Who said “The Chinese Communist Party is like the Mafia”?

Who said the CCP is like the Mafia:

  1. Tsai Ing-wen, President of Taiwan
  2. Fumio Kishida, Prime Minister of Japan
  3. Lloyd Austin, US Secretary of Defense
  4. Tony “Big Tuna” Accardo, Mafia boss
  5. None of the above

In a way, I wish the answer was #4, the now deceased Tony “Big Tuna” Accardo (Al Capone’s successor in Chicago), but it wasn’t.  # 1- 3 are more reasonable guesses, and for all I know one of them has actually said something like this.  But the answer I was looking for was #5 “none of the above,” because my quote came from a Chinese dissident with a lifetime of experience as a CCP insider:  Cai Xia. 

Cai was born into a “red family” with impeccable credentials:  her grandfather was an early Party member and her parents fought in China’s Communist Revolution.  Cai holds a PhD in Chinese Communist Theory, and worked for 15 years as a professor at the Central Party School in Beijing, where high ranking CCP cadres are trained.  At the beginning of her career, she was so orthodox that classmates nicknamed her “Old Mrs. Marx.”   But as her thinking evolved, Cai started getting into trouble for criticizing the Party. 

She left her faculty position in 2012, but continued to publish and speak, almost as if she was testing how far she could go.  She found out how far in 2016, when she gave a speech in which she likened Xi Jinping to a “mafia boss” and called the Party a “political zombie.”  From that point forward, she wrote in an article in Foreign Affairs, “the CCP blocked me from all media in China—print, online, television. Even my name could not be published.”  In 2019, while Cai was traveling on a tourist visa in the US, a friend told her that if she returned to China, she would be arrested.  Cai decided to stay and now lives in exile in the US. 

In an article in the current issue of Foreign Affairs, Cai spelled out the details of the Mafia analogy with Xi Jinping as the Don, the six members of the CCP Standing Committee as underbosses and consiglieres, and the remaining 18 members of CCP’s Politburo as capos who try to stay in Xi’s good graces by executing his orders.  As a reward “they are allowed to enrich themselves as they see fit, seizing property and businesses without penalty. And like the mafia, the party uses blunt tools to get what it wants: bribery, extortion, even violence.”

Marlon Brando portrayed Mafia boss Don Corleone in the 1972 Oscar best picture “The Godfather.”

Cultural differences between the US and China have added to misunderstandings between the two countries.  According to Cai “Americans are too naive… One basic cultural tradition of Americans is not to lie, to obey the rules, and to respect the spirit of contracts. In Chinese culture deception is in our blood. There is no spirit of the contract, no sense of fairness, and people often say different words to mean the same things under different circumstances. Something said today can change tomorrow.”

Well, I’m glad she said it.  In my posts on cultural differences between China and the US, I talked about “the relativity of truth,” but if I had written anything quite this direct I might have been sued by an anti-Asian alliance. 

Cai also highlighted another of the seven cultural differences I mentioned in my posts – “relationships as the key to success” – when she wrote “When it comes to one’s rise within the party hierarchy, individual relationships, including one’s family reputation and Communist pedigree, matter as much as competence and ideology.”

She sees President Xi Jinping as one example of the rise of a “princeling” (a descendant of an influential family) that has “failed upward.”  “Over the course of his tenure,” she wrote elsewhere, “the regime has degenerated… into a political oligarchy bent on holding on to power through brutality and ruthlessness… People who haven’t lived in mainland China for the past eight years can hardly understand how brutal the regime has become.”

All of his policies ultimately come back to holding on to power in Cai’s view.  When I wrote a post about Xi’s anti-corruption campaign, I quoted Professor Kerry Brown that Xi’s campaign “has really drawn blood.”  Perhaps I should have put more emphasis on whose blood exactly.  According to Cai, “since corruption was endemic in China, with nearly every official a potential target, Xi was able to use the campaign as a political purge.”  She proceeded in the same article to quote how Xi targeted rivals while “those who helped Xi rise have been left untouched.”  For example, while “there is reason to believe that… [Xi ally] Jia Qinglin… and his family are exceedingly corrupt—the Panama Papers, the trove of leaked documents from a law firm, revealed that his granddaughter and son-in-law own several secret offshore companies—they have not been caught up in Xi’s anticorruption campaign.”

One of the most important implications of Cai’s look behind the curtain is to remind us that the CCP is not monolithic, and that some Party members and elites strongly disagree with Xi Jinping’s policies.    Based on “more than 30 years of contact with middle and high level CCP officials,” Cai wrote in a Hoover Institution white paper (p. 25), “I can say that at least 60-70 percent of the CCP’s high level officials understand… that only a democratic constitutional government can ensure long-term stability in China and protect human rights, personal dignity, and personal safety.” 

Wait a minute.  60-70% of senior CCP officials want democracy?  Can that be true?  Why don’t they do something about it?  Cai’s answer:  “There is little chance for any form of opposition to organize under Xi’s heavy handed rule.”

Her advice to US policy makers is dark.  The CCP’s goal she believes is “to replace the free and democratic system of modern mankind represented by the United States, and the values and order of peace, democracy, freedom and justice,” with its own model of governance.  If that’s not bad enough, she has also argued that “relations with China are destined to be defined by standoff and confrontation in large part because the Chinese Communist Party is by nature totalitarian, belligerent, unpredictable, and unwilling to follow the norms of a democratic rules-based order.”

Given that Cai was basically thrown out of her home, in the country she loved, it may be wise to take what she says with a grain of salt.  If I were thrown out of the US as a result of my politics, I’d certainly hold more than a few grudges.  But it is also worth noting that her claims have an unusual credibility given that Cai is the highest ranking Chinese insider to provide insights into the hidden world of CCP politics.

In Cai’s view, if Xi were to have a fatal heart attack tomorrow, the nature of the US-China rivalry might change for the better.  But that’s probably not going to happen soon. 

What is likely to happen when the 20th Party Congress meets in Beijing October 16 is that Xi will be elected to an unprecedented third five year term as General Secretary of the People’s Republic of China.  He is 69 now so he will be 74 if his third term ends on schedule in 2027.  He could then be elected for additional terms and even become president for life. 

There’s hope for US-China relations in a post-Xi world. But in the meantime, with an adversary like Xi on the other side of the negotiating table, the US needs a very clear understanding of China’s goals and methods.  And we will also need to be prepared for a wide variety of surprises and unpredictable events.   

13.5 tons of hidden gold: Can Xi stop corruption?

There is an old saying in China that “If the Communist Party executed every official for corruption, it would overdo it a little.  But if the Party executed every other official, it could not go wrong.” 

In 2012, two days after assuming office as the most powerful person in China, Xi Jinping gave a speech warning that corruption could “doom the party and state.”  Soon after, he announced a systematic campaign to crack down on both “tigers” (senior party officials) and “flies” (mid and lower level civil servants).

In the eight years since, according to Professor Kerry Brown, Xi’s anti-corruption campaign “has really drawn blood, in ways that no other kind of campaign like this has ever done.”

The most dramatic example to date was a provincial official who might be classified as a “fly.”   Zhang Qi was a member of the Standing Committee of Hainan, China’s smallest province with a population of about 9 million.  When investigators searched his home, they found a hidden room in his basement where he had stored 13.5 tons of gold.  Based on the current price of gold (roughly $1,700 per ounce), those gold bars would be worth about $734 million.  But wait, that’s just the flashy part of his portfolio.  Zhang also had 268 billion yuan (about $37.5 billion) in various banks, for a total of $38 billion.

Before he was arrested, Zhang Qi may have been the richest man in China, depending on the day’s price of gold, and his other assets.  The top two Chinese billionaires in Forbes magazine’s 2020 list were Jack Ma, cofounder of ecommerce giant Ali Baba at $38.8 billion, and Ma Huateng (aka Pony Ma) cofounder of Tencent, another ecommerce behemoth, at $38.1 billion.  Zhang Qi did not make the list.

Zhang Qi and some of the gold hidden in his basement

The sheer size of Zhang’s fortune was nearly unbelievable.  It was equal to more than half of the $74 billion annual GDP of his province.  He must have siphoned it off over many years.

According to an official statement last month, Zhang has been expelled from the party and is currently being detained and investigated for violating the “Party’s political discipline and rules on frugality… [and] clean governance.” 

Xi’s campaign against “tigers” has not uncovered revenue anywhere near that total.  But from a political perspective it has been far more significant, because it violated the unspoken rule that China’s top leaders were immune to criminal prosecution. 

In 2015, when Zhou Yongkang, China’s former chief of domestic security, was sentenced to life in prison for abuse of power, accepting bribes and revealing state secrets, the New York Times described the sentence as “defang[ing] the most dangerous tiger yet… [Zhou was formerly one of] the nine-members on the Politburo Standing Committee, which governs the country. Now he is the most senior leader to be jailed for corruption in more than 65 years of Communist rule.”

Mr. Zhou was found guilty of accepting about $118,000 in bribes and of “leaking six secret documents to… a Beijing fortuneteller.”  The Times went on to report that these “dollar amounts mentioned in the verdict were tiny compared with the Zhou’s wealth… [His] family had documented assets of more than $160 million, a conservative figure that did not include bank accounts, real estate, assets held by proxies or other wealth not reflected in publicly available records.”

Sounds like a case where Mr. Zhou – the $160 million plus “tiger” – may have had a lot to learn from Mr. Zhang – the $38 billion “fly.”  But they both ended up in jail, so they probably had much more to learn from those who have not yet been caught.

In any case, these two well publicized examples are just the tip of a very large iceberg.  According to one official estimate, “51 officials at or above the provincial/ministerial level [“tigers”] were among a total of 621,000 people [“flies”] punished” for corruption in 2018.  An official communique quoted in the same article ominously promised that “We will continue to see that… no stone is left unturned and no tolerance is shown for corruption,”

China experts are split about whether the motivation behind this continuing campaign is for Xi to purge rivals or this is a genuine attempt to reform the Communist Party.  Actually, it is both.  According to Professor Kerry Brown:  “There’s no question at the so called tiger level, where they’re targeting senior officials that it is very politicized. . . . [But] at the so-called flies level… the motivations are quite different… Xi correctly understands that [when]… local officials shake down the citizenry on a daily basis… [it] is eroding the party’s status with the public.”

The road to reform will be a long one, because Xi is fighting against a tradition of corruption that goes back hundreds or even thousands of years in Chinese society.  For a list of 17th century examples, see The Book of Swindles, which is still available on Amazon.

In the Chinese Civil War (1927-1949), corruption was so widespread in Chiang Kai-shek’s Kuomintang that it reduced popular support and contributed to the ultimate victory of Mao Zedong’s Communist Party.

Corruption increased as an unintended byproduct of the government’s approach to rapidly growing the economy.  For example, over the last two decades China has built the world’s longest high speed rail network.  Trains can reach speeds of up to 215 miles per hour over its 22,000 mile length. New lines are still being built, and it is expected to extend to about 25,000 miles within five years.  Much of the funding has been provided by the government. 

Construction came to a temporary halt in 2011 after the fatal collision of two bullet trains killed 40 people, and injured nearly 200 more.  Local officials at first tried to cover up the details by quickly ending rescue operations and burying the high speed cars that had been damaged.  This was followed by a public outcry not just online but also in state-controlled media.  An investigation concluded that the accident was caused by defects in both construction and in management.  A fascinating New Yorker article which explored the background of this tragedy concluded, in part, that this “famous public-works project was an ecosystem almost perfectly hospitable to corruption—opaque, unsupervised, and overflowing with cash.”

A variety of reforms and new safety measure have since restored public confidence, and the 2011 crash remains the one and only fatal accident in the history of Chinese high speed rail.

Ironically, experts believe that corruption and easy money greased the wheels of China’s economic growth.  A recent New York Times article argued that “in 1990s and 2000s, when the country grew the fastest… officials could often be corrupt, but even the party’s fiercest critics sometimes acknowledged that they got things done. Liu Zhijun, the former railway minister, is serving a lifetime sentence for taking bribes and abusing power. He also oversaw the creation of China’s high-speed rail system, which vastly improved life in the country.”

Similarly, a November Wall Street Journal article entitled “China’s Corruption Paradox” argued that “In the 90s and early 2000s, China was very corrupt but also fast-growing. These days, the country is less corrupt by most measures but also slower growing.  That may not be just a coincidence: A growing body of work hints that in the absence of deep institutional and financial-sector reforms, a certain degree of corruption might actually have been essential to China’s growth model…. The basic argument is that when public institutions like courts and markets are fair and well functioning, corruption hurts growth.  When they aren’t – and when officials have a direct stake in growth – moderate corruption can help local bureaucrats and companies circumvent ineffective institutions or nonsensical regulations.”

It will be no surprise that corruption is very difficult to measure.  The most widely accepted metric is the Corruption Perception Index published by Transparency International which “captures the informed views of analysts, businesspeople and experts in countries around the world.” 

In its summary of 2019 published last January, China ranked number 80 in corruption out of 180 countries.  (Denmark and New Zealand were tied for the least corrupt, the United States ranked #23, and Somalia was the most corrupt.)  Still, China’s scores have shown a gradual but definite increase in transparency and reduction in corruption since Xi’s anti-corruption campaign began in 2012.

What would China need to do to improve its rank?  According to a January article in the South China Morning Post:  “If Beijing is serious about tackling corruption, it has to make more transparent its processes in decision making, policy setting and accountability, establish judicial and legislative independence, and empower citizens.”  Similarly, Professor Minxin Pei has argued that “To get rid of corruption in an economy, you really have to strengthen the rule of law, you have to downsize the government, reduce the role of government in the Chinese economy, and also… give the press more leeway in exposing corruption.”  Well, that’s not happening anytime soon.

So, to answer the question in the title of this post, Xi Jinping cannot stop corruption under the current system.  But he can and will continue to reduce it because, as Professor Brown summed it up:  “This is a treacherous time. If the Party is not able to discipline itself . . . then it will lose its mandate to rule, and it will be game over. So the stakes are high, and… this struggle is not going to disappear any time soon.”