17 August 2016

Lessons from Italy on China’s anti-corruption purge


There is the spaghetti, with tomato and eggs in China or with tomato and cheese in Italy; the pizza, with good things inside (China) or on top (Italy); then the fireworks, the superstition, the amoral bond to friends and family; there is the mafia; and the history of the two empires, the Qin-Han and the Roman, that surged in the 3rd century BC and faced crises in the 3rd century AD, both at the same time. Both also retained a sense of continuity with the ancient past, in the Catholic Church, modeled on late Roman imperial traditions; or in the Communist Party, heir in so many ways to the Chinese imperial legacy. Then, of course, there are Marco Polo and Matteo Ricci, living proof of the Italian knack for understanding and getting under the Chinese skin.

Both Italians and Chinese have always felt that there is something unique, a special attraction and particular intuition between the two peoples, so much so that the first Caucasian to serve as interpreter for US president Richard Nixon in the 1970s was an Italian-American, Guy Alitto, now a professor at the University of Chicago. The sentiment is felt by the Italians and the Chinese. The ethnic Chinese in Italy are the most integrated community of recent immigrants and feel very patriotic—that is, very Italian.

Even political thinking resonates. Chinese president Jiang Zemin’s theory that the party should represent three things (society’s most innovative knowledge, most innovative classes, and most innovative production forces) sounds a lot like Italian Communist Antonio Gramsci’s theory of the party, which elaborated on Machiavelli’s ideas in The Prince. For Gramsci, the Communist Party was then just the latest incarnation of an old concept of political leadership that pushes massive changes, like Jiang’s “three represents.”

So perhaps this deep, intangible link goes beyond the old tales and seeps even into the heart of policy-making, and one wonders whether there is an Italian lesson for Chinese politics now.

In the early 1990s, Italian politics was swept by a wave of scandals. Progressive, left-wing magistrates investigated and uncovered the systemic, deep-seated corruption of old politicians. With their sentencing, judges and prosecutors de facto replaced political decision-making in effecting systemic change. They managed to decapitate the old institutions but did not usher in comprehensive modernization, as they had hoped.

The magistrates de facto helped bring to power their nemesis, tycoon turned politician Silvio Berlusconi, almost as a new guarantor of the old power system. With that, Italy has been mired for over 20 years in fruitless political bickering and inaction. This is also because Berlusconi did not muster the necessary support to stem the anti-corruption magistrates’ newly acquired authority, while the magistrates did not gain the social backing to force Berlusconi out of power.

The present Italian problems have their roots there, and in the difficulty politicians have had in coping with mountains of public debt. Only former Premier Romano Prodi had some success reducing it, but internal bickering brought him down, and since then public spending has been the only instrument to buttress short-term governments with little or no strategy.

The lesson is that there could be no judicial substitute for the deep political reforms Italy needed at the time. Arrests may be a first step, but are not the ultimate solution.

Is China now in the same situation? President Xi Jinping jailed thousands of high-ranking officials for corruption and over a fifth of the old Politburo—five out of 23: security czar Zhou Yongkang; head of Chongqing Bo Xilai; vice chairmen of the almighty Military Commission Guo Boxiong and Xu Caihou; and ex-President Hu Jintao’s chief of staff Ling Jihua.

Moreover, elderly officials, who were for a decade the shadow-power of Chinese politics, have been sent into definitive retirement and no longer have any influence on the decision-making process. As in Italy 25 years ago, there is a problem with the system, not only with the people. There is a problem in the mindset and social habits that is impossible to change overnight. All of this started with the system set in place after the fall of Maoism in the late 1970s.

Then Deng Xiaoping made the grand proposition of freeing the entrepreneurial spirit of every Chinese person with a simple slogan: to become rich is glorious. There were no strings attached to this bright green light. So officials, disgruntled after ten years of Cultural Revolution, went into business exchanging their power for money. There was no vested power to defend: the officials who ruled the country during the decade of the Cultural Revolution were sidelined, and their substitutes were people who during the earlier decade were “reeducated,” i.e., sent to prison or labor camps. Nobody had any turf to protect, and all were dirt poor with nothing to lose but their indigence.

Forty years later, the situation in China is very different. The officials, target of Xi’s present anticorruption campaign, are all rich and mighty. They directly dominate some 70% of the national assets and hold power of life and death over any private enterprise. In fact, in recent decades private companies could survive and prosper as long as they could “kao shan” (“lean on a mountain”), i.e., have the protection of some political authority.

There was a somewhat similar situation in Italy in the 1990s, where economic activities often had a special bond with politics, and vice versa.

Therefore, in China, like in Italy, limiting the scope of change to clearing the deck of “the corrupt” may usher in a time of political and economic stagnation.

Xi in fact has the power to stop the old corrupt politics, but the pervasive corrupt mindset and unofficial “rules” of the system are still there. The old “corrupt forces” may not be strong enough to move against Xi, but they have enough clout to obstruct significant moves. A People’s Daily interview with “an authoritative person” a couple of months ago is a hint of this. There are signs of a political and economic stalemate.

The Italian lesson is that simply taking power away from the old establishment without changing the rules of the political and economic game can open a Berlusconi-like era: a protracted period of inaction when the country slides backwards in the international context.

In 40 years of fast development, China has built a whole set of business and political practices that cannot be simply annihilated by picking out the most nefarious elements. Those were the extreme examples of something pervasive, in which nobody can claim to be innocent.

Perhaps for China and Italy it is worth looking at the precedent of the aftermath of the Cultural Revolution. Deng started from a clean slate, which was granted by Mao’s destructive ten-year campaign. Xi also needs a clean slate, which in this case can be achieved through some kind of amnesty for economic crimes, as I argued at length elsewhere. Amnesty would create the basis for a new social pact in China. In fact, both in China and in Italy, there were social pacts upholding the “corruption.” In China, in a nutshell, the pact was that the leadership “bought” support from people and officials for the reforms and opening in return for their freedom to pursue money.

Xi’s anti-corruption campaign, consciously or not, broke Deng’s old social pact, and now China needs a new one. It can’t simply go back to the old one or be stuck in this stalemate. On one hand China’s declining economic returns could ominously point at Italian bad economic shape, fruit in many ways of the difficulty of shaping a new political-economic pact.

As everyone in the modern world, including Chinese Marxists, is a son of Adam Smith, we know that an economic clean slate will create also the conditions for political reform. This is particularly true in China.

The issue is where does Xi want to go, and where can he go?

Francesco Sisci is a Senior Research Associate of China Renmin University. The author of Asia Times’ Sinograph column, he was also Asia Editor for the Italian daily La Stampa and Beijing correspondent for Il Sole di 24 Ore, and has written for numerous Italian and international publications.