PPP Corruption - Hochschule Bremen

Transcription

Corruption in China
Causes, Effects and Counter-measures
Presentation Hochschule Bremen, 31.05.2013, by
Hannah Bayer
Katharina Kirchhoff
Leonie Zimmermann
2013 Copyright © All Right Reserved
Table of Content
1. Introduction
2. Corruption in China
1.
2.
3.
Historical review
Causes of corruption in China
Effects of corruption in China
3. Reactions to corruption in China
1.
2.
Society
Politics
4. Counter-measures against corruption
1.
2.
Taken by politics
Taken by international companies
5. Conclusion
31.05.2013
Corruption in China - Hannah Bayer, Katharina Kirchhoff, Leonie Zimmermann
2
1. Introduction – The Topic
• Influence on people’s life
• High-level officials accused of corruption
• Declining quality of goods
• Escalating public interest
• Policy forced to take action
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1. Introduction - Definition
• Corruption is
− “the abuse of entrusted power for private
gain”
Transparency International 2012.
− “dishonest or fraudulent conduct by those in
power, typically involving bribery”
Oxford University Press 2013.
− “the action or effect of making someone or
something morally depraved”
Oxford University Press 2013.
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2. Corruption in China
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2.1 Historical Review
Score
• Corruption Perceptions Index
9
8
7
6
5
4
3
2
1
0
7,4
7,3
7,7
8,2
8,2
8
7,8
7,9
8
7,9
8
7,9
Germany
China
3,5
3,5
3,4
3,4
3,2
3,3
3,5
3,6
3,6
3,5
3,6
3,9
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Years
“CPI”: own illustration according to Transparency International Archive (ed.) 2011.
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2.1 Historical Review
• High-level official He Shen (1755-1799) in
Qing Dynasty (1644-1911)
− Misled Emperor Qianlong who had trust in him
− Stole from public funds e.g. military
− Enjoyed full freedom of actions
− Sentenced to death by Qianlong’s successor
Cultural China 2010.
Roberts 2011.
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2.2 Causes of Corruption in China
• Imperial China
− Weak control mechanisms
− Too few officials
− Complex tax system
Kiser, Tong 1992.
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2.2 Causes of Corruption in China
• Today
− Lack of control over officials
− Low average salary
− “Windfall profits” created by reforms
− Low risk of punishment
− Censorship of the press
− Little separation of powers
− Guanxi
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Oster, Tan 2013.
Qian 2012.
Lane, Hoffmann 2012.
9
2.3 Effects of Corruption in China
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2.3.1 Effects of Corruption in China: Economy
• Unfair competition
• Increase in prices and costs
• Decrease in quality
• Direct costs of corruption estimated
US$86 billion in 2003
• Corruption in infrastructure sector
Pei 2007.
Divjak 2008.
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2.3.1 Effects of Corruption in China: Economy
• Sichuan Earthquake 2008
“Sichuan Earthquake”
http://www.theepochtimes.com/news_images/highres/2008-5-21-quake_81140589.jpg, accessed 16. May 2013
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2.3.2 Effects of Corruption in China: Society
• Threat by declining quality of goods
− Milk powder scandal of 2009
“Sanlu Milk Powder“:
http://www.baiyjk.com/UploadFile/2008/9/13/200809131
0065231.jpg, accessed 08. May 2013
Stern de. 2009.
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• Corruption in medical sector
− Illegally produced medicine
• Rising prices
− Allocation of corruption costs
• Unemployment
• Widening gap between rich and poor
Wang 2009: 34.
Graeff 2002: 5.
Waibl 2005: 151.
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• Rising prices
Production costs / piece
Profit margin (30%) / piece
Costs for corruption / piece
Price of sale / piece
Company A
No corruption
100 RMB
30 RMB
0 RMB
130 RMB
Company B
Corruption
100 RMB
30 RMB
10 RMB
140 RMB
“Allocation of corruption costs”: own illustration.
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Wang 2009: 34.
Graeff 2002: 5.
15
• Rising prices
• Unemployment
• Widening gap between rich and poor
Wang 2009: 34.
Graeff 2002: 5.
Waibl 2005: 151.
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3. Reactions to Corruption in China
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3.1 Reactions to Corruption: Society
• Loss in loyalty and trust in politics
− Scepticism towards success messages
• Loss in trust in local producers
− Buy imported products
− Vicious circle
− Middle class has money and knowledge
• Anonymously publish cases
Heberer 2006: 3.
Spiegel Online (ed.) 2013: 1.
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3.1 Reactions to Corruption: Society
• Handle anger in
novels, TV series
− 抉择 (Juézé) by 张平
(Zhāng Píng)
− 大雪无痕 (Dàxuě
wúhén) by 陆天明
(Lù Tiānmíng)
Luebke 2012a: 3.
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“大雪无痕“: http://ec4.imagesamazon.com/images/I/41bbnwYiiwL._SL5
00_AA300_.jpg, accessed 21. May 2013
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3.2 Reactions to Corruption: Politics
• Urge
− Lack of political integrity
− Demand for social equality
− Corruption undermines party's right to rule
− Growing discontent within party
Botschaft der Volksrepublik China in der Bundesrepublik Deutschland (ed.) 2012.
Ackeret 2013.
Economist (ed.) 2012.
N24 (ed.) 2013.
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• Rhetorical Response
− “Maggots in cadaver“
− Against “tigers and flies“
− Determined fight against corruption
“Xi Jinping”:
http://jto.s3.amazonaws.com/wpcontent/uploads/2013/03/p1-chinaz-20130325.jpg, accessed 09.
May 2013
− Need to reform
Ballweg 2013.
Hatton 2013.
Süddeutsche.de (ed.) 2013.
Botschaft der Volksrepublik China in der Bundesrepublik Deutschlan (ed.) 2012.
Ackeret 2013.
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• Xi Jinping publicly orders
officials to be moderate
• Wang Qishan new
Secretary of CCP’s
Central Commission of
Discipline Inspection
(CCDI)
• Loosen press censorship
“Wang Qishan”:
http://news.ah361.com/d/file/video/xinwenshipin/guone
ishipin/2012-1220/4abb84c3ad580d8b98bbdcf568883cfc.jpg,
accessed 08. May 2013
South China Morning Post (ed.) 2013.
FlorCruz 2013.
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3.2 Case “Supervision by the People”
• 人民监督网 (Rénmín jiāndū wǎng)
“Rénmín jiāndū wǎng“:
www.rmjdw9.com, accessed 24.
May 2013
• Founder 朱瑞峰 (Zhū ruìfēng)
• Chongqing official dismissed
• Intimidation and death threats
• Website blocked partially
CNN (ed.) 2013.
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4. Counter-measures against Corruption
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4.1 Counter-Measures Taken by Politics
• Measures taken by CCP
− Central Commission for Discipline Inspection
(CCDI) formed 1979
− Intra-party supervision department
− www.jubao.gov.cn
− Provisions monitoring cadres and their
families
China Daily (ed.) 2006.
Wedemann 2012: 6.
Gong, Ren 2012: 12.
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4.1 Counter-Measures Taken by Politics
• Difficulties
− Most laws and regulations ineffective
− Bribe takers punished more severely than
bribe payers
− Lack of value based motivation
− One-party system
− Missing transparency
Rimmele 2013.
Wedemann 2012: 5.
Gong, Ren 2012: 16.
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4.2 Counter-Measures Taken by International Companies
• Trainings for staff
• Introduction of anonymous report system
• Background checks of business partners
Kamp 2012: 1-4.
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“Logo of Siemens AG”: http://upload.wikimedia.org/wikipedia/de/5/5f/Siemens-logo.svg, accessed 21. May 2013
• Example of Siemens AG:
− Employees bribed officials
− Company’s image was damaged
Kamp 2012: 1-4.
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− Measure catalogue
Restriction of managers’ access to bank accounts
Avoidance of cash-payments
Engagement of > 600 compliance managers
Arrangement of trainings
Introduction of a point-system
No punishment because of lost deals
Online application to evaluate business partners
Kamp 2012: 1-4.
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− Compliance manager (CM) discovered new
case of corruption
− Siemens sellers bribed buyers of public
hospitals
− CM was dismissed four months after reporting
Rubenfeld 2013: 1.
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5. Conclusion
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5. Conclusion
• Important topic
− Unfair competition in economy
− Danger for society, leading to uncertainty
• Caused by
−
−
−
−
−
Lack of public scrutiny
Lack of transparency
Little separation of powers
Inconsequent enforcement of laws and regulations
Many governmental institutions, but no independent
organisations
Hille, Rabinovitch 2013.
FlorCruz 2013.
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5. Conclusion
• Possible counter-measures
− Higher level of transparency
Public report on cadres’ salary
− Stricter separation of powers
− Consequent enforcement of rule of law
− Stress of prevention in addition to punishment
− Value based mindset
Hille, Rabinovitch 2013.
Luebke 2012b.
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Thank you for your kind attention!
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PPP Corruption - Hochschule Bremen

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