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China: Corrupt Me. Corrupt Me Not.

Posted in China Business

Transparency International just came out with its newest ranking of countries by corruption and China comes in tied with Morocco, Suriname, India, Peru, and Brazil for 72nd out of the 179 countries rated. China’s ranking (at least as compared with those countries of which I have familiarity) seems about right to me.

Denmark, New Zealand and Finland tied for first place. Singapore placed 4th, Hong Kong 14th, Japan 17th, Taiwan 34th, Korea 43rd, and Vietnam 123rd. Not surprisingly, corruption in most countries closely correlates to their economics. Russia is a notable exception to this, placing 143rd.

I would have liked to see how China’s ranking this year compares with previous years, but I was not able to find previous lists.

  • http://www.renmenbi.com renmenbi.com

    Yeah definitely it does feel right for this ranking. I’ve travelled around the world and China is far from being corrupt. Although people has to differentiate “giving gifts” in the chinese culture as not a bribery, then they’l understand properly the ranking.

  • http://chinaandi.typepad.com/ China and I

    The level of corruption is also linked to the level of education (the higher, the better!)and red tapes (the higher, the worst!).

  • Hui Mao

    I wish there is some sort of corruption survey for different regions of China. I don’t know how the surveys here were conducted but I’d expect most of it is based on preception of corruption in the major coastal cities which is probably quite different from the levels of corruption in other parts of China.

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  • Andy

    Interesting.. with it’s legendary bureaucracy, India is tied with China @ 72. And the US is #20, below France..

  • Anonymous

    In China,especailly east coast cities,the most stable and highly-paid job fresh graduates can get is goverment officer(Public servant).Some popular position would attract more than one hundred people competing for only two or three tickets.You would need to be highly educated,you need to be active,you need to have your family or their friends having connections with people in the goverment.
    Compared with countries in southeast asia,the corruption in China is a piece of cake.
    When we are talking about corruption,sometimes politics get involved.The criminal justice system is far away from indenpendent,especailly when people with power get involved.
    My boss told me,the system has been improved.We are making progress,but it takes time.

  • http://chinaandi.typepad.com/ China and I

    Talking about South-east Asia my friends told me that in Indonesia, the country is even more corrupted since the departure of Suharto. They told me that public servants used to stay decades in the same job position so they just asked for every contract a small cut but now that Indonesia is a democracy, the president changes every four years so their public servants too. In order to get rich in a short time, they ask for bigger cut.

  • http://wangbo.blogtown.co.nz chriswaugh_bj

    And once again New Zealand leads the world! (well, with Denmark and Finland). Although I’m not totally convinced of the link between our economics and lack of corruption- I’m sure the economy does play a huge role, but I would also say that New Zealand’s small size and culture also play pretty big roles in keeping corruption in check. New Zealand’s small size makes it really hard to hide- unless you’re a sheep or you decide to go bush, I guess, but corrupt officials and business people generally are not sheep and tend to stay away from the bush. And our culture has traditionally been extremely conformist and intensely egalitarian. Not the kind of environment in which corruption can thrive.

  • http://twofish.wordpress.com/ Twofish

    The situation with cars is a bit more complex, as the expensive cars that you see in the car park are owned by the local government, and both the car and driver (and housing) are provided to local officials as part of the salary. It isn’t the case that the officials are getting money into personal accounts which they are using to buy cars.
    The question then arises about whether or not the local government should be paying for these expensive cars, but even there the situation is not black and white. The official cash salaries of government officials is quite low, and to keep people from going into private industry requires lots of perks.
    The trouble is that by having the local government own the cars and the perks, the central government has some authority to control and discipline local officials (i.e. if the official loses his official, he loses the car). If you ban all these perks, then they go off the books, and that’s not good.
    One essential part of any effort to fight corruption is that you must pay officials properly. If your officials are being underpaid, you won’t be able to fight corruption at all, and being able to pay officials well implies that there is a good tax system.

  • Tony

    Sounds about right – having the right connections does make a big difference all over the place, for example, getting a driver’s license without ever having driven a car – because you know someone…

  • http://badbadchina.blogspot.com nanheyangrouchuan

    Figures that a PRC poster like China_and_I would take a stab at democracy having a link to corruption. But the least corrupt countries I would venture to guess are ALL democracies.
    Corruption is more rampant in China than the survey lets on because it is so subtle, ie “gift giving”. Corruption is also a form of power, making other people give you things in return for your good graces. This form of corruption is more common in the countryside where no one form provincial capitals or Beijing can or will make much of an effort to help you.

  • http://chinaandi.typepad.com/ China and I

    NHYRC
    I think you misunderstood my meaning; I am not a PRC advocate neither a prosecutor. Corruption is not the privilege of rogue states or un-democratic states. It has also to do with bureaucracy, education and “savoir-vivre”. Singapore is not a model of democracy but the level of corruption is very low. India is a democracy but, by experience, I can tell you the corruption level is higher than in China. Japan is a democracy and a developed country but a very corrupted country. You just have to look in the past 30 years, how many prime ministers had to resign because of corruption. China has made improvements but the road ahead for a clean bureaucracy is far. I agree with you that corruption is subtle but not as much as in Korea or Japan. In China, you want to gain access to a job position for the “privileges” you can receive wherever you are working.

  • http://ellenvista.blogspot.com Yong ZHAO

    I saw the source that index upon, sorts of pretty official.If research cited the data coming from these sources, tell me the corruption in China is modest among other nations, I will not buy it. My experience is that that situation in China has become more worse than before. When the institution get better, the way how the corruption works evolved also. For example, five years ago, people may take “giving the judges money” as a kind of corrupt.But now, the way people bribing are vary. From offering a package of interests,such as giving share or stock (of course covered), sending officers’ kids abroad to study to building long term friendship with officers.

  • JL

    Nanhe,
    I’m a great fan of democracy too, and believe that a functioning democracy is an asset to any country. But the direct link with corruption is difficult to prove. Singapore is a not a democracy, but it has an extremely clean government and economy. Brazil is a democracy but it has levels of corruption equivalent to China.
    I think that democracy is an aid to economic development, and economic development tends to lead to lower corruption.

  • http://wangbo.blogtown.co.nz chriswaugh_bj

    Nanhe: You’re right in that the three countries tied for first place in Transparency International’s list are healthy democracies. You’re wrong for the reasons China and I and JL point out: Democracy does not prevent corruption, and there’s no reason that a lack of democracy will produce corruption. The world is a little more complex than that.

  • http://badbadchina.blogspot.com nanheyangrouchuan

    Oh yes, the “black and white” argument.
    India and China are tied for corruption in the rankings. Some may say India is more corrupt because officials there are more open about demanding gifts and grease, while in China you won’t be asked for a gift, but if you don’t you’ll spend a long time waiting for anything to get done.
    Japan has corruption, US has corruption, but not because the civil servants are so poorly paid (like the police) and have a marginal amount of bureaucratic power that they can leverage grease to make their lives a little better.
    Also, as Chinese people I’ve spoken to in the US have the opinion that corruption in the form of a drive to accumulate power and prestige occurs more often in non-democratic countries because the people there have no true feeling of control over their lives.
    Think about that when your favorite watering hole in China is closed down for not having the proper licenses for a karaoke machine, a big screen TV or too fire extinguishers.

  • http://twofish.wordpress.com/ Twofish

    The reason that I think democratic societies have lower corruption indices is that democratic societies tend to be richer and also tend to have working administrative systems and bureaucracies. This means that there is the wealth available to prevent corruption and the systems in place to prevent corruption.
    Also, curiously I don’t think that the average person in the United States has more control over their lives than the average person in China, and I don’t think that power in the United States is more evenly distributed than in China. In both societies, the number of people that actually run things is in the neighborhood of two to three thousand people.
    However, people in the US have the *belief* that they have more control, and that matters a lot. There are lots of processes and rituals in the United States system of government designed to give people the belief that what they think really matters, even when it doesn’t.
    In your typical mid-term House election, about 90% of the seats have already been decided, and the remaining 10% you are choosing between two parties that agree on about 90% of the issues. Senate elections are more open, but that is because the larger districts allow more campaign spending. Your chances of getting elected to Congress are nil unless you have money and connections.
    But still it is a much better system than China’s, for a number of reasons, not the least of which it is that is more stable. If something really bad happens in the US, and the Republicans are in power, they get blamed, voted out, and the Democrats come to power, and vice versa. Whatever happens, the system as a whole doesn’t collapse or really change in a fundamental way.
    Yes, you need money and connections to get elected to anything, but it is not impossibly difficult to get money and connections, and in the process of getting money and connections, you have to agree to play by some rules. This means that people who seek to challenge the system get absorbed by it and end up strengthening it.
    In China, if something really bad were to happen, people get angry, they can’t take their anger out by “voting the bums out” and so they get even more angry. This makes the system unstable. Also because there are isn’t a firm system of rules, it sometimes becomes difficult to absorb challengers into the system. This also makes the system unstable.
    Having the power elite in the United States maintain control by “manufacturing consent” (lawyers, lobbyists, and media consultants) is a lot better than maintaining control via using tanks and torture, and also more effective in the long run.
    The more the Communist Party of China relies on “effective propaganda” (I’m thinking here of Fox News and CNN) and less on brute force, then better things are……
    There is a weird sort of “doublethink” that some people have when it comes to democracy. On the one hand, people promote “democracy” but what they have in mind is a not a real system but some imaginary ideal system that doesn’t exist, and quite possibly can’t practically exist. I’m not interested in imposing a theoretical ideal system. I want to see real political systems in action.

  • http://badbadchina.blogspot.com nanheyangrouchuan

    “The reason that I think democratic societies have lower corruption indices is that democratic societies tend to be richer and also tend to have working administrative systems and bureaucracies.”
    When these democracies didn’t have money, freedom of speech, the hunger of journalists and the willingness of people to stand, fight and die for what they believed in made modern democracies what they are. The Burmese people in the future will look back withpri de on the people who are standing up now just like Chinese people can look back with pride on Sun Zhong Shan.
    “Your chances of getting elected to Congress are nil unless you have money and connections.”
    There are alot of unknowns from small districts in the US House, the only connections they needed were the ones voting for them or their opponents, and if you’ve ever seen a congressional ballot, there are more than just two parties on there.
    As for the rest of your comments, you would have Americans believe we live in a “Matrix” in which we really have no control. Big money does influence our government alot but if you’d take a few seconds to look at American history, we nearly had a second civil war between labor and corporations between 1880 and the Great Depression, and it was Americans’ willingness to fight as well as access to firearms that forced the US, state and local gov’ts to take the side of labor.
    “I want to see real political systems in action.”
    Like soldiers, police and party members shooting or rifle butting students, monks and old women?

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