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Top team removes lingering doubts

By Ed Zhang (China Daily Africa) Updated: 2014-08-01 09:21

Swift, decisive action by Xi-Li to root out corruption would certainly win investor approval

If China was compared to a publicly listed company, its top executives' most important achievement so far this year would not be their 7.4 percent GDP growth, nor their abolition of control over more than a hundred approval requirements.

Neither would it be their action to shore up some of the longest-term holes in corporate governance.

No, the most decisive action that China Inc's leadership team of Xi Jinping-Li Keqiang has taken is to discipline two high-profile members of Beijing's top power circle: former Politburo Standing Committee member Zhou Yongkang, known also as China's security boss in the overseas press, and General Xu Caihou, the former Politburo member who controlled the promotion of all high-ranking military officers.

Xu's case was reported to the public on June 30, and Zhou's on July 29 - but both of their clandestine behaviors have long provided regular fodder for the nation's rumor mill.

The sometimes rather brash activities, too, of their family members and friends have long been advertised as presenting possibly serious consequences one day for either themselves, or "the company", namely the People's Republic of China, with its head office in Beijing.

However, the chairman and CEO of China Inc, Xi Jinping, has shown considerable managerial acumen by doing the right thing, at the right time, in the right way.

It is naive to argue that both Zhou and Xu retired when the Xi-Li team assumed office. Influence such as theirs does not "retire".

As each used to operate extensive personal loyalty networks, locking them up in the cage of law and justice will inevitably incur a risk that is still hard to fully quantify.

But by quickly removing their former aides and lieutenants, too, from the positions in which they were placed, Xi has managed to minimize the shock waves of this anti-corruption campaign to the economy, while maintaining a steady economic growth.

It is difficult to predict at this moment whether there are still more high-ranking officials and their family members set to feel the full weight of the courts.

However, if Zhou and Xu can be rooted out in this way, it shows that no one - no matter their level of seniority, past or present - is going to be allowed to get away with anything untoward, and can expect to be exposed and duly investigated.

The key point here is that the Xi-Li leadership has achieved a decisive victory in securing its own authority.

From now on, officials guilty of corruption will have a hard time sleeping at night if they think the investigators might have reason to be knocking on their door.

Any risk of political interruption as a result of their anti-corruption campaign has been brought under control, meaning the management of China Inc has been able to show its investors and its "staff members" an encouraging set of mid-year results.

In two swift moves, the largest and certainly most potentially dangerous stumbling blocks to its future development have been shoveled, neatly, to the side of the road.

The press reaction at home and abroad to the downfall of Zhou and Xu has been of strong support for the action taken by the company's two top executives.

Official corruption is the natural ally of lawlessness and government-backed monopoly.

It would be natural, too, to assume that the families and friends of corrupt officials would have to be included.

Small wonder that on the same day as the investigation into Zhou was revealed, it was announced that the leadership is now planning to hold a top-level meeting in October to map out further efforts in the "construction" of the rule of law.

Business law, one can reasonably assume, will also be part of that process.

Indeed, in the remaining months of the year, there is a chance to see more things done in reform than in the first half of the year, when nothing was as quite sure about both the economy's growth potential and the leadership's ability to manage the anti-corruption campaign.

The picture is much clearer now.

The author is editor-at-large of China Daily.

Top team removes lingering doubts

Top team removes lingering doubts

Infographic: China's economic performance in H1, 2014 China's economy to grow 7.5% in 2014: IMF

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