently reaffirmed by Wu Bangguo, the CCP’s second-highest ranking
official (Simpson 2010). The agenda set in the 1980s for political reform aiming at
“separating the party from the state” (Wong 2005, 10) was set aside after the
government’s crackdown on the Tiananmen Square Democratic Movement in 1989.
Despite the government’s decentralization of administrative power from central to
local governments, there is no evidence that the party is intending to loosen its
control on the society. Even though procedures and institutions have been
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introduced to increase supervision of official power at the grassroots level, these
measures were not designed to relax the party’s control. A good example is the
party’s retention of its authority to appoint chief executive officers while
implementing “open selection and competition” procedures for selecting candidates
for non chief executive positions (Sun 2008, 64). The top priority of the CCP is still
to maintain its cohesiveness and absolute political power (Fan and Grossman 2001,
201).
2. Secondly, the CCP is more likely to punish those corrupt officials who
challenge or undermine the authority of the top CCP leadership. It has been
observed that the CCP’s enforcement of its anti-corruption measures has been
selective: while some corrupt officials received no admonition or only a “slap on the
hand,” the party was more willing to punish those corrupt officials whose “political
allegiance has become suspect” (Fan and Grossman 2001, 203). For example, the
prosecution and sentencing of Chen Xitong, former CCP Secretary of Beijing, on
charges of embezzlement was viewed as a politically-motivated act orchestrated by
the then CCP President Jiang Zemin to remove his political foe (Li 2007, 1).
Twelve years later, the fall of Chen Liangyu, the Party Secretary of Shanghai,
aroused similar suspicions because of Chen’s open opposition to the macroeconomic
control policies of Hu Jingtao and Wen Jiabao, the current top leaders of the CCP (Li
2007, 2). Chen’s case is widely reported and studied both within and outside of
China, and serves as a good example as to how anti-corruption investigation and
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corruption is closely related to the CCP leadership’s effort to reinforce its power
base.
On September 25, 2006, the party secretary of Shanghai was suddenly
removed from office. Chen was eventually sentenced to eighteen years of
imprisonment. The charges brought against him mainly involved misappropriation
of US$ 400 million of social security funds for reinvestment in real properties
development projects and business interests (Brown 2006, 2). In addition, according
to the CCP Central Commission of Discipline Inspection announcement, Chen had
engaged in other irregular and illegal conduct, such as “helping further the economic
interests of illegal business people, protecting staff who severely violated laws and
discipline, and furthering the interests of family members” (Li 2007, 6).
Chen was a protégé of China’s former President Jiang Zemin. Born in 1946,
Chen joined the Chinese army at age 17. After military service, he was assigned to
work at Shanghai Pengpu Machine Factory, where he worked as a worker first, then
an engineer, and eventually became a deputy director. In 1984, Chen was promoted
to the position of Party secretary of the Shanghai Electrical Appliances Corporation.
Both the Pengpu Machine Factory and the Shanghai Electrical Appliances
Corporation were affiliated with the First Bureau of Electrical Machinery of the
Shanghai municipal government. According to Li Cheng,
From the mid-1980s through the entire 1990s, officials from that bureau
formed a powerful network and dominated the top leadership posts of the
Shanghai branch of the CCP and Shanghai municipal government. The most
notable figures in this regard include Huang Ju, who served as deputy bureau
chief in the early 1980s, and Hua Jianmin, who advanced his career in a
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research institute that was part of the First Bureau. Huang and Hua later
became party secretary and vice mayor of the city, respectively. Huang is
currently the executive vice premier and Hua is state councilor and secretary-
general of the State Council.

Shanghai’s First Bureau of Electrical Machinery was also under the
leadership of the Ministry of the Electronic Industry, which was headed by
Jiang Zemin in the early 1980s. It was not a coincidence that officials from
that bureau became the main sources of elite recruitment in the Jiang era (Li
2007, 4).

In 1985, Jiang Zemin was appointed mayor of Shanghai. Soon afterwards
Chen was promoted to become the Retired Cadre Bureau Chief of Shanghai, the
agency handling retirement and benefits of senior CCP officials. New to Shanghai,
Jiang needed to please those retirees who used to occupy key executive positions and
still had close ties with officials in the central government and held influences
locally. Knowing the importance of his mission, Chen managed to provide excellent
services to the retirees under his care and, as a result, won their praises and
recommendations. This paved the way for Chen’s career advancement (Li 2007, 4-
5). In 1987, he was promoted to be the deputy party secretary and director of
Huangpu District, one of the most important urban districts in Shanghai. After Jiang
Zemin came into power in 1989, Chen was further promoted to be the deputy Party
secretary of Shanghai. With Jiang’s support, Chen was appointed alternate member
of the CCP Central Committee at the 15th CCP Congress in 1997. Consequently
Chen “became the mayor and Party secretary of Shanghai and obtained Poliburo
membership on the 16
th
Central Committee” (Li 2007, 5).
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Chen’s case illustrates how money and power combine through corruption,
and how guanxi, qianguize, and corrupt networks have been used for corrupt
purposes. In short, Chen had been patronizing a number of corrupt businesspeople
or officials, who were connected with Chen through previous professional or
personal relationships. Under Chen’s patronage, those corrupt businesspeople and
officials engaged in massive misconduct for personal benefit, including outright
embezzlement and misappropriation of pension funds for investment and self
enrichment. In return, Chen received benefits, including bribery and benefits in
business interests through his son and relatives.
To take Wu Minglie’s case as an example: Wu, former and Party secretary of
the New Huangpu Group, built his relationship with Chen in the early 1990s while
serving as the director of the Real Estate Development Bureau of the Huangpu
District under Chen, then director of the district (Li 2007, 9). Wu “ ‘borrowed’ 800
million yuan from the Shanghai pension fund to purchase a large amount of stock in
the New Huangpu Group, which allowed him to serve as CEO and Party secretary of
the company” (Li 2007, 9). In return, Wu appointed Chen Weili, Cheng Liangyu’s
son, as vice president of a branch company within another corporate group controlled
by Wu, paying Chen Weili an annual salary of 400,000 RMB and a bonus of 600,000
RMB (Li 2007, 9).
A more outrageous case involves Zhang Rongkun, chairman of the China
Property and Casualty Reinsurance Co. From 2002 through 2004, Zhang invested 17
billion yuan in three major highway construction projects: 3.2 billion yuan for a 30-
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year contract to manage the Shanghai-Hangzhou Highway in 2002, 5 billion yuan for
a 25-year contract to manage the Jiading-Jinshan Highway in 2003, and 8.8 billion
yuan to purchase 20% of the stocks of the Suzhou-Jiading-Hangzhou Highway in
2004 (Li 2007, 6). But Zhang’s company had only one billion RMB in registered
assets (Li 2007, 6). Where did Zhang get money to operate projects requiring total
investment of 17 billion RMB? Zhang illegally borrowed 3.65 billion RMB from
Shanghai pension fund, obtained 6 billion RMB in loans arranged through his
government official friends, and raised another 1 billion RMB through venture
capital funding from the Shanghai Electric Group Co., where Zhang served as a
trustee and vice chairman of the board (Li 2007, 6). Borrowing money from pension
funds was illegal in China. In order to secure illegal loans from pension funds,
Zhang paid bribes to various government officials, including offer of bribes to Zhu
Junyi, Director of Shanghai Labor and Social Security Bureau, and Wang Guoxiong,
former director of the department of commerce of the Shanghai municipal
government (Li 2007, 8).
None of the illegal borrowing would have been possible without the
knowledge and approval of Chen Liangyu, the first-in-command in Shanghai.
Indeed, Chen might well have shared in Zhang’s illegal profits (Li 2007, 8). Not
only Chen, but his trusted subordinates and allies-in-interest have played critical
roles in facilitating the illegal transactions. For example, Qin Yu, former personal
assistant to Chen, played a critical role in helping Zhang access the Shanghai pension
fund (Li 2007, 8). A total of 15 key senior officials in Shanghai were also
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investigated and charged, including the Director of Changning District, Director of
Shanghai Municipal Government Department of Commerce, Director of Shanghai’s
State-Owned Assets Supervision and Administration Commissions, etc. (Li 2007,
7).
Although Chen Liangyu’s case involved outrageous facts, misappropriation
of pension funds did not occur in Shanghai alone, but also elsewhere. By the time of
the government’s investigation and prosecution of Chen Liangyu, misappropriation
and illegal borrowing of pension funds had been so widespread in local governments
that it had indeed become a qianguize (hidden rule) for provincial and local
government finance (JJGCB 2006, 1). So why was Chen Liangyu and Shanghai
picked on? Because of Chen’s close ties to former President Jiang Zemin, some
speculate that his investigation, charges, and sentence were politically motivated for
the purpose of weakening the camp of former president Jiang, known as the
“Shanghai Gang,” and asserting the authority of President Hu Jingtao and Premier
Wen Jiabao, then relatively new in power (Li 2007, 13-14; Brown 2006, 2). There
seemed to be at least some factional elements in the central government decision to
remove and prosecute Chen. By removing Chen, the power base of former President
Jiang Zemin, who has been considered a political rival of Hu Jintao and Wen Jiabao,
had been significantly weakened. In contrast, Hu Jintao reaped political gains as his
popularity among the ordinary Chinese rose and his protégés took more important
leadership positions in both the 17
th
Party Congress in 2007 and the 11
th
National
People’s Congress in 2008 (Li 2007, 16).
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Also, the seriousness of the case itself might have significantly influenced the
central government’s decision to remove, investigate and prosecute Chen. Because
misappropriation of pension funds was a politically sensitive corrupt conduct, and
also because Chen’s case involved astronomical amounts, the central government
might feel that investigation and prosecution of Chen was necessary. As Li Cheng
has observed:
Understandably, the mismanagement of social security or pension
funds is politically very sensitive. In a direct way, it can shake up
public confidence in the system and harm the basic interests of
millions of people. It was, therefore, a wise and appropriate move on
the part of Hu Jintao and Wen Jiabao to launch a new anti-corruption
campaign by making an example of this case of the embezzlement of
pension fund (Li 2007, 9).

Chen’s fall also served as a reminder to officials defiant to the central
government’s power that they do not enjoy absolute power, and that the central
government can raise corruption charges against them at any moment, thereby
keeping the officialdom under central government control. Indeed, to a great extent,
“[t]he top leaders’ children and other family members are almost all currently
engaged in business, and many clearly take advantage of their official family
backgrounds to promote their own economic interests” (Li 2007, 10). Chen’s fall
reminded officials in other provinces “that even the most strident local area must
reckon, ultimately, with the significant powers of the national Party and its
disciplinary structure” (Brown 2006, 2).
Overall, how significant is the case of Chen Liangyu in Chinese
government’s anti-corruption campaign? In fact, corruption is so deeply entrenched
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in CCP officialdom that if “anti-corruption campaigns substantially undermine the
interests of too many CCP leaders, [the CCP top leadership] may alienate the
political power base upon which he is heavily reliant” (Li 2007, 16). At the same
time, selective enforcement of anti-corruption measures serves as an effective
official control mechanism. Because individual officials know that those higher up
can charge them with corruption at any time, they are more likely to give political
support to the higher authorities as a favor, in exchange for non-investigation of their
own political misconduct (Shirk 2003, 144).
3. Finally, the government is more attentive to those corrupt behaviors that
have the potential of causing social unrest. Official corruption, coupled with lack of
political power for ordinary citizens, has sometimes fueled anger among the poor and
less privileged and resulted in social unrest (Lum 2006, 10). A common cause of
social unrest has been corruption in local development projects that have resulted in
the unlawful taking of private property. In China, the majority of the farmers have
thirty-year land use contracts with the government (Lum 2006, 3). When land-taking
takes place, villages, townships, and county governments generally receive the lion’s
share of the premiums from sales of land use rights to developers, while the
displaced farmers receive compensation based on agricultural productivity of their
land and resettlement costs (Lum 2006, 3). Government officials sometimes collude
with developers to facilitate development projects and suppress compensation
amounts paid to displaced farmers. Some aggrieved farmers chose to get organized
in protest, and violent clashes sometimes occurred between protestors and the police
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– not only in the poor interior regions of the country, but also in rich coastal areas
where profitability from development is high (Lum 2006, 3). In response, the
government promulgated new rules to regulate land-taking and intensified
investigation and prosecution of corrupt practices involving land-taking and local
development. A large number of local government officials, many from
economically developed cities like Shanghai, Hangzhou, Chongqing, etc., fell
because of corrupt conduct in relation to real estate development projects (Liang
2008).
Returning to the point of the Chinese government’s concerns with the
regime’s survival, stability, and security, how likely will these concerns change its
anti-corruption efforts in the future? Indeed, if massive public disapproval of the
regime or debilitating dysfunction of the CCP bureaucracy occurs and poses a threat
to the stability of the CCP’s hierarchy, its monopoly of political power, or even
survival of the regime, the CCP will be forced to take tougher anti-corruption
measures (Fan and Grossman 2001, 204). So far the CCP’s positive economic
performance, its serious efforts to maintain social stability, its self-confident claim to
be a great power, and its attempts to reconfigure the relations between the state and
the society, have all contributed to the people’s acceptance and support of the current
regime (Heberer and Schubert 2006, 13). Recognizing that a strong and stable state
is in their best interest, the people currently accept CCP’s one-party rule (Heberer
and Schubert 2006, 13), and take corruption more or less as a price for the reform
and an evil that will eventually be cured as reform deepens. In the long run, “as long
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as the CCP manages to convince the people that it can effectively provide stability
and prosperity, and that it intends to make its authority fair and just by strengthening
the rule of law and by implementing more political participation (albeit without
effectively challenging Communist supremacy), it does not have to face any serious
challenges” (Heberer and Schubert 2006, 13). However corruption, if uncontrolled,
will eventually become the ticking time bomb that finally explodes. Whether and
when it will explode depends on whether economic development will be sustained at
a level that enables the public to continue their support of the regime, and whether
the government can keep corruption under reasonable control so as to avoid
egregious violations and gross inequity. Before these threats emerge, some level of
corruption may be considered temporary concomitants of market transitions and as
such a necessary evil.

Conclusion
The Communist regime of the People’s Republic of China was born amidst
the Chinese nation’s quest for its survival, stability, and security in the modern age.
The regime went through a paradigm shift after the death of Mao Zedong, the
People’s Republic of China’s founding father. Under Mao’s leadership the CCP’s
goal was to institutionalize revolution; Under the leadership of Deng Xiaoping,
Mao’s successor, economic development has become the central task of the CCP and
the government. Deng seemed to believe that prosperity secured a regime. History
might eventually prove that his inclinations were right: popular support for the CCP
138
regime is high as the majority of people have derived benefits from Deng’s economic
reform.
Deng’s economic reform was gradual and not immediately accompanied by
political reform. During the reform era, opportunities for self-enrichment have
greatly increased, while the regime has remained highly hierarchical and elitist. As a
result, corruption grew and spread. In the reform and market transition era, the
traditional practice of gaunxi was widely utilized for corrupt profiteering, and
qianguize (hidden rules) emerged as the result of illicit bargaining in unlawful rent
seeking. Supervision of government power, however, remained weak. The
government obviously prioritizes development over anti-corruption. As a matter of
fact, there is evidence that corruption has actually helped in the economic reform
process, especially in reducing opposition to the reform within the Communist cadre
camp and in informally compensating those officials who have supported and made
contributions to economic reform.
As long as corruption does not threaten the regime, it is unlikely that the
Chinese government will change its existing anti-corruption practices characterized
by selective enforcement of anti-corruption measures and toleration of less vicious
forms of corruption that pose no direct threat to the regime. It is the regime’s
concerns with survival, stability, and security that determine its anti-corruption
policies, not vice versa.
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CHAPTER SIX
CONCLUDING THOUGHTS

The contemporary Chinese government resembles the pre-modern imperial
government in several aspects: both are highly hierarchical and authoritarian, both
embrace elitism, and both resort to control mechanisms to maintain social cohesion
and stability.
First, today’s CCP, like the ancient emperors of China’s earlier history,
emphasizes its unchallengeable authority and has constructed a highly authoritarian
structure to support its power monopoly. Even the CCP government structure
resembles the ancient imperial government: the highest CCP central authority and
the Politburo function like the emperor’s inner court; the bureaucrats of various
central government ministries resemble the imperial bureaucrats in the outer-court;
the provincial and local governments perform their daily administrative functions as
they did in ancient times; and the community-level cadres are like educated
Confucian elites/gentries of the imperial era (Fairbank 1986, 430). The top CCP
leadership holds the administrative, moral, and ceremonial authorities comparable to
those reserved for emperors. In this regard the CCP has resumed the role of a
Confucian sage king, who combined supreme moral, ceremonial, and political
authorities and unified the people into a single state-family. The CCP promises what
the traditional monarch promised their subjects: preserving China’s unity and glory,
protecting people’s safety and livelihood, maintaining peace and stability; promoting
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morality; and administering justice, etc.. To act like sage kings, ancient emperors
were insistent upon their infallibility, moral superiority, and entitlement to
obedience. The CCP does the same.
Second, the CCP, like pre-modern Chinese emperors, relies on elites for
administration of the vast country. CCP membership is reserved for those who the
regime considers worthy for potential leadership roles, just as the licentiate was a
path to imperial civil service. Aspirants at civil service in both ancient and
contemporary China are typically required to be drilled in the official ideology of the
regime – either Confucianism or Communism, and have to prove their loyalty to the
regime. Once a person assumes an official position, the office-holders are given
titles, authorities, prestige, amenities, discretion, information, and trust. They
therefore enjoy privilege, status, and superiority over those “outside the system.”
Government officials are also in a better position to protect and enrich their families
and relatives. Elitism reinforces the differentials between societal members and
distinguishes the upper class from the commoners. Unlike the aristocracy, the elitist
ranks are open to the bright, ambitious, diligent, and capable. As a result, elitism
inspires the young and capable and attracts them into service to the regime. Privilege
and power are offered in exchange for the elites’ allegiance.
Finally, both the imperial and contemporary governments of China resort to
control mechanisms to ensure stability and security of the society. In ancient China
the imperial government controlled ideology, residence, rural neighborhood
organizations, personal movement, and occupations to maintain its tight control over
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the populace. Similar mechanisms were used during the Maoist regime. Although
the contemporary Chinese government’s control on personal movement and
occupation has been relaxed, two important measures still stay in place: household
registration and personal file. The government is contemporaneously tightening its
control on the media and even the internet, a modern creation that has greatly
facilitated the free flow of information (Wong 2003, 43).
All of the measures described above were designed and are constantly
reinforced to ensure the survival, stability, and security of the regime. Indeed,
China, a vast, populous, and internally diverse country, has no experience with
modern constitutional democracy, nor any cultural confidence that the western style
of democracy will be suitable for China. Even Doctor Sun Yet-Sun, the primary
advocate for constitutional democracy for China, believed that democratization of
China must be accomplished gradually and through three stages: stratocracy,
political tutelage, and constitutional democracy (Zheng 2004, 52). Liang Qichao,
one of the most influential thinkers in modern Chinese history, observed that
“Chinese society lacked the common bond and communitarian ethic that was
necessary to create ‘a people’ out of ‘a multitude’ to establish the foundations of a
modern, democratic state” (Sullivan 2006, 176).
Indeed, all regimes in Chinese history (not including Taiwan and Hong
Kong) have been based on an authoritarian model. The Chinese people hold deep
respect for those “strong men” (weiren) who have successfully held the country
together and amplified their power, as necessary, through authority imposed from the
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top. People were told, over and over again, that only a strong government and strong
leader can ensure China’s survival, stability, and security. The regime’s goals were
defined and redefined to give substance to survival, stability, and security. In ancient
time, emperors promised a safe, peaceful, and self-sufficient regime ruled by a
benevolent sage king. The Nationalists promised modernization, democracy, and
nationalism for the country. The CCP under Deng’s leadership focuses on economic
development and has promised prosperity for its people. No matter how the
regime’s goals are explained, the government is always given an important role to
play. The regime always tries to make the people believe that a powerful,
indispensable, omnipotent government is necessary for the people’s benefit. The
regime’s ends and goals are frequently cited to justify the government’s monopoly of
power, command of resources, and sometimes intrusion upon individual rights.
A highly authoritarian regime tends to generate corruption. A common
problem with the imperial and the contemporary Chinese governments is the
problem of agency. Officials, who exercise power on behalf of the ruler, are
essentially the ruler’s agents. All principal-agent relationships involve the potential
problem of incomplete and asymmetric information between principal and agent, and
the likelihood that the agents utilize the informational asymmetry to benefit
themselves rather than the principal (Acemoglu and Zilibotti 1996, 1999). In order
for an authoritarian system to function, the owner of the regime (emperors in ancient
China and top CCP leadership in contemporary China) must rely on its officials to
perform administrative functions and carry out government policies. The officials, in
143
the process of discharging their duties, are under constant temptation to use their
power for their own benefit and the benefit of their families rather than for the
regime. Asymmetry of information between the principal and the agent makes abuse
of power and self-enrichment possible. The highly hierarchical, authoritarian system
deters free flow of information from people at the grass-roots level to the top
government authorities. The officials, who stand between the people and the rulers,
share an elite status and common needs and concerns, and are subjected to similar
temptations of engaging in corruption. As a result, they are likely to protect each
other and to perpetuate a system which provides them with power and privileges as
well as opportunities for their self-enrichment. Therefore, the solidarity among
officials aggravates the informational asymmetry between the principal and agents.
A highly hierarchical and authoritarian societal structure also fosters corrupt
conduct among the masses. The masses, acting in self-protection, adjust their
behavior by seeking ways to get around burdensome laws and restrictions, political
persecution, anonymous bureaucracy, confiscation, material scarcity, burdensome
taxes, and similar burdens or harm from the government. They are compelled to
resort to secret and informal means to make their lives more tolerable, human and
humane, even comforting. The commonly used informal means include social
cohesion, community support, and devious ways to penetrate the officialdom to
prevent implementation of oppressive laws, gain exemption, obtain special favors,
win cooperation/tacit support, evade decrees, and gain sympathy with their cause. An
144
example is traditional practice of familism and guanxi in ancient and modern times
alike.
Qianguize (“hidden rules”) came into being through repeated interactions
between officials and the people they are entrusted to govern. As secret systems
perpetuating informal practices, “hidden rules” attach price tags to the benefits
bribers are seeking, and impose moral obligations on the officials to ensure delivery.
Qianguize was prevalent in pre-modern China and is widely practiced in
contemporary China. Under contemporary market conditions, it has evolved into a
means of illegal rent-seeking.
Sometimes the government chooses to tolerate corruption when doing so
secures the regime and its aims, rather than hurting it. One example is the traditional
emperor’s tolerance of gift exchanges among the officials. A contemporary example
is the CCP government’s tolerance of its officials’ manipulation of the dual-track
pricing system for illegal profits, its encouragement of sideline businesses affiliated
with government agencies, and its non-investigation of kickbacks and bribery in
economically developed areas. In ancient as well as modern times, the regimes
sometimes relaxed its open rules to give their officials some room for self-
enrichment – as an informal means of rewarding their job performance and loyalty,
and as a token of “grace.” At the same time, investigation of corrupt activities is
constantly used as a political means to punish political enemies and remove those
whose loyalty is in question. Selective enforcement of anti-corruption measures is
145
an effective means of controlling officials as well as showcasing the regime’s moral
stance.
An authoritarian system’s inherent tendency to foster and entrench
corruption, officials’ self-interest, agency problems and agency costs, elitism and the
resultant solidarity among officials, tolerance by the regime, erosion of formal rules
and norms, inability of the masses to supervise administrative power, submission of
the people to administrative power, and culturally-conditioned practices of resorting
to informal means to satisfy personal needs, all combine to encourage, reward,
perpetuate, and institutionalize corruption. Consequently, corruption invades every
corner of China’s political, economic, and individual life.
When does corruption threaten a regime’s survival, stability, and security?
One should recognize that current Chinese society differs from traditional
agricultural societies. In a traditional agricultural society, corruption was essentially
a zero-sum game. In such a society, the regime relied on agricultural productivity
for its support. Industrial and commercial activities were underdeveloped, and the
society was static and stable. The overall wealth of the society was rather limited.
As corruption grew and spread, more and more resources were taken away from the
masses (mainly peasants) and centralized into the hands of the elites and the
powerful, who had artful means to avoid taxation. Eventually, the regime’s revenue
base was so hampered that it lost its ability to cope with crisis. The living situation
of the masses became so destitute that they could no longer tolerate corruption as
well as the corrupt regime. As a result, a dynasty perished either as a result of
146
external crisis, or at the hands of revolting peasants. Corruption eventually doomed
a regime, although the process sometimes took a long time.
The situation in contemporary China is different. Corruption seems to
coexist with prosperity. Burgeoning economic development continues in the face of
corruption and old-fashioned communist monarchy, and because development has
benefited so many, even private entrepreneurs seem to be quite at peace with the
current state of affairs although they are often victims of abusive, arbitrary, and
corrupt use of official power (Di Felice 2007). Indeed, in today’s China there is not
only corruption, but also entrepreneurship, innovation, international trade, and
increasing opportunities for professional advancement. China’s economy continues
to grow, and new wealth is being created on a daily basis. Judged by the
performance of China’s economy and China’s increasingly active role in
international politics, the regime looks strong and enjoys broad-based popular
support. Andrew Wedeman’s observation is that
the apparent contradiction between “worsening” corruption and
China’s extraordinary high rate of growth might be, in part, a function
of ... the forging of a collusive relationship between high-ranking
cadres and the emerging business community, wherein those with
political power have material incentive to facilitate profit-making by
their “business partners” (Wedeman 2004, 921).

At the same time, the Chinese “bourgeoisie” expresses more interest in
political stability than in political reform particularly because they are bound to the
Party-state “through a web of policies and institutions” and see their success largely
dependent on the success of the state (Perry 2007, 8). This has led some scholars to
147
conclude that the current Chinese regime and its one-party rule “could be maintained
for a long time to come” (Heberer and Schubert 2006, 12).
The question remains as to how long the status quo can be maintained. Some
scholars, like He Qinglian, argue against an over-optimistic assessment of China’s
political future in light of the “steadily widening income gap between those who are
part of [the prosperity] club and those who are left out, and a trend towards
‘polarization’ of wealth, where the rich get richer and the poor poorer” (Di Felice
2007; He 2004).
Clearly aware of the danger of over polarization of wealth and public
discontentment with corruption, the CCP government has taken a series of policies
and organizational measures aiming to ease tension in the society and contain
corruption. This is evident from the CCP leadership’s slogan of building a
“harmonious society”. According to Hu Jingtao, China’s President, “a harmonious
society should feature democracy, the rule of law, justice, sincerity, amity and
vitality” (Xinhua 2005). This comprehensive goal encompasses at least seven
elements: (a) sustained, rapid, and coordinated economic growth, with special
emphasis on improving the life of farmers; (b) developing socialist democracy,
meaning creating a more democratic policy-making mechanism to increase input
from ordinary people; (c) actively enforcing the rule of law, meaning to ensure that
the powerful are kept under check and are held accountable for their misdeeds; (d)
strengthening ideological and ethical build-up, meaning promoting such virtues as
honesty, unity, fraternity, and professional ethics; (e) maintaining social equity and
148
justice, meaning balancing different interests in the society and ensuring equality in
terms of personal rights, opportunities in business competition, and wealth
distribution; (f) establishing a potent conflict resolution system to “handle the
people’s internal contradictions,” especially for those cases that pose a risk to the
overall society, such as labor and peasant unrests; (g) beefing up environmental
protection (Xinhua 2005). At the same time, the CCP has been adopting more
rigorous rules and measures to counter corruption. On 24 February 2010, the CCP
Central Disciplinary Committee issued a new “Certain Principles Regarding Ethical
Conduct for CCP Officials,” targeting many kinds of currently-existing corrupt
conduct, including accepting valuable gifts, holding interests in private businesses,
using public funds for personal pleasure, misappropriation of public funds,
irregularity in official selection and promotion, seeking benefits for one’s relatives
and friends, waste of public funds, interfering in the open market for personal gain,
and falsification of accomplishments for personal political advancement (Principles
2010).
However, building a “harmonious society” and fighting corruption is easier
said than done. A number of problems or paradoxes hamper, or may eventually
doom the CCP government’s efforts.
First, any serious anti-corruption efforts will be met with fierce resistance,
given the prevalence of corrupt practices among the CCP officials and the magnitude
of the impacts of anti-corruption measures on those who have benefited from the
status quo and are actually controlling the operation of the national and local
149
economies. Since the government signaled its intent to intensify its anti-corruption
campaign, “[i]ncreasing numbers of corrupt government officials flee the country
each year with money they have accumulated, and many others doggedly lay their
plans to do so before they are put under the spotlight of anti-corruption campaigns”
(Di Felice 2007). “The flight of capital – in addition to the net financial losses and
the consequent dangers these entail – shows a mounting sense of crisis among the
privileged class of Chinese bureaucrats” (Di Felice 2007, He 2004). Because the
support of CCP bureaucrats and the rich and powerful class associated with them is
itself essential to the survival, security, and stability of the regime, the government’s
anti-corruption measures, which were designed to ensure the survival, security, and
stability of the regime, face a dilemma: whether to further intensify enforcement in
order to please the poor, or to continue to selectively enforce these measures to target
the worst and the disobedient while avoiding alienation of the rich and privileged. If
the government takes the path of selective enforcement, how will the new measures
be different from previous anti-corruption efforts and make a real difference?
Secondly, “fighting corruption demands effective regulation, the necessary
conditions of which are the existence of genuine countervailing institutional and
societal power” (Williams and Beare 1999, 124). At the very minimum, there should
be “strict separation of legislative and executive powers so as to allow for genuine
check and balance on the power of the officials, even the Party itself” (Brown 2006,
3-4). At the same time, the Party should open up to outside scrutiny (Brown 2006, 3-
4). There is no evidence that either will be happening soon. To the contrary, there
150
have been signals of setbacks. For example, in 2008 Wang Shengjun, a career CCP
cadre who is not a lawyer and has never been a judge for a single day, succeeded the
reform-minded Xiao Yang as the President of the Chinese Supreme People’s Court.
His recent comments on the necessity of the Party’s leadership in implementing
judicial reform (Wang Doudou 2009) signified that there is no agenda for creating a
genuinely independent judiciary capable of exercising “checks and balances” in
relation to the power of the Party. At the same time, the current CCP leadership
shows less tolerance to criticism directed at the CCP leadership, as evidenced by
magnified internet censorship launched since 2008, and the increased number of
scholars and civil rights advocates jailed or exiled for their outspokenness (Foster
2009). There is “little sign that China’s rulers are prepared to trust ordinary people
with a real say into how their country is run,” said He Weifang, a well-known
Chinese law professor (Foster 2009).
Finally, oversight and enforcement do not keep pace with promulgation of
new rules and regulations. As a result, rules and regulations have lost their teeth. To
take the “Certain Principles Regarding Ethical Conduct for CCP Officials” as an
example: despite the breadth of coverage of the Principles, only the CCP in-house
measures are available for enforcement of the Principles. As a result, enforcement of
the Principles was delegated to CCP committees and disciplinary organs charged
with oversight of officials at the corresponding level. This in-house supervisory
mechanism has proven grossly inadequate for three reasons: (1) the CCP disciplinary
organs lack independence from the CCP chief executive officials they supervise; (2)
151
the CCP disciplinary organ’s encroachment on judicial power; and (3) lack of legal
power to bind non CCP members (Gong 2008, 150). Despite these obvious
shortcomings, the CCP still chooses to rely primarily on the Party organizational
mechanism for anti-corruption enforcement, primarily for the purpose of ensuring
that all critical powers, including the power to investigate and remove officials,
remain vested in the Party.
Assuming that the CCP government fails to control corruption, what might
happen eventually? According to Hilton Root, “[c]orruption in transition is one
thing, corruption as a well-defined rights system is another. The grave danger of the
Chinese reform process is that it may be stuck in the middle” (Root 1996, 750). As
Di Felice has observed, this scenario of being “stuck in the middle” will not pose a
serious threat to the CCP regime only if “it provides for the economic efficiency
from which the leadership continues to draw its legitimacy” (Di Felice 2007).
However, the internal economy of corrupt networks will inevitably become a source
of contradiction and instability that eventually contaminate the overall economic
environment (Di Felice 2007, Johnston 1986). The danger comes from multiple
sources: from within and outside of the corrupt systems, and from the central
government’s loss of ability to stay in control of the economy.
First, internal strife and contradictions within the corrupt camp may hamper
economic efficiency. According to Michael Johnston,
key subleaders and factions may command a disproportionate share of
the spoils long after their political performance has entered a decline.
Networks of obligations and exchange can thus become rigid and
152
overly complex, as multiple standards of reciprocity emerge between
leaders and various factions; the organization may adapt poorly to
changing circumstances or fall victim to factional disputes (Johnston
1986, 468).

Second, because corruption perpetuates the monopoly of the powerful and the
privileged on scarce resources and opportunities, it will continue to instigate
animosity towards power and wealth among the poor and the weak, especially when
they perceive little opportunities for their own self advancement given the entry
barrier imposed by the incumbent interest-holders. An often discussed phenomenon
in contemporary Chinese society is the widespread sentiment of “hate the rich”
among the less well-off. According to Mao Shoulong, Professor at People’s
University of China School of Public Administration, the “hate the rich” can be
interpreted into “hate inequality” (Mao 2006). At the same time, “hate the rich”
demonstrates general lack of trust in the Chinese society, and particular suspicion of
the rich and the source of their wealth (Yang and Wang 2007). Corruption has
contributed significantly to the widespread skepticism towards the powerful and the
wealthy in the Chinese society.
Finally, and more seriously, systemic corruption may eventually result in the
central government’s loss of touch with reality and its capability to predict the result
of or effectively carry out its policies. If this worsens, the train of the economy may
be derailed. This is because corruption always involves cheating and bending of
rules and regulations in service to the individual, departmental, or factional interests.
As a result, it is imaginable that excessive power in the hands of local officials and
153
toleration of corruption will eventually inhibit “the authority of the central
government and its ability to steer the economy through essential macroeconomic
policies, e.g., the consolidation of national fiscal and monetary system, commercial
regulations, redistribution, and market integration” (Di Felice 2007, citing Goldstein
1995).
As a result, if corruption persists or continues to worsen in Chinese society,
“the objective of preserving the political status quo may come to collide with the
imperatives of the economy” (Di Felice 2007, citing Schramm and Taube 2003). If
this happens, the regime will be endangered.
In addition to the analysis above, given from a practical perspective,
corruption is also inherently wrong from a moral perspective, and should be fought
against for that reason alone. Failure to do so undermines a regime’s moral
authority. As a result, the government constantly takes action to tackle scandals,
address gross corruption, and punish the worst perpetrators, so as to assert its moral
authority.
From the perspective of the regime, the formula of “benevolence, glory,
stability, and accountability” is probably the best tactic to secure its continuous one-
party rule (Heberer and Schubert 2006, 14). However, corruption, which grows and
spreads in close relation to the regime’s ideological, institutional, and political
choices for the purposes of ensuring its survival, stability, and security, now poses a
serious threat to the regime and may doom it in the long run if unaddressed. To be
successful in securing the regime, the government will need to address the
154
institutional aspects of modernity sooner or later, and make serious efforts at
advancing the rule of law, enhancing public oversight over government bureaucracy,
strengthening the people’s congress system, and broadening people’s participation in
the political process – at least at the local level (Heberer and Schubert 2006, 13). It is
only through serious political reform and effective institutionalization of checks and
balances can corruption be contained, hopefully minimized. For this purpose,
China’s institutional reform and political liberalization might be inevitable in the
end.
To find an effective cure for systemic corruption, the government may also
need to look beyond the officialdom. The emerging Chinese civil society might offer
some hope, although Chinese civil society, especially grassroots citizen
organizations, is still weak and immature. China’s emerging civil society is a
separate, rather complex research topic beyond the scope of this dissertation.
In short, anti-corruption efforts, though urgent, is not an easy task. At present
the prospect of the Chinese government’s anti-corruption campaign is still uncertain.
Corruption, a by-product of the Chinese governments’ governance system,
ideologies, policies, and agendas chosen to ensure the regime’s survival, security,
and stability, poses a serious threat to the regime’s future survival, security, and
stability. To effectively address corruption, the government may have to launch
wholesome political reform to increase transparency, judicial autonomy, checks and
balances on administrative power, people’s participation in government decision-
making, and freedom of speech, in hope of increasing citizens’ ownership and trust
155
of the regime and imposing oversight over administrative power. Before the CCP
leadership makes its resolution to launch comprehensive political reform, the status
quo may well be maintained. Significant changes may not happen until the CCP
regime faces imminent threats to its survival, stability, and security.
156
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Abstract (if available)

Abstract The aim of this dissertation is to examine systemic corruption in relation to ancient and contemporary Chinese regimes in which corruption has been prevalent. The focus is on an examination of how corruption arises in regimes, how corruption has become systemic and entrenched in the Chinese society, and to what extent corruption helps and hurts the regime.

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Asset Metadata

Creator Miao, Jia Ming (author)

Core Title A comparative study of administrative corruption in ancient and modern China

School School of Policy, Planning, and Development

Degree Doctor of Philosophy

Degree Program Policy, Planning, and Development

Publication Date 10/26/2012

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag China,comparative study,Corruption,OAI-PMH Harvest

Place Name China (countries)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Caiden, Gerald E. (committee chair), Chen, Baizhu (committee member), Tang, Shui Yan (committee member)

Creator Email cnnihaoma@yahoo.com,jiamiao@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m3513

Unique identifier UC1104985

Identifier etd-Miao-3825 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-413308 (legacy record id),usctheses-m3513 (legacy record id)

Legacy Identifier etd-Miao-3825.pdf

Dmrecord 413308

Document Type Dissertation

Rights Miao, Jia Ming

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu