Bloomberg News

Chinese Leaders Take Aim at Extravagance to Bolster Party

December 05, 2012

Chinese Leaders Take Aim at Extravagance in Bid to Bolster Party

An attendant pours wine during a banquet marking the 63th anniversary of the founding of the People's Republic of China in Beijing on Sept. 29, 2012. Photographer: Feng Li/Getty Images

China’s new Communist Party leaders pledged to abandon extravagance, cut down on lavish receptions and live more frugally, amid a broader push to stamp out corruption and win back people’s trust.

Officials who go on trips shouldn’t bring big entourages, and there should be “no welcome banner, no red carpet, no floral arrangements or grand receptions” when they arrive, the official Xinhua News Agency reported, citing a statement from a meeting yesterday of the ruling Politburo.

The decision to pare back expands on demands Xi Jinping made about cutting bureaucracy when he was appointed party general secretary in a once-a-decade leadership transition last month. Beset by corruption scandals and evidence of opulent lifestyles and malfeasance by top-level officials, party leaders are seeking to shore up their legitimacy with economic growth at a three-year low.

“There is very much a perception that wealth and power are concentrated at the upper echelons of the Communist Party,” said Glenn Maguire, principal of Asia Sentry Advisory Pty Ltd. in Sydney and former Societe Generale SA chief Asia economist. “While cutting back on red carpets and flowers is going to be minimal in dollar terms, it is a very strong visual and potent symbol that change is afoot.”

Maguire said the move is part of a broader effort by the leadership to display a more common touch and confront scorn that has spread over the Internet concerning the perception that the elite have profited most from the country’s economic growth, which averaged 10.6 percent a year from 2003 through 2011.

Red Carpet

The party’s top leadership and its new discipline chief Wang Qishan, who previously oversaw the financial sector, have begun an anti-corruption drive in the weeks since they took over, according to Kerry Brown, a professor at the University of Sydney, who previously served as a British diplomat in Beijing.

China’s anti-corruption commission is investigating Li Chungcheng, the deputy party secretary of Sichuan Province, the New York Times reported today, citing Xinhua. It said Xinhua later deleted the article on Li.

A Chinese village official in Shenzhen has been put under investigation over accusations that he accumulated assets of more than 2 billion yuan, according to Xinhua. An official in the municipality of Chongqing was fired Nov. 23 after a sex tape of him circulated on the Internet, Xinhua said at the time.

“Rhetorically they’ve launched an anti-corruption drive, but the meat is in who they finally target and prosecute,” Brown said. “When that happens, we’ll know if they’re serious.’”

Inspection Tours

The Politburo announcement addresses a number of extravagances that the party has been criticized for online. Leaders should impose fewer traffic controls during their travels and “inspection tours” should be limited, the Politburo said.

“If we ask other people to do something, we should do it first,” the body of top leaders said in the statement. “If we ask other people not to do something, we certainly must refuse to do it as well.”

Public criticism is mounting over the accumulation of wealth by officials and their families. Xi’s extended family had business interests in minerals, real estate and mobile-phone equipment, including investments in companies with total assets of $376 million and an 18 percent indirect stake in a rare- earths company with $1.73 billion in assets, according to public documents compiled by Bloomberg. The New York Times reported in October that Premier Wen Jiabao’s extended family controlled assets worth at least $2.7 billion, citing a review of corporate and regulatory documents. Lawyers acting on Wen’s behalf denied some of the article’s central claims, the South China Morning Post reported.

Accepted Bribes

The extended families of ousted Politburo member Bo Xilai and his wife, Gu Kailai, accumulated at least $136 million in company shares and property, according to regulatory and corporate filings compiled by Bloomberg.

Bo, former party secretary of the Chongqing municipality, was ousted in March and his wife was later convicted in the murder of British businessman Neil Heywood. Bo himself now faces criminal charges for allegedly abusing his power in her case and accepting bribes dating back to his time as mayor of the northeastern city of Dalian.

One test of the party’s willingness to tackle corruption would be to address its leaders’ accumulation of wealth by issuing disclosure reports that could be audited, said Andrew Wedeman, a political science professor at Georgia State University and author of “Double Paradox: Rapid Growth and Rising Corruption in China.”

“The party is constantly announcing that this time it is going to get tough on corruption,” Wedeman said. “The leadership faces a real dilemma because, as some in China have said, corruption may kill the party but fighting corruption will certainly kill it.”

To contact Bloomberg News staff for this story: Nicholas Wadhams in Beijing at nwadhams@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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