Editorial: The Legacy of China’s Parasitic Economic Model and the Impact of Xi Jinping’s Anti-Corruption Campaign
China’s economy appears to be slowing down after years of booming growth. To revitalize the economy, the current Chinese leadership needs to get its priorities right in one particular area.
General secretary Xi Jinping formally assumed the title of Chinese Communist Party “core” leader at the regime’s recently-held Sixth Plenum in Beijing. This ascension, as well as his declaration that he would “strictly govern the Party,” indicates that Xi’s three-year campaign to purge the regime of the political faction of Jiang Zemin, a former communist leader, has thus far been successful. Xi’s ascension also indicates that the next stage of clearing out the Jiang group will very likely pick up pace.
Xi’s investigation and punishment of thousands of corrupt officials in the Jiang network since he assumed power is a positive measure both for the stability of Chinese society, and for China’s economic development. These corrupt officials harm the state and damage public welfare—in particular, many took hundreds of millions in state funds, filling their houses with gold, cash, paintings, and antiques. As the scope of the anti-corruption campaign extends across borders, international banks also refuse to touch such money.
To improve China’s economy, Xi Jinping should capture more of these corrupt officials, disgorge their wealth, and use it to benefit the people.
Arresting more corrupt officials affiliated with Jiang Zemin is one of the keys to solving the many problems plaguing the Chinese economy.
China’s Economic Dilemma
A healthy economy is key to the stability of a country and a regime—it’s the basis of a prospering society, and allows people to live in safety and comfort. Without it, social unrest is the result, and the people can’t eke out a living.
China’s economy is presently facing a severe crisis: Economic growth has plummeted, unemployment is on the rise, the financial and real estate bubbles continue to grow, local debt is at a crisis level, manufacturing is in trouble, and capital is leaving the country.
This state of affairs results from multiple factors.
After the Cultural Revolution ended in the 1970s, the Communist Party was forced to push through economic reforms simply to survive. Without any change in the political system, the loosening of economic constraints allowed the Chinese people to create the “miracle economy” that drew the world’s attention. China eventually became the second-largest economy in the world.
But after 30 years of rapid economic growth, China’s economic model—which came at the price of trampling human rights, ruining the environment, excessively depleting natural resources—is exhausted. Continued economic growth has already become the Party’s last hope for sustaining the legitimacy of its rule.
Xi Jinping’s leadership group has faced numerous economic problems since coming to power at the 18th Party Congress in 2012, but not all of them are because of the system. Many, in fact, are due to power struggles at the top of the regime itself: thus, China’s financial and stock markets became battlegrounds for life-and-death political rivalries to play out on.
The group who found its power rapidly collapsing—Jiang Zemin and his faction—think nothing of using China’s economy as a bargaining chip. They’re content to cause a meltdown of the financial system, to unleash chaos if they need to, in an attempt to seize back power from Xi and avoid being held responsible for their crimes and punished. The stock market crash of June and July last year was a result of all this.
Jiang’s corrupt officials have themselves also directly dealt huge damage to the economy.
Jiang’s Corrupt Cronies
Officialdom in China has reached the point encapsulated by the phrase: “There’s not an official who’s not corrupt” (无官不贪). Almost every single official in Jiang Zemin’s camp is extremely corrupt—this has become clear in the records of those investigated, exposed, and punished since the 18th Party Congress.
Recently the former National People’s Congress top official Bai Enpai was charged with accepting bribes to the order of $36 million; the former vice bureau chief of the department of coal in the National Energy Administration, Wei Pengyuan, took nearly $30 million in bribes and was given a death sentence with reprieve (with the result that he’ll spend the rest of his life behind bars); the former chair of Guangdong Province’s Party advisory congress, Zhu Mingguo, was charged with receipt of $20 million; Zhou Yongkang with $19 million; Jin Daoming with $17 million; Wan Qingliang with $16 million; Mao Xiaobing with $15 million, and on.
Keep in mind that these are only the numbers that appear in official reports. The real sums are almost certainly far higher. If $17 million in paper cash can be hauled out of the home of Ma Chaoqun, a mere section-level official in Hebei Province, then higher-officials absconding with hundreds of billions of yuan is to be expected.
Jiang’s Corrupt System
After Jiang Zemin took power, the Communist Party entered an era lacking both an ideology or a limit to its conduct. Instead, Jiang established in the Party a new set of power relations: Let loose corruption, and join the conspiracy of power and profit.
The first crop of officials that came up under Jiang—like Li Changchun, Jia Qinglin, Chen Liangyu, Zeng Qinghong, Zhou Yongkang, and others—almost to a man had their start in smuggling, colluding with businessmen, and expropriating land in making their first fortune.
Before long, both petty and powerful officials who liked to use their public position for personal gain began gathering under Jiang’s banner. During the Jiang era, corruption became the way to get ahead, and clean officials were the ones to be cleaned out.
The case of Huang Jinguo, the head of the Party Committee of Lianjiang County in Fujian Province, is an example.
Beginning in the late 1990s, Huang sought to investigate a major network of corruption in his own jurisdiction. He was simultaneously pressured from the top and the bottom: Higher-ups told him to lay off, while thugs and triads issued threats. Huang wore a bulletproof vest to work for six years. Helpless, on Aug. 11, 2004, he submitted his story to People’s Daily, calling it: “Why A Bulletproof Vest Has Followed me For Six Years.” In the end, Huang was arrested a year later and sentenced to life imprisonment on framed-up charges.
Jiang Zemin ruled the country through corruption, setting up his own network of officials throughout the Party, political security, military, and other bureaucratic systems. His eldest son, Jiang Mianheng, became known as “China’s most corrupt.”
The culture of corruption in China that Jiang established metastasized through the military, the judiciary, the health care system, the education system, the sports system, the media, state-owned enterprises, and more. Official positions were bought and sold, bribes were paid and received, collusive abuse between officials and businessmen spread through the country.
The lifeline of the Chinese economy was in the hands of interest groups that had coalesced around Jiang’s rule, including the petrochemical industry, telecommunications, the state-owned railway empire, the financial system, and state enterprises in fields like finance that offer the fattest rents. All these fields had installed in them either members of the extended Jiang family and clan, or confidants, aids, subordinates, and associates. These include Jiang Mianheng, Zeng Qinghong, Zhou Yongkang, Xu Caihou, Liu Yunshan, and others.
Zhou Yongkang and his family accumulated real estate and cash to the tune of over $14 billion, while Zeng Qinghong’s wealth exceeded $1.4 billion. The families of Xu Caihou and Liu Yunshan also hold wealth in excess of a billion dollars.
In recent years the phenomenon of “naked officials” has become extreme. “Naked official” is a term that describes corrupt officials who first send their spouse and children abroad with the stolen assets while they bide their time for the best opportunity to make their own escape. These officials often get their money out through cash smuggling, underground money shops, or large-scale investment projects. Official statistics indicate that at least 20,000 officials have fled China in this manner, depriving the country of between $116 billion and $217 billion.
If the entire asset base of the corrupt network that grew around Jiang Zemin’s reign could be calculated completely, it’s likely that it would exceed China’s annual expenditures in national defense, healthcare, and education.
How Jiang Harmed China
The system of official theft and corruption created by Jiang came about at a time when China was going through large-scale privatization and economic transformation. Thus, the entire backdrop of economic reform turned into the best opportunity, excuse, and method of concealment for theft with abandon. State assets were, through all manner of mechanisms, privatized into the control of corrupt officials and special interest groups.
In the end, this widespread theft meant that China lost the opportunity to turn into something resembling a normal country via the reform process, and the economic and social foundations that enable order were undermined. A large part of the fruits of 20 years of economic reform in China was plundered by Jiang’s corrupt interest groups.
The corruption during this period wasn’t limited to officialdom—the culture of lawlessness penetrated every level of society. As the moral turpitude of the ruling class became clear, any notion of fairness became increasingly remote for most Chinese people.
Economics and morality are interdependent. Methods of economic development that arise from a broken moral outlook will inevitably result in embezzlement, corruption, plunder, an every-man-for-himself mentality, and the ruination of the public good.
The uniquely nasty aspect of Jiang Zemin’s rule is the extent to which he dared to destroy and degrade human morality and conscience, which is the foundation of any society and well-functioning economic and political system.
Without humanity, morality, and good faith, society collapses and decays—challenging and attacking morality as Jiang did was an attempt to destroy hope for a new China. It also amounts to the Communist Party digging its own grave. This much is clear from an examination of the fallen officials in Jiang’s network.
Taking an inventory of these officials—including Bo Xilai, Zhou Yongkang, Su Rong, Xu Caihou, Guo Boxiong, and others—they were, to a man, committed to Jiang Zemin’s persecution of the Falun Gong spiritual practice.
Cleaning out the Jiang Faction Will Help Revitalize the Economy
Thoroughly purging officials that stole vast wealth during the Jiang era will have the effect of reinvigorating the Chinese economy.
Firstly, given the scale of wealth that they stole, their confiscation and reinvestment in the livelihood of the people is bound to improve things.
Secondly, purging all those officials will have the effect of restoring proper economic order and the trust of the people in the future of China.
Thirdly, breaking the corrupt official network established by Jiang, and rebuilding a normally-operating system of governance, would allow China to return to a positive growth trajectory and move toward the future smoothly.
Fourthly, these corrupt officials are the foundation of Jiang Zemin’s faction. So clearing them out, before ultimately arresting Jiang Zemin, would mean the complete end of the Jiang faction.
From a deeper perspective, one of the objectives Jiang had when fostering this enormous system of corruption, was in order to bind officials throughout the Party to his campaign of persecuting Falun Gong—making them both beneficiaries from the campaign and participants in it. This is one of the most sinister aspects of his rule.
History has shown that the persecution of righteous faith is met with the punishment of Heaven. The collapse of the Roman Empire illustrates this.
China today is paying the price of Jiang’s persecution of Falun Gong. However, there’s hope for China’s future if the persecution is ended, the victimized are exonerated, and justice is re-established. Purging Jiang’s system of corruption is a way to uphold righteousness, manifest Heaven’s principles, and bring boundless blessings.
Premodern Chinese history tells us that a change of dynasty is at hand when a large number of officials in a regime are corrupt, and when the economy and the country’s power is on the wane. Jiang and the Communist Party have forfeited the last vestige of legitimacy of the Party, and the Party is about to overthrow itself.
Meanwhile, the range of measures and actions that Xi Jinping has taken since coming to office suggests that he doesn’t have the blood of the persecution of Falun Gong on his hands. Xi is also distancing himself from the Party’s historical crimes.
Xi thus has no need to bear the blood debt of the Party and Jiang Zemin, and his abandoning the Party is an inevitability that accords with the will of history.
China will then make a peaceful transition to a non-communist society, and the Chinese nation and people, who have suffered decades of calamity, will create new glories in the future.