Anti-Corruption Campaign

China's Internal Cleanup

  • Why it matters

    Why it matters

    International firms in China can suffer considerable fallout because of the campaign, especially because of mandatory joint venture policies.

  • Facts

    Facts

    • China’s President Xi Jinping has called corruption “a cancer growth, which is eating away at the party from inside.”
    • In some industries, foreign companies must join forces with Chinese companies in order to access the Chinese market, otherwise known as mandatory joint ventures.
    • The disciplinary commission is a kind of “party police force,” which can lock up and interrogate suspects of corruption for months on end.
  • Audio

    Audio

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China’s Politburo Standing Committee member Wang Qishan stands next to a Chinese flag in Beijing
Politburo Standing Committee member Wang Qishan, the head of China's anti-corruption watchdog, stands next to a Chinese flag in Beijing. Source: Jason Lee / REUTERS

It happened suddenly. Six men pushed into a small conference room while the Chinese entrepreneur was in the middle of a presentation to German guests. The gentlemen briefly introduced themselves as investigators from the Chinese disciplinary commission, the most powerful authority in the national fight against internal corruption. They said the entrepreneur would have to go with them, and led him out of the room.

The German visitors were shocked. They had been cooperating closely with their Chinese business partner for years.  And now their supplier was caught in the middle of an anti-corruption investigation. “The issue is too sensitive. Under no circumstances should you write where the raid took place,” said one German entrepreneur on the condition of anonymity.

It has been unclear for months where things will go from here. Investigators are examining documents taken from the Chinese company, and several managers have been taken away for questioning.  For the time being, cooperation with German partners is on hold. And it is not even clear yet if the Chinese management has done anything wrong at all.

Scenes like this have been a regular occurrence in China for more than three years. Campaigns against rampant corruption come and go in the People’s Republic.  But nobody has pursued matters so thoroughly and comprehensively as state and party leader Xi Jinping. For the Chinese president, corruption is “a cancer growth, which is eating away at the party from inside.” Decadence and personal enrichment had weakened the prestige of the Chinese leadership,he felt. And for that reason, Mr. Xi decreed a “thorough cleansing” of the apparatus.

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