China targets 'naked officials' in anti-graft war

China's anti-graft campaign has begun to target two types of offenders: "naked officials" who have moved their families and often ill-gotten assets overseas, and corrupt officials working at state-owned enterprises (SOEs).

But the detention or demotion of a growing number of officials has also triggered the airing of concerns over the graft-busting drive and whether it is hurting the leadership's reforms to scale back the state's role in the markets.

Signs that "naked officials" - or luo guan in Mandarin - are being targeted could be seen in the way that Dongguan city in southern Guangdong redeployed 127 of them presumably to less important roles last month.

Late last month, southern Guangzhou's deputy party chief Fang Xuan also chose to step down even though he was just months shy of the official retirement age of 60.

The reason for his move was reportedly an internal order in February from the Chinese Communist Party's Central Organisation Department to "naked officials" to "bring back your family, or retire early".

"Naked officials" have long been a problem for China. Up to 18,000 are believed to have fled the country between the mid-1990s and 2008 with more than 800 billion yuan in stolen assets, based on a 2011 estimate by the People's Bank of China.

Public pressure against such officials remains high. A recent straw poll of some 1,000 Chinese showed that 75 per cent believe luo guan should not be in high positions and 49 per cent believe these officials tend to be corrupt.

As for SOE officials, some 31 from wide-ranging sectors such as energy, telecommunications and property have been detained for disciplinary reasons this year, according to media reports. The toll has already matched the 31 nabbed during the whole of last year.

The highest-profile casualties include China Resources chairman Song Lin and China Travel Service (HK) chairman Wang Shuaiting.

For SOE officials, the detention threat comes on top of seeing hitherto luxury lifestyles being curtailed under President Xi Jinping's austerity campaign.

Observers say the anti-corruption crackdown in the state sector is prompted by China's desire to cut the state role and boost that of the private sector in the economy.

But some observers say the detentions could be counter-productive. Some SOEs have postponed their market reform policies to cope with the investigations and loss of key personnel. A debate is also growing over whether "naked officials" are unfair victims of the anti-graft drive which has boosted Mr Xi's popularity after his promise to target "tigers and flies", referring to both senior and low-ranking officials.

Chongqing Times columnist Shan Shibing wrote on May 27 that the lack of transparency in handling suspected "naked officials" has unfairly portrayed them as corrupt.

"Do not equate all luo guan as bad people and not treat them as human beings," he added.

Anti-corruption expert Xiao Bin of the Sun Yat-sen University in Guangzhou told The Straits Times that it is normal for concerns to surface, given how tricky and difficult anti-graft work is.

But he believes they should not be used as reasons to stop or slow down the anti-corruption work, particularly because it is still stuck at the "campaign-style" level and has yet to attain the ultimate goal of structural reform.

For instance, Prof Xiao said the way to tackle the "naked officials" problem is to introduce a policy to identify the officials early and deny them plum roles in their career. He said: "Similarly, while we should explore how to prevent corruption investigations from hurting market reforms, the discussion could move in tandem with disciplinary work among the SOEs which should not stop."

Anti-corruption expert Li Yongzhong said a good anti-corruption campaign needs to apply the right amount of pressure and the best way to do so is through deep structural reforms. He cited reforms such as diluting the appointment of officials and expanding the practice of hiring from the market.

Using a pressure cooker analogy, he said: "If the fire is not controlled well - either because of insufficient or too early reduction of pressure - the cooker may produce half-cooked food. But if the pressure is not lowered in time, it could cause the cooker to explode."

kianbeng@sph.com.sg

This article was first published on June 05, 2014.
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