New Shanghai Anti-Corruption Regulation Sends a Message

By Jenny Li
Jenny Li
Jenny Li
May 7, 2015 Updated: May 8, 2015

On May 4 Shanghai issued a new regulation barring the family members of leading Communist Party officials from doing business in the city. Commentators say this regulation is targeting former Party head Jiang Zemin and his faction.

Throughout China, the families of Communist Party officials trade on their relative’s clout to gain advantageous business relationships. The new Shanghai regulation targets this source of corruption by placing restrictions on the families of top officials in municipal government. It prohibits family members owning or serving in senior positions in various types of businesses, including foreign-owned businesses, and investing in companies doing business in Shanghai.

An official in violation of the new regulation has the options of having his spouses, children, and children’s spouses voluntarily withdraw from the business or resigning from his current post.

Freelance writer Zhu Xinxin pointed out that in only restricting officials’ families from doing business in Shanghai, the regulation leaves open an avenue for corruption.

“Local officials’ spouses cannot do business locally, but spouses and children from other cities are allowed,” Zhu said. “The officials can actually collaborate and exchange power to have their spouses and children do business where it is allowed.”

Professor of economics at Beijing Institute of Technology Hu Xingdou told Deutsche Welle that a similar regulation was issued as early as in the 1980s, but the restriction in Party officials’ spouse and children in conducting business was never implemented.

Professor Hu Xingdou believes that Shanghai’s provision will only temporarily relieve corruption in Shanghai, and the most fundamental solution is to “put the power into a cage.”

Zhu believes that the one-party dictatorship is the cause of corruption and the regime is the problem.

“It is all about image, and ultimately it’s a power struggle,” Zhu said. “To completely curb corruption, power must be restricted. The supervision rights must be returned to the people, the media and the independent judiciary so that eliminating corruption will go forward.”

Commentator Xia Xiaoqiang said the issuing of the new regulation is related to the power struggle in Zhongnanhai, the Party’s headquarters, between current Party head Xi Jinping and Jiang Zemin.

It is all about image, and ultimately it’s a power struggle.
— Zhu Xinxin

Xia Xiaoqiang said the restriction on the family members of officials spouse not engaging in business operations should have been implemented nationwide. The initiative being taken in Shanghai has clearly been done with a target. Jiang Zemin’s powerbase was Shanghai. In 1989 he was promoted from being Shanghai Party head to general secretary of the Communist Party.

Ding Xueliang, a sociology professor at Hong Kong University of Science and Technology told BBC’s Chinese network that it is a known fact that Shanghai has been a stronghold of Jiang Zemin and Jiang’s right-hand man, the former Politburo Standing Committee member Zeng Qinghong.

Many of the high-ranking officials sacked in the last two years are people connected to Jiang and Zeng. Ding Xueliang believes that by issuing this regulation the administration of current Party head Xi Jinping takes a significant political stance toward Shanghai. Shanghai will abide by the policies and movements of Xi and his anti-corruption chief, Wang Qishan, against corruption. 

Jenny Li