The 20th Party Congress might well go down as one of the most significant in recent Chinese history. The reason for this is less due to Xi Jinping staying on for a third term, and more to do with the glaring discrepancy between the message that the leadership wanted to convey and the one which was perceived by audiences both domestically and globally. 

Xi wanted to stress stability but to many, there appeared to be a reinforced sense of uncertainty, not least because of his explicit support for China’s highly disruptive zero-Covid policy. Xi also wanted to show continuity, but again, there was a perception of disruption, especially regarding his predecessor Hu Jintao, who – in one of the most extraordinary moments of the Congress – was be removed from the stage for reasons still not fully explained. Finally, by surrounding himself with apparently unremarkable allies and long-term collaborators, Xi raised doubts about the prospects of much-needed reforms – many of them promised for years but yet to be delivered. 

But all is not quite doom and gloom. Xi’s opening speech – a sort of CCP manifesto for the next five years – was, to an extent, anti-climactic. It included little that had not been said before, belying the alarmist headlines in many Western media. Li Qiang – although somewhat tarnished by the chaotic Shanghai lockdown earlier this year – is expected to be the new Premier and has a generally business-friendly reputation; he is expected to continue his predecessor’s policies of supply-side reforms and trade liberalisation. 

Furthermore, the promotion of former Minister for Environmental Protection Chen Jining – an Imperial College graduate who spent ten years in the UK – to Party Secretary of Shanghai, means that Xi’s ambitious Net Zero goals and green development agenda is now a key performance indicator for Party officials eager to climb the career ladder. Regarding foreign policy, the appointment of the current Chinese Ambassador to the United States Qin Gang to the Party’s Central Committee (CC) – suggesting that he will be promoted to Foreign Minister at the next Two Meetings (Lianghui) in March 2023 – also indicates a willingness to manage US-China relations more closely. It is worth remembering that current Foreign Minister Wang Yi – a Japanologist – entered office at the height of the conflict over the Diaoyu islands and subsequently managed to put the bilateral relationship between the two neighbours on a more stable footing. Qin’s appointment could therefore be seen as a sign that Beijing is clearly worried about the friction between the two superpowers and wants to defuse tensions before it’s too late.

Finally, the removal of former Xinjiang Party Secretary Chen Quanguo – who was responsible for the alleged internment of up to a million Uyghurs – from the Central Committee, despite him not having reached retirement age, should equally be seen as a positive signal, confirming recent reports that Beijing is looking for an end to the controversial policy. 

Nonetheless, Xi’s unquestionable success at consolidating power at the head of the CCP will put increased pressure on him to make good on his promises to wean the Chinese economy from its reliance on unsustainable infrastructure spending and enact the reforms needed to increase domestic consumption. And if the Hu Jintao episode proved one thing, then time might not be on Xi’s side. 

Background 

Policies 
On 16 October 2022, Xi opened the 20th Party Congress with a nearly two-hour-long speech, outlining the Communist Party’s ‘manifesto’ for the next five-year cycle. A much longer version was published later, containing more policy details and theoretical musings on Marxism with Chinese Characteristics. Yet both Xi’s oral version and the longer written one included little which had not been mentioned elsewhere before.

Mentions of keywords in the Party Congress reports in 2012, 2017 and 2020

Analysts of Chinese Party-speak were quick to point out that this year, the number of mentions of the term security (安全) overtook mentions of the ‘economy’ (经济) compared to the two previous congresses in 2017 and 2012, leading to the conclusion by some that for Xi, the economy is no longer the government’s top priority. 

And indeed, references to economic policy were mostly summed up under the newish term of ‘new pattern of development’, which refers to such concepts as the dual circulation strategy (i.e., removal of local trade barriers and balanced trade), self-reliance in key technologies, green development, and common prosperity. Commitments to reform and opening-up, trade liberalisation and openness to foreign investment were duly repeated. 

On common prosperity, Xi started by noting that income distribution – meaning policies reducing income inequality both regionally and between income groups – is the ‘foundational system’ of the policy. But he also emphasised that job creation remains the principal tool to achieve this goal, underscoring Xi’s general distrust towards a Western-style welfare state. 

More specifically, Xi said that China needs to establish a policy system to boost birth rates and bring down the costs of pregnancy and childbirth, child rearing, and schooling. This is in line with last year’s decision to ban private online tutoring but could also herald a much more intrusive approach towards family planning, perhaps even a total ban on abortions or policies penalising singles compared to families with children. 

Most ominously, Xi announced that there would be more corruption crackdowns, indicating that the Party’s watchdog – now headed by Li Xi – would focus especially on ‘sectors with a high concentration of power, funds, and resources’. And while Xi did not specify what sectors he had in mind, the recent crackdown on public fund managers involved in China’s rapidly increasing semiconductor industry as well as the post-congress suspension of PBoC vice-governor Fan Yifei provide some powerful clues to the potential targets.

People 
Although any report by Xi attracts widespread media attention, the 20th Party Congress was not primarily about him, rather, it was about the people joining him at the apex of the Party. 

The top leadership of the CCP is a pyramidal structure consisting of the Central Committee (CC), the Politburo (PB) and the Politburo Standing Committee (PBSC). Each member of the PBSC must be a member of the PB, and all have to be part of the CC. To use a slightly imperfect analogy with the British parliamentary system, the PBSC represents the front bench of the CCP, while the PB and the CC are the cabinet and the backbenchers, respectively.

Leadership structure of the CCP after the 20th Party Congress

Unsurprisingly, the PBSC attracts most of the attention as it constitutes the Party’s top leadership organ and makes the key decisions on strategies, major policies and personnel changes at the national and provincial level. In short, the PBSC is the CCP’s (and thus China’s) board of executives. 

As such, the 20th PBSC is now almost exclusively packed by people with whom Xi has worked at various stages of his career. Only Zhao Leji and Wang Huning stayed on from the previous term. Zhao, who took over from Wang in the internal hierarchy, is now responsible for the National People’s Congress and thus decides which laws and regulations get passed by the country’s legislative body. Zhao also remains the only PBSC member whose career started in the Party’s youth organisation, the Communist Youth League. Wang, who was previously in charge of the Party’s secretariat, is now overseeing the Chinese People’s Political Consultative Conference (CPPCC), which, among other things, manages the so-called ‘United Front’, including its relationship with Chinese organisations abroad.

Of the four new entrants, all have worked with Xi previously: 

• Cai Qi has shared the longest common trajectory, working with Xi during his time in Fujian (1988-2002)
• Li Qiang was Xi’s deputy in Zhejiang
• Ding Xuexiang became his secretary in Shanghai, before following Xi to Beijing in 2013
• Li Xi was Party Secretary of Yan’an, the CCP’s stronghold during the civil war period and the place where Xi spent his time during the Cultural Revolution. Li was subsequently promoted to Party Secretary posts in the key provinces of Liaoning and Guangdong. 

Other key appointees share a similar background. He Lifeng, the new economic policy czar and successor of Liu He, started his career under Xi in Fujian province, while Li Shulei, the new head of China’s important propaganda ministry, was working at the Central Party School at the same time Xi was heading the institution between 2007 and 2012.

CBBC Outlook 

A curious feature of Xi’s preference for known faces is that nearly all of them hail from China’s prosperous and entrepreneurial coastal areas. Li Qiang is probably the most characteristic representative of the pro-business Party official, heading Wenzhou – a poster child of China’s private sector – in the early 2000s. He also served as Party sponsor for Alibaba’s Jack Ma and convinced Tesla to build its first gigafactory outside the US in Shanghai. 

Yet despite this background, businesses will expect more than just warm words of support from the new leadership. Many of the reforms outlined by Xi at the onset of the Congress have been on the agenda for years. And even though there has been some progress on legal institutionalisation and poverty alleviation, critical reforms, such as better access for private businesses to sustainable financing, the removal of local trade barriers, and stable public finances of local governments currently hooked on property sales and infrastructure investments, are yet to make visible headways. 

And while Beijing has promulgated one concept after another, be it the dual circulation strategy (to eliminate local protectionism), a national social credit system (to enable a nationwide exchange of personal and company information) or common prosperity (to reduce social equality), Beijing’s structural penchant for delegating policy implementation to local governments has often meant that it was tasking the fox with guarding the henhouse, thus limiting the very effectiveness of its reform initiatives. 

Whether Xi’s handpicked new team can take a more forceful approach and overcome local resistance remains to be seen, and we will probably have to wait until the next Two Sessions in March 2023 to get a better idea of his reform agenda. But the fact that Xi defied the convention of his two predecessors, who chose to step down after two terms, also means that pressure on him to deliver results or to designate a successor could grow rapidly. And given that China will have to exit zero covid before anything can move ahead, he will have to hurry.

Entering China is a key decision for businesses of all sizes. Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can provide you with the platform to unlock your potential.

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The quinquennial National Party Congresses are among the most important events in China’s political system. They also allow China watchers all around the globe to engage in their favourite pastime: speculating about leadership changes within the Chinese Communist Party. As seasoned – and not so seasoned – analysts are sharing their predictions about the composition of the Standing Committee of the Politburo – the current seven-man-strong leadership group which decides the fate of the world’s second-largest economy – here’s a brief guide for businesses and hobby Pekinologists in the arcane art of tea leaf reading.

Background

The National Party Congress (NPC) of the Chinese Communist Party – which takes place every five years – is undoubtedly the most important event in China’s political calendar. Unlike the National People’s Congress, which happens every year, the Party congress does not pass laws and regulations. It does, however, include speeches by senior Party leaders on the country’s policies.

What makes the NPC so important is that it selects the Communist Party’s leadership for the coming five-year period, thus determining who runs the country. And in a political system such as China’s, personnel is key.

On the surface, the selection of the top leadership is a democratic bottom-up process that starts well before the opening ceremony of the National Congress in October. Local Party committees select their delegates for the next level up, with provincial-level congresses deciding who to send to the national one in Beijing. In reality, however, candidate lists are determined by the Party’s powerful organisation department, currently headed by Xi-ally Chen Xi – himself a potential candidate for the Party’s highest governing body, the Standing Committee of the Politburo (PBSC).

During the National Congress, there will be further selections, including the membership of the Standing Committee. This – which includes the General Secretary – is the executive committee of the Politburo, which itself counts 25 members. Below the Politburo sits the CCP’s Central Committee (approx. 200 members), a sort of Party Parliament, that comprises the powerful Central Military Commission and the Central Commission for Disciplinary Inspection.

Just as with the nomination of NPC delegates, these selections are highly choreographed, with most candidates chosen by the top leadership well in advance. Yet how these posts are distributed remains a mystery even to the most seasoned China watchers.

Leadership structure of the CCP

Reading the tea leaves: A primer

Without unscripted interviews of Chinese leaders and their apparent ability to keep a poker face (which would put every professional card player to shame), China watchers have long had to rely on other methods to gauge who’s on their way up and who is on their way down. In the following paragraphs, we’ll introduce some of the concepts and sources analysts use to make predictions about the future leadership of the CCP.

First, there are two basic conventions which regulate the approximate number of PBSC members and the age limit for Party leaders. Yet none of these is written in stone. For example, during the Hu Jintao era, the PBSC had nine members. Under Xi, its number was reduced to seven, as it was during the second term of Jiang Zemin, Hu’s predecessor.

The age limit is similarly malleable. Generally, leaders who are older than 68 are set to retire, yet the then 69-year-old Wang Qishan was allowed to carry on as Vice President in 2017. The same exception could apply to some of the older current PBSC members such as Han Zheng (68-years-old) or Wang Yang (67-years-old).

These caveats notwithstanding, the convention would mean that at least four of the current seven PBSC members would have to retire by the end of the year. Premier Li Keqiang already announced at a press conference in March that he would step down as Premier, a move which almost certainly means his departure from the PBSC. The other two – Li Zhanshu and Han Zheng – are all past or close to the informal age limit. This means that in the absence of any significant promotion – e.g. Han Zheng taking over as Premier – they will almost certainly make way for younger candidates.

Current membership and age of the Politburo Standing Committee

So, who is going to replace the leavers? This is where the speculation begins. Without open candidacies or even public endorsements by current leaders, analysts must rely on other clues to estimate the promotion chances of Party officials. The most common indicators on which China watchers rely are: careers paths, affiliation and policy record.

Career paths

Career paths, and especially the speed of promotions, are the most widely used marker for analysts to judge a Party official’s potential to make it to the top. The reason for this simple: it is the only indicator which is public and can be tracked unequivocally via open sources. It also helps that official newspapers like the People’s Daily serve as a CCP Hansard of sorts, publicising major appointments and personnel changes.

Some researchers and China-focused think tanks have therefore collected impressive databases on recent promotions. For example, MacroPolo’s feature “The Committee” covers leadership changes at both the provincial and ministerial levels. According to Ruihan Huang, also of MacroPolo, higher demand for work experience – preferably in multiple provinces – has become a distinctive feature of leadership selection under XI. While in 2002, 15 out of 25 Politburo members had worked outside of their home province, the number has increased to 20 in the current setting.

Cross-province promotions to regions struggling with socio-economic difficulties are generally a good indicator of a promising career. Li Keqiang, for example, served as Party Secretary in economically depressed Liaoning and Hebei. And former General Secretary Hu Jintao famously started his career in Tibet. Thus, the promotion of former governor of Guangdong Ma Xingrui to the post of the Party Secretary of Xinjiang makes him a likely candidate for the next Politburo.

Affiliation

While promotions are important, the right backing within the Party is even more critical. Affiliations, especially to Xi Jinping and other top leaders (including retired ones) is a sine-qua-non for making it into the PBSC. Yet proving such support is notoriously difficult. The easiest way is once again to look at the public record or open source databases like China Vitae, which shows the complete career path of more than 5000 Chinese officials. Affiliations of cadres who worked with current leaders like XI when he was governor in Zhejiang are probably the easiest to identify. For example, Chen Min’er – the current Party Secretary of Chongqing – worked with Xi Jinping during his time in that province in the early 2000s before being rewarded with two provincial Party Secretary jobs in less than a decade.

Yet besides these obvious links, dividing Party members into neatly distinguishable factions is nigh on impossible. Academic concepts, such as the widely cited one by Cheng Li – a researcher at Brookings Institution – which divides Chinese rulers into Princelings (the offspring of former leaders) and ‘Populists’ (mostly alumni of the CCP’s own Youth League) – are too broad and assume an intragroup support which is hard to verify.

The truth is that as much as personal ties and leadership backing matter, policy experience, administrative competence as well as corporatist and regional representation all play a role in the selection process, making it possible for ‘compromise candidates’ to rise to the top of the Party.

Policy record and educational background

Obviously, ideology and individual positions on policy play a much weaker role in a Communist regime than in a pluralist society. What’s more, Chinese policymakers tend to reveal their individual positions only after they’ve secured a top leadership post. Until then, they usually toe the party line.

However, there are several features which help gauge the career chances of a leader and which might also indicate whether he/she will adopt a more pragmatic or a rather ideological course in office. First, there’s the educational and professional background. The rise of techno-industrial groups such as the ‘aerospace clique’ – which refers to cadres with a background in aerospace engineering and related industries – shows that degrees and expertise matter for a successful political career – especially when it corresponds to China’s broader development strategy.

The same logic applies to the policy record – especially as most leaders have hands-on experience as Party secretaries or ministers. What matters is less about pure GDP growth – which has turned out to be rather inconclusive predictor for career advancement under Xi Jinping – but rather experience related to a specific policy agenda such as Common Prosperity or financial stability. Thus, the selection of Wang Qishan to the PBSC in 2012 and the promotion of Liu He to the post of Vice Premier in 2018 were most likely due to their expertise in financial markets and credit risk.

What about rumours?

Rumours are an unfortunate part of dealing with any political system, not only China. And social media now makes it possible to spread the most unfounded assertions around the globe in less than a day – as the recent ‘coup rumours’ have demonstrated only too clearly. Luckily, many professional China analysts and Beijing-based journalists were quick in debunking these allegations.

Their nearly unanimous reaction demonstrates an important point: when dealing with Chinese politics, rumours are best to be ignored. Such mistrust even applies to personal and anecdotical accounts from more trusted sources such as the Wall Street Journal, the Financial Times or Party insiders-turned-dissidents like former Central Party School professor CAI Xia. The reason for this isn’t just an academic elitism favouring official primary sources over hearsay, it is also that rigorous research based on historical records (which obviously isn’t accessible for more recent events) has shown that most popular assumptions about Communist leadership politics are usually wrong. Given the generally short shelf life of both rumours and ‘scoops’ about personal rivalries, the safest best for China analysts is to stick to the advice: “Don’t listen to what people say, watch what they do”.

The CBBC View

We hope that this primer – although far from comprehensive – provides a few important markers that can help better understanding of Chinese politics and the selection process at the upcoming Party Congress. Even though predicting the final tally for the Chinese Politburo will always be a guessing game, knowing some of the key indicators for promotions within the CCP can provide important clues about the priorities of the Party’s top decision-makers (which goes well beyond the limited number of the PBSC) and future policy choices.

It also needs to be said that any composition of the Politburo and the PBSC will be – or at least will aspire to be – a faithful representation of the CCP’s own very diverse membership and their often conflicting interests. Being an organisation with more members than the population of the entire UK and no competitive election process means that any Politburo will always be a ‘team of rivals’ rather than a group of like-minded allies. When it comes to elite politics in the post-Mao CCP, stability trumps ideological purity.

Entering China is a key decision for businesses of all sizes. Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can provide you with the platform to unlock your potential.

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The Myth of Chinese Capitalism, by Dexter Roberts

St. Martin’s Press, March 2020

Roberts’ fascinating book paints the picture of a deeply imbalanced society, which is sometimes overlooked by foreign investors attracted by the huge appeal of half a billion middle-class consumers.

Through this detailed report, journalist Dexter Roberts shows how foreign investors often chose to ignore ordinary workers. Far from buying organic food, fast cars and fancy apartments, the lower social classes constitute around 60% of the population and earn an average of between £2 and £10 per day.

In ‘The Myth of Chinese Capitalism,’ Roberts vents their grievances. He follows the lives and hopes of workers and small entrepreneurs in poverty-stricken regions of Guizhou, and in the manufacturing heart of Guangdong Province: Dongguan.

China’s local administrative system (known as the hukou system) prohibits many workers from relocating freely within the country, and hinders social mobility, perpetuating inequality and raising workers’ dissatisfaction. Without social mobility, Roberts argues, the economic growth of the whole country is at risk.

This well-researched volume brings to life the problems migrant workers face in China today. Roberts lucidly highlights a conflict-ridden system that poses a severe challenge to the country’s forthcoming growth.

Tech Titans of China, by Rebecca A. Fannin,

Nicholas Brealey Publishing, September 2019

China’s strong entrepreneurial culture has been key to the country’s technological development in the past two decades. Its competitive spirit and inexhaustible work ethic have transformed it from a land that used to play catch-up with the US, to a country that is leapfrogging the West. In ‘Tech Titans of China,’ pioneering journalist Rebecca Fanning provides the reasons why, as one of her sources tells her, “China is going to eat Silicon Valley’s lunch.”

Fanning focuses on key players and companies in sectors extending from the sharing economy and e-commerce, to AI and social media platforms. She spent several months interviewing China’s top tech gurus – the equivalent of Steve Jobs, Jeff Bezos and Bill Gates. The book is the result of a well-conducted exploration of China’s tech ecosystem, where the author waded through tech incubators, accelerators, workshops and networking events. Fanning’s argument is that China’s disruption of the US’s leadership role in tech should prompt companies and businessmen in the US to counter it, and fast.

A must-read to understand China’s technological advancement, the book provides fundamental context on how its tech sector reached supremacy, without forgetting to cast an eye on what comes next.

In ‘Tech Titans of China,’ pioneering journalist Rebecca Fanning provides the reasons why, as one of her sources tells her, “China is going to eat Silicon Valley’s lunch.”

High-Speed Empire: Chinese Expansion and the Future of Southeast Asia, by Will Doig

Columbia Global Reports, May 2018

Travelling through China only a decade ago required ingenuity and patience, but in little more than a decade, China has built an extensive network of incredibly comfortable and convenient high-speed trains. According to Doig, Beijing’s infrastructure ambitions have helped it overcome its frontiers. And following the push of economic agreements of the Belt and Road Initiative, those ambitions continue to grow with projects such as the Pan-Asia Railway from Kunming, in China’s southwest, which spans across Singapore, Laos, Thailand and Malaysia.

Just as countries around the world welcomed the Belt and Road Initiative with caution, Southeast Asian countries are facing a dilemma. Their leaders “both yearn for and fear” Chinese investments. The choice is between allowing “the heavy hand of China” in – through Chinese investments – or defending their sovereignty.

Most of the evidence Doig provides is anecdotal – stories from interviews and experiences on his travels to the countries affected by China’s Belt and Road ambitions. These include the border town of Boten in Laos, which resembles an Asian Las Vegas; the revived Bandar Malaysia project, which is a contentious property development in Kuala Lumpur; and Singapore’s Forest City, a group of islands aimed at Chinese expat buyers. A quick, interesting read to get a deeper grasp of China’s “railroad diplomacy.”

China, Trade and Power: Why The West’s Economic Engagement Has Failed, by Stewart Paterson

London Publishing Partnership, October 2018

In his book ‘China, Trade and Power, Why the West’s Economic Engagement has Failed,’ Stewart Paterson argues that Western countries need to further put pressure on China to open up and engage in authentic political reforms rather than the “indulgent engagement attitude” that liberal economies have displayed so far when it comes to China.

Paterson considers China’s entry to the World Trade Organisation as the key turning point. By granting access to the WTO, he argues, the West hoped to trigger a political change in China. Not only did that not occur, but unfettered access to global markets also enabled China to gain a further advantage whilst playing by the rules of the liberal market.

Paterson sometimes overstates his case but it can’t be denied that China’s growth following access to the WTO has rapidly influenced the political economy in the West and rewritten the geopolitics not just of China but of the world.

The Third Revolution by Elizabeth C. Economy

Oxford University Press, May 3, 2018

If Paterson identifies China’s accession to the WTO as a defining moment, Elizabeth Economy treats the ascent to power of Xi Jinping as the key to interpreting China’s modern history.

The author details the transformative impact of Xi Jinping’s policy in China and abroad. She describes the ambitious and expansive moves President Xi is adopting overseas and the decisive approach he is implementing within the country’s borders. Underlining these traits of Xi Jinping’s policy, Economy provides an informative explanation of what she calls the “Third Revolution”.

China’s current strategy is reversing the trend towards an economic opening and an acquiescent foreign policy that had been put in motion by Deng Xiaoping’s “Second Revolution” 30 years ago.

The book spots the tensions, successes and shortcomings of President Xi’s first five years in office, and provides suggestions to Western countries on how to navigate their relationship with China in the years to come.

Economy’s study of change in the field of international policy adds a fresh insight and nuance to the encompassing narrative of China’s political transformation. Essential reading to understand where China is going in terms of domestic and international policy.

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In December 1978, China’s leader Deng Xiaoping, announced that China would start a period of ‘Reform and Opening Up’. This policy sees a de-collectivisation of agriculture, allows foreign investment into the country, and permits entrepreneurs to set up private businesses. By the early 1990s, certain policies and regulations were lifted and state-run businesses were privatised allowing the private sector to boom. The transformation was, as Lord Michael Heseltine says “on a scale without human precedence.”

Year on year, double-digit GDP growth was the norm for much of the 1990s and 2000s and over the last decade, the Chinese economy has tripled in size. Britain has benefitted from China’s growth over this time, with UK-China trade more than doubling from £32 billion in 2008 to £67 billion in 2017.

“The reform and opening up creates huge opportunities for China’s international trading partners and the UK benefits deeply from that,” said the UK’s Ambassador to China, Barbara Woodward.

“The UK economy is very strong in financial services, legal services, education, tourism services and so on. As China opens up in years ahead, that will really help UK-China trade and investment grow even further,” she said. “As the Chinese economy opens to the services sector it will obviously be beneficial to the UK but also for China because it will then be able to develop a more balanced economy and indeed a more cutting edge one.

“As China opens up or relaxes its restrictions on Intellectual Property development, R&D collaboration and demonstrates that it really can protect intellectual property then I think there is more scope for collaboration between UK and China in that area.”

During last month’s British Business Awards, organised by the British Chamber of Commerce in Beijing, a new award was established to celebrate the anniversary of China’s Opening Up.

The winner of the 40 Years of Reform Award was Rolls Royce. The engine maker has been operating in China since 1963 when it was making engines for China’s Vickers Viscount aircraft. Today, China has become the company’s second largest market making up 12 percent of its global revenue.

“Reform and opening-up has connected China to the world in an unimaginable way,” says Julian McCormack director of Rolls-Royce China.

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Since coming to power Xi Jinping has made it his mission to clamp down on official corruption. Xi pledged to crack down on both “tigers and flies” – everyone from senior officials to civil servants – and he has followed through on his promise. Since the end of 2012, over a million party officials have been disciplined. Some of those “tigers” included members at the most senior levels of government – Standing Committee member Zhou Yongkang and Politburo member Bo Xilai were two of the estimated 120 high-ranking officials to fall victim of the anti-corruption purges.

And the crackdown hasn’t just been limited to public officials. Significant numbers of executives from state-run companies as well as other private sector workers and business owners have also been accused of, or charged with, corruption and financial irregularities. In 2014, Xi further extended the anti-graft drive, by launching ‘Operation Foxhunt’, a global campaign to work with foreign governments to repatriate corrupt officials who had fled China to live abroad.

Last month saw the establishment of a new body to monitor potential corruption by “all public servants exercising public power”. The National Supervision Commission (NSC) will take over from the Communist Party’s Central Commission for Discipline Inspection (CCDI), which was previously in charge of anti-corruption. Now the NSC will sit above them and look for bribery, embezzlement or other corruption amongst any public workers rather than just more senior public officials. Teachers, doctors and other public sector workers will all now be open to prosecution, which could mean a prison sentence or even a death sentence in extreme cases.

“The number of people who believed corruption in Chinese corporations was widespread dropped eight points”

It was also reported by the Financial Times last month that the anti-corruption drive has spread to Hong Kong after staff at subsidiaries of a Mainland Chinese company in Hong Kong were required to handover “personal travel documents to the company or face unspecified punishments.” It is in breach of Hong Kong law for a company to force staff to hand over travel documents but this move has caused further concerns that the legal barriers between Hong Kong and Beijing are being eroded.

The new agency will supervise three times as many people as the older watchdogs and international organisations, including Amnesty International, have said that the NSC is a threat to the human rights of Chinese people. This in part is due to its scope but also because it has higher powers than the Supreme Court.

In an economy where public servants are often paid relatively low base salaries, there has been a long tradition of receiving ‘gifts’ in exchange for a favour – jumping the queue in a hospital or having extra tuition to improve grades in school. For many public sector workers, these ‘gifts’ will be removed but their salaries will not increase.

However, there is evidence that the anti-corruption drive may well be working. According to the “15th Global Fraud Survey” published by accounting firm EY last month, the number of respondents who believed corruption in Chinese corporations was widespread, dropped eight points to 16 per cent this year compared with the figure in 2014.

This is not evidence of an actual reduction of corruption but it does show that the perception of corruption within Chinese companies is reducing. For a long time, companies from China have struggled with an association of corruption. This news will certainly help go towards improving their image.

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