Although China's economy has rapidly expanded since 1979, the People's Liberation Army was originally hampered by a lack of funding for troops, training, weaponry and modernization. To make up for this shortfall, the army was encouraged to venture into industry, with the hope of becoming self-financing as the economy continued to develop. During the 1980s and 1990s, military-oriented business rapidly expanded, generating revenues estimated at around 2 percent of the country's gross domestic product. This created openings for widespread graft and profiteering, conducted under the purview of military officials.
The military simultaneously saw rising autonomy relative to civilian control. It wasn't until 1998 that President Jiang Zemin prohibited the army from engaging directly in business. Despite attempts at reform, the presence of large-scale networks of corruption and patronage persisted. The severity of the problem revealed deep concerns about the corrosive effects of fraud on the combat effectiveness and morale of the People's Liberation Army.
Under President Xi Jinping's administration, corruption has been identified as the greatest threat to Chinese institutions, with serious repercussions for the credibility of both military and civilian leadership. Unlike the prominent anti-corruption campaign against civilian officials, high-ranking military personnel have been largely immune to corruption probes, at least publicly. The sensitivity and complexity of the party-military relationship has hindered Beijing's intentions to rein in military corruption, yet factionalism and self-interest has grown to the point that it could supersede state interests. The Party has identified the need to bolster professionalism within military ranks while reasserting civilian control. It helps that President Xi's ties to the military put him in a slightly better position to reform the military than his two predecessors.
Although the Chinese military has sought to accelerate its program of expansion and modernization over the past decade, it has also been subject to so-called austerity measures, intended to restrict perks such as luxury or imported cars and expensive gifts. Such measures were limited in scope and ambition. Until recently, they were the only steps the current administration had taken to curb military corruption. With the arrest of Gu, it appears that the Party is targeting leaders. Gu's position gave him access to a range of assets throughout the military's supply chain. He stands accused of using these assets for personal profit. The investigation into Gu began in January 2012, but few details were made public until now.
The purge will not stop with Gu. The Chinese government will likely be moving on to bigger military figures, namely Xu Caihou and Guo Boxiong, both former vice chairmen of the Central Military Commission — one step beneath former Chinese president and military chairman Hu Jintao. Xu and Guo allegedly sheltered Gu, making them suspects in the developing investigation. Already Party investigators are reported to have taken Xu for interrogation, removing him from his hospital bed (he is terminally ill). The prosecution of Gu has raised expectations that Xi is honoring his promise to subject the military to this kind of scrutiny.
The Politics of an Anti-Corruption Campaign
Anti-corruption, or "party rectification," campaigns are a standard part of China's modern political history. Today, as in the past, the campaign reflects the Party leadership's desire to consolidate its control, clean up its reputation for corruption and remove resistance to upcoming policy initiatives and reforms. It is important to recognize that many of the most high-profile officials taken down in the recent campaign were targeted before Xi took power — not only Gu, but also Liu Zhijun, whose arrest paved the way for the overhaul of the outdated railway sector. There was also Bo Xilai, whose 2012 dismissal marked the most dramatic example of intra-party competition in the lead-up to the 2012-13 power transition. The outgoing Hu administration and the incoming Xi administration orchestrated these moves against players that were deemed excessively corrupt or powerful.
However, once in power Xi and Wang Qishan, the ambitious leader of the Central Commission on Discipline and Inspection, continued to pursue an aggressive anti-corruption campaign in the party and state bureaucracy, an effort that has surprised domestic and international viewers. At the grassroots level, a wave of localized accusations and arrests shows the eagerness of the Party to demonstrate their own clean conduct and their loyalty to Xi. At the upper echelons of power, Xi has already launched an extensive probe into Zhou Yongkang, a former Politburo Standing Committee member in charge of the country's security apparatus, whose former post would have given him immunity in previous administrations. This probe has widened to tackle the notorious group that controlled China's oil sector monopoly, with former China National Petroleum Corp. chairman Jiang Jiemin, senior CNPC officials and others with connections to the company, having been arrested and dismissed. By going after the CNPC, the new administration has paved the way for reforms in the energy sector as a whole. It has used the same method with railways, among other sectors.
A Roadmap to Fight Corruption
Chinese and global news agencies shed light on a number of recent corruption cases. Looking at a sample of 136 relatively prominent cases of officials investigated by the country's various disciplinary organs since late 2012, some tentative conclusions can be drawn, despite a lack detailed information. Moreover, this sample is a fraction of the total number of officials who have been investigated or prosecuted over the past year and a half — the Supreme People's Procuratorate recorded 36,907 officials who were investigated from January through November 2013. From 2007-2012, some 600,000 members of the Communist Party were punished, according to the Central Commission for Discipline Inspection, including 60 high-ranking ministerial and provincial leaders.
Nevertheless, a few rough trends can be discerned. While data suggests that anti-corruption campaigns from 1998-2007 focused primarily in China's northern and northeastern provinces, Xi's campaign has more heavily targeted the south and southwest. Thus, where Tianjin, Heilongjiang, Jilin and Liaoning were once the targets of corruption investigations, the focus has now shifted to Guangdong, Sichuan, Shanghai and Zhejiang. (There are a couple of notable exceptions to this geographic division: Beijing has attracted more scrutiny under Xi, while Shanxi and Shaanxi have been consistently targeted.)
The party has always struggled to exert its authority over distant provinces with strong regionalist identifications, places such as Shanghai, Guangdong and Yunnan. But recently, China has cracked down especially hard on political forces in the Sichuan Basin, a traditional refuge for political forces that deviate from Beijing. Most recently, Sichuan was the power base for Bo Xilai, and for many of Zhou Yongkang's affiliates in the China National Petroleum Corporation.
Guangdong has received the most scrutiny in the latest campaign. China's southernmost province is far away from Beijing, and in the past, powerful politicians have successfully fended off attacks from the central government. The level of anti-corruption scrutiny may be a result of the province's long-standing disparate tendencies, as well as rapid growth that has opened up opportunities for corruption. It also may reflect and reinforce Beijing's broader policy of reorienting China's economy, from the heavy industry of the northeastern regions to the light manufacturing prevalent along the coast, and now moving beyond light manufacturing and developing the connectivity between the interior and the outlying regions. The Chinese government wants to closely monitor regions where local resistance may undermine Beijing's goals during a time of sweeping change.
The anti-corruption campaign has mostly targeted officials in the state bureaucracy, followed by state-owned enterprises and Party organs. At the central, provincial and local levels, bureaucrats working in government leadership positions, ministerial positions and deputy ministerial positions have been the hardest hit. Corruption probes have affected a broad range of ministries and departments, but the most affected by far in this sample has been the Public Security Ministry.
Of the officials targeted in the Communist Party, a handful have been involved in provincial and local politburos, while others were in the provincial consultative congresses (legislative advisers) or served in people's congresses (local legislatures). Among the state-owned enterprises that have lost employees to corruption probes, the sectors that stand out are energy, railways, finance, property and telecommunications. Last year also saw Beijing strike against foreign pharmaceutical companies.
The most frequent reason for prosecution is abuse of power, in which officials sell public assets and amass personal fortunes, especially by means of the property sector. Sex scandals and various forms of bribery or other abuses of power — such as profiteering on land taken from peasants — are common as well. The main outlines of the anti-corruption campaign reflect the scandals surrounding Liu Zhijun and the railways sector, Bo Xilai and his network, and Zhou Yongkang in the energy sector and public security apparatus. Other prominent scandals include the Three Gorges Dam and the 2011 Wukan riots.
If Gu Junshan's prosecution is any indication of the Xi administration's priorities — and if the rumors about Xu Caihou and Guo Boxiong prove true — Xi may shift more attention to the military in the coming months and years. The administration has already clearly indicated that it intends to make sweeping structural reforms to the military, particularly in order to redesign and strengthen the country's regional command structures, a process barely underway. Any move to eradicate corrupt elements of the People's Liberation Army will require strong support from the upper echelons of the military. Xi's prior connection to the armed forces will strengthen his campaign for reform, but the central government will still have to tread carefully. If senior military officials are targeted, they must be targeted in such a way that will not damage the reputation of the overall military, along with the critical relationship between the Party and its army.