Zhou Yongkang: Fall of Zhou, one of the top guns facing corroption charges, was a clear indication that the president meant business.
CHINA was notorious for its corrupt officials. But since 2012, when President Xi Jinping embarked on an anti-graft campaign to eradicate the country of corrupt leaders, the results have been gratifying.
Its image has improved as senior party officials to low ranking staff were nabbed.
The details of the ill-gotten gains have been fodder for the media and those caught have received little sympathy from members of the public. The tale of how their family members enjoyed luxuries far beyond what the normal people in China can imagine made them made them being frowned upon.
Among the top guns who fell are Zhou Yongkang, a former member of the powerful Politburo Standing Committee (PSC) of the Communist Party of China.
The committee of top leadership of the Communist Party of China comprises between five and nine members. The PSC decides on issues ranging from the economy to political and social matters.
So the fall of Zhou was a clear indication that the president meant business.
The drive against corruption – carried out by the anti-corruption body called Central Commission for Discipline Inspection (CCDI) – had also implicated another former member of the PSC, Gen Xu Caihou. The charges against Xu were dropped after he died in March this year.
Apart from the top names and thousands of officials at other levels who were arrested, hundreds of thousands of state government staff were subjected to vigorous questioning to the extent that they are unlikely to embark on corrupt practices again.
The critics of President Xi felt that his drive towards eliminating corruption and not protecting even high-ranking party officials as his way of dealing with his political enemies.
But for the people, it is a sign that the government is serious about tackling corruption. It is a sure sign to show that corrupt government officials cannot be allowed to walk away with the ill-gotten gains and their families enjoy the luxuries while the normal people continue to only watch in awe.
The results are beginning to show – both the intangible and tangible benefits of this drive to eliminate corruption.
First we go to the tangible benefit. For all its work since 2012, it has been reported that the CCDI has confiscated some 38.7 billion yuan (RM23.8bil) in the form of land, cash, gifts and also fines.
The fines were generally for unpaid taxes and disposal of state assets at prices below market value. The intangible benefits are that China continues to endear to the world bodies such as the International Monetary Fund (IMF) as a world economic power.
The latest dose of endorsement came from the IMF that found no fault in China’s intervention in the stock market the last few weeks.
It said the intervention measures, criticised by some fund managers, would not hamper the march of the yuan to be admitted as one of the currencies that make up the world body’s Special Drawing Rights (SDRs).
The SDR, which is the currency unit of the IMF, allows the fund to draw upon the money for its members in times of crisis.
A decision is due in January. But the bigger impact arising out of the yuan being part of IMF’s basket of currencies that make up the SDR is that it gives China the recognition it seeks as being a global economic force. The yuan will join the ranks of the US dollar, euro, yen and pound sterling as being part of IMF’s SDR.
It will enhance investments and increase the demand for yuan-denominated assets. So, in some ways, the yuan would find some strength and value in the international currency market.
Until last week, the critics were sniping away at the intervention measures taken by China’s authorities to prevent the slide of the stock exchanges in the country where the estimated loss in wealth between June and early July is about US$3 trillion (repeat US$3 trillion).
The Chinese authorities embarked on various measures such as providing funding up to US$200bil to help brokerages with margin financing, banning short-selling, preventing major shareholders from disposing of their stakes and reducing interest rates and the level of statutory reserves held by banks.
The moves were undertaken to prop up the stock markets.
But the IMF felt that the measures taken allowed for an orderly decline of the stock market and was what the central decision making authorities should be doing.
Also, IMF chief Christine Lagarde pointed out that although the Shanghai exchange was down by 20% due to the sell-off, it was still 80% higher compared to a year ago.
The endorsement comes because reforms are seen as a whole suite of measures being undertaken by the government and the president himself.
Two years ago, nobody would have thought that Xi’s drive towards eradicating corruption was one that could be taken seriously. But today it is something that is bearing results only because the initiatives have come from the very top.
There are casualties. The families of those caught have been left suffering because all the assets are seized and the public official losses his or her pension.
In some cases the officials concerned commit suicide because there would not be a case and allow the family to hold on to the assets and carry on with their lives.
But that is the price to pay to eradicate corruption.
All countries talk about elimination of corruption.
But the move must come from the very top for it to be effective and the country to prosper and gain the respect of the world.
Today one of the reasons why the Singapore currency is even stronger than the Australian dollar is because of its persistent drive to stamp out corruption and maintain high standards of governance.
While the currency in the tiny republic has gained strength significantly, the currency of its neighbours in the region have depreciated when compared to the US dollar with Malaysia leading the pack.
- The views expressed are entirely the writer's own.
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