General OpEd Article
By Graeme Mills
Corruption in China
Puritanical approach misses the point.
The ‘west’ has evolved fairly open and relatively corrupt-free institutions: law, government, bureaucracy, business. Government’s in the west raise money through taxes, fees and charges. That money is redistributed to pay for the institutions, bureaucracy and the business of government. A significant proportion of the rest is used to achieve essentially socialist aims, ie: social justice.
Alas, a significant portion is wasted.
High taxes are needed to keep the whole edifice corrupt-free.
It’s a good system and one we in the west understand.
We see other systems, which demand money for specific services rendered by an official or bureaucrat, particularly in government or the State bureaucracy, as corrupt. We laud our system as open and transparent.
China evolved its institutions over millennia. Its bureaucracy is based on Confucian principles.
One significant feature is that not much money is spent on paying officials. Rather, the officials charge directly for their services. Hence, over millennia, entrance to an official post, via the examination system, was a way of advancing yourself and your family.
Entrance to an official post also required that other great Chinese institution, ren ji guan xi. In the west we call it networking, or the 'old school boy network'. However it is much more subtle than that and must be understood if you want to (successfully) do business in China.
There is a direct relationship between taxes and how much a government official is paid in any society.
High taxes and high pay for government officials mean they do not have to find revenue from other services. Low taxes and low pay to government officials mean that other services generally attract a …. non-official fee.
In China it is best to think of these non-official fees as a direct form of taxation. It is very efficient really, as you only pay for the service you want.
It has worked for millennia in China. It is different to the west, but in China it works and like all things that work, probably doesn’t need fixing all that much.
The anti-corruption drive in China is to stamp out high level and excessive non-official 'fees'. The penalty for being too greedy can be death.
China also has to address blatant corruption if it want so engage with the 'west' commercially.
China will undoubtedly evolve to meet the demands of doing business with these wai guo ren (foreigners). Well, at least China will become better at the P.R. However it is fanciful to think that a system that has evolved over millennia can be speedily or completely changed. To paraphrase Deng Xiaoping, China will do business the western way – however it will be with Chinese characteristics.
See Also Kaixin's: Corruption v 'li shang wang lai' 礼尚往来