China's complicated relationship with political corruption

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Among the many challenges facing China's leaders, it might be the one that keeps them up latest at night: How do you prosecute one former Communist Party star with corruption, as evidence mounts that others around him were amassing even greater family fortunes on the side?

The two narratives surrounding the Communist Party elite – that they're simultaneously corrupt and hell-bent on fighting corruption – collided Friday. There was the expected news that one-time rising star Bo Xilai had been stripped of his immunity from prosecution, clearing the way for what's expected to be the country's biggest political trial since the Gang of Four were indicted following the Cultural Revolution.

The other headline, quickly made inaccessible within China, was a New York Times exposé into the at least $2.7-billion (U.S.) in wealth the newspaper found had been accumulated by the family of Premier Wen Jiabao.

The revelations about Mr. Wen's family wealth followed on an earlier Bloomberg report that traced almost $800-million in assets to relatives of Vice-President Xi Jinping, the man set to succeed Hu Jintao as Secretary-General of the Communist Party during a key party congress that begins Nov. 8. Mr. Xi is also expected to take over as President early next year.

Taken together, the reports highlight the bottomless can of worms the ruling party has opened by purging one of its own in Mr. Bo. It also points to why an official magazine controlled by Mr. Xi has recently promoted Singapore – where political leaders are paid millions in official salaries and thus perceived as incorruptible – as a model China's rulers should look to as they ponder political reforms.

Until February, Mr. Bo ruled the southwestern city of Chongqing and was expected to join the elite Standing Committee of the Politburo during the long-planned power transition that begins Nov. 8. Instead, Mr. Bo will stand trial for charges of massive corruption and abuse of power, as well as involvement in the cover-up of the murder of a British businessman.

Mr. Bo's wife, Gu Kailai, has already confessed to poisoning Neil Heywood, a business associate of the family, last November. Following a one-day trial, she received a death sentence with a two-year reprieve.

While the murder has dominated headlines internationally, the Communist Party has used its control of domestic media to portray Mr. Bo's downfall as proof of its determination to fight runaway corruption within the party, a major cause of public discontent.

"Through Bo's case, a principle was upheld – no matter how high the position a Party member holds and how influential he is, he will be held responsible and face severe punishment for violating Party disciplines and laws," read a recent editorial on the Xinhua newswire. "The decision is another example in showing the [Communist Party's] clear stance and firm determination to fight corruption. It will be welcomed by the people."

So how does the Communist Party explain coming down so hard on Mr. Bo, while ignoring the evidence against Mr. Wen and Mr. Xi? (Bloomberg traced a relatively paltry $136-million in assets to the Bo family.)

The short answer is, it won't. The English and Chinese versions of The New York Times website were blocked in China yesterday, within hours of the story about Mr. Wen's family's assets appearing online. Bloomberg.com has been blocked since June, when its story about Mr. Xi's wealthy relatives was first published.

The findings of the investigation into Mr. Wen's family were in many respects, not a surprise. It had been widely known outside China that his wife, Zhang Beili, was prominent in the country's diamond trade and that their 40-year-old son, Winston Wen, was a well-known businessman whose career appeared aided by his family name.

But within China, the revelations could be explosive if they become widely known. Mr. Wen has become perhaps the most popular politician in the country by cultivating an endearing man-of-the-people profile. According to The New York Times, Mr. Wen's 90-year-old mother controls, on paper, a financial-services company that was worth $120-million five years ago.

It was Mr. Wen who gave the green light to an investigation into Mr. Bo, his longtime rival, last spring. The New York Times report contained an intriguing hint that Mr. Bo's allies may now have aided or encouraged the investigation in Mr. Wen. "[Mr. Wen's] enemies are intentionally trying to smear him by letting this leak out," an unnamed associate of the premier was quoted as saying.

The only way forward, Mr. Xi may have concluded, is to reform a system that currently sees officials paid tiny salaries (Mr. Hu, the president, is presumably the best paid at about $11,000 a year), encouraging reliance on outside sources of income.

Singaporean President Lee Hsien-loong is the world's best-paid leader, with annual pay of almost $2.9-million. Mr. Lee presides over one of the world's fastest growing – and least corrupt – economies, as well as a nominally democratic system that has seen his People's Action Party win every election since 1963.

A policy journal published by the Central Party School, an academy for training future Communist Party officials that is currently headed by Mr. Xi, this week praised the "high efficiency, incorruptibility and vitality" of the Singaporean model. It also noted another feature that's likely attractive to official Beijing: "The People's Action Party has won consecutive elections and held state power for a long time."