China’s “Culture of Cheating”

Xi Jinping’s anti-corruption drive has small time corrupt officials scurrying for cover like cockroaches when the kitchen light goes on. This house cleaning is good for China, but not entirely satisfying. The broom comes nowhere near the real source of corruption in China: the hidden world of influence peddling, power brokering and back room deals where China’s leaders, their families and well-connected insiders divvy up the proceeds of China’s development. Xi’s own extended family is worth several hundred million dollars and the net worth of Wen Jiabao’s clan is in the billions.

While Xi talks about “the renaissance of the Chinese nation” and a new “openness”, China’s Party and business elites continue to game the system for all it is worth. Not all Party members are corrupt; there is, for instance, no evidence that Xi or Wen violated any laws to help their families get rich. But even officials who are clean can use their positions to help family members, associates, or subordinates to get ahead. This help may involve nothing more sinister than a phone call from a senior official to a well placed connection requesting consideration for a favored relative. As officials get closer to the top, even the phone calls become unnecessary. Favor seekers wait in line to offer top leaders or their relatives and friends gifts, lucrative business deals or plum jobs. The fact is, in a political system characterized by opaque governance, lack of accountability, repressive and omnipresent state control of the media, and police and courts that serve the ruling Communist Party, the opportunities to use public office for personal gain are legion and it takes a strong willed person not to take advantage of them.

The hidden world of backroom deals that puts a select few on the inside track to opportunities created by high speed economic growth is one of the factors responsible for China’s huge income gap and its massively skewed distribution of national wealth. The fact that some insiders are rent seekers looting the country while others are simply smart business people in the right place at the right time is almost beside the point. The system that nurtures all of them is manifestly unfair and everybody in China knows it.

The fundamental dishonesty of leaders who talk of service to the people and socialist values while their families and cronies get rich has not gone unnoticed by Chinese people. They are well aware they are expected to do as leaders say, not as leaders do. In practice, however, millions and millions of ordinary Chinese have pursued money with the same single-minded determination that has driven Chinese elites. Many have also shown the same disregard for ethics and honesty that more than a few leaders have shown. China’s exceptionally cutthroat business and social environments are products of this amoral single-minded determination.

In fact modern China suffers from an epidemic of dishonesty, double dealing, fraud, cheating and outright thievery. Greed driven scandals emerge on an almost daily basis. Many of these scandals are minor, some almost silly, but others are downright lethal. Corrupt officials are central to some, peripheral to others. Shady milk distributors add a toxic chemical called melamine to milk supplies because the chemical makes the milk appear to have a higher protein content. Thousands get sick and several infants die. Milk company executives collude with government officials in a failed effort to cover up the problem. Vegetable sellers spray a carcinogenic agent on bean sprouts because it makes them look “fresher”. Factories dump toxic waste into local water supplies and lie to cover up. Airlines are discovered to employ pilots with faked credentials. Recently constructed bridges collapse because adulterated concrete was used to build them.

Over and above business scandals, an inordinate amount of lying and cheating permeates everyday life. Professors fake their credentials and publish plagiarized or fabricated research results. Students use the internet and the copy and paste commands to plagiarize their entire written output at university. American universities have learned to their chagrin that many applications submitted by Chinese contain fabricated materials. A legion of “consultants” in China create essays and transcripts from scratch for applicants. There are even cases where surrogates used forged credentials to take language placement tests for applicants whose skills are not up to snuff. Small vendors, restauranteurs, and service people cheat unwary customers without hesitation and friends lie to each other in ways that make your head spin.

The origins of this “culture of cheating” go back to the beginning of the reform era in the late 1970s.  Deng’s reforms created the framework for China’s explosive growth and opened the way for Chinese people to make money. The reforms began in a society that was exhausted and still reeling from the wild policy swings, violent political campaigns and murderous class warfare of the Mao years. Since it had come to power in 1949, the Party under Mao had worked with considerable success to obliterate traditional Chinese values. Values that could have tempered the pursuit of riches in recent years with ethical constraints. Mao’s final “gift” to the Chinese people, his brutally destructive ten year long Cultural Revolution, left the Communist Party’s legitimacy and the socialist values it had claimed to represent in shreds.

The race for riches in the new world Deng created got underway in the moral vacuum that existed at the end of the Cultural Revolution. The pursuit of wealth became an end in itself; means were irrelevant. Party elites and those connected to them were first out of the gate. These elites have remained in front to this day, consolidating their position along the way. Lacking an inside track, ordinary Chinese have nonetheless run their own race, often modeling their behavior on that of their leaders.

Today’s public anger over corruption is, in some respects, an expression of the revulsion many feel for the “culture of cheating”. More than a few Chinese are appalled by the pervasive dishonesty they see around them. They are enraged by the “anything goes to get rich” mentality that surrounds them with unsafe foods, fake medicines and toxic environmental damage.

Fifteen years ago, if you asked young Chinese what they wanted to do, virtually every one of them said “make a lot of money”. The good news is that today many give more nuanced responses. Job and career satisfaction are likely to come ahead of making money for money’s sake. They talk of quality of life concerns not directly connected to money: the freedom not necessarily to criticize but to say, read and do what satisfies and the desire for a clean, safe environment. Some Chinese, both young and old, are seeking a moral framework and guidelines for ethical behavior in the modern world from Confucianism, Buddhism or even Christianity.

The bad news is that an effort to address the underlying corruption and unfairness that has created the “culture of cheating” could bring China’s entire political system tumbling down. Xi and his colleagues are walking a tightrope as they try to balance the demands of Chinese society against the need to protect the system that keeps them on top. China watching is sure to remain an exciting business in the years to come.

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China’s “Culture of Cheating” — 22 Comments

  1. Amen! Great summary of the culture of dishonesty and its consequences, which I have also pondered at length. But I didn’t think to connect it with the anti-corruption drive–interesting angle.

    • I think there is definitely a connection between the opportunism and hypocrisy of political elites and the pervasive dishonesty you experience in China today (and I have to repeat, I am not suggesting all Chinese are somehow inherently dishonest; the dishonesty is nonetheless pervasive). A campaign that goes after small time graft for the most part just does not address the core problem of dishonesty/lack of values and I think that is the connection to the extent there is one.

  2. The CCP lead the cheating culture in China in the early 50’s, first campaign I can remember was the so called Public Private Cooperation when tens of millions of business owners were cheated of their ownership and management rights of their business. That triggered the first exodus of capital and business talent from PRC. Hundreds of thousands of businessmen committed suicide because they can no longer honor their promises to business partners, associates, friends and family after their resources were taken away.

    During the Communes period, people lied about how much they worked and faked their time sheets, and Party leaders, having the power of whether to give you food, started taking favors from their charge, and common people started to learn how to get more from their betters through granting favors to their betters.

    The campaigns that followed also taught Chinese to lie about their friends, families and other loved ones to revenge past transgressions, gain favor of the Party and betters, or just to survive. Lying and cheating became accepted behavior of New China by the 60’s.

    • Thanks Bill,

      You are absolutely right, the CCP’s lies and opportunism go back well before the reform era began. The Yan’an “rectification” campaigns had more to do with eliminating political opponents than they did with anything else (not unlike a lot of “anti-corruption” work today). The end of the CR and the beginning of the reforms was nonetheless a sort of watershed when it comes to CCP dishonesty. With Mao’s death, the Party had a chance to break with the past and come clean with Chinese people and instead they piled more lies on top of the edifice they already had, in particular, the idiotic Mao was 70% right 30% wrong formula. In any case this seemed like a reasonable place to start a discussion about contemporary issues with cheating and dishonesty in China.

  3. “The broom comes nowhere near the real source of corruption in China: the hidden world of influence peddling, power brokering and back room deals where China’s leaders, their families and well-connected insiders divvy up the proceeds of China’s development. Xi’s own extended family is worth several hundred million dollars and the net worth of Wen Jiabao’s clan is in the billions.”
    The proceeds of China’s development have been very fairly ‘divvied up’ with the Chinese people – far more fairly than the proceeds of our own development. Ask the Chinese (90% home ownership, incomes doubling every 8-10 years, universal medical insurance, mandatory vacations, etc.) 85% of them, according to Pew and Edelman, trust and approve of their government.
    The wealth of the leaders’ families is the norm in all Confucian societies (I live in Thailand and have lived in Japan): if you are related to a leader then money in the form of directorships and stock options is almost literally thrown at you. The mere prestige of having ‘the Prime Minister’s brother’ on your board is quite sufficient. Indeed, it is obvious that Xi’s family would have done as well without him: they are the children of a famous Revolutionary hero, highly educated and extremely well-connected, who were in the right place when China’s boom began.
    China is succeeding despite minor corruption. We are failing because of massive, systemic corruption. That may not be the narrative that our media push, but it is the self-evident truth.

    • “China is succeeding despite minor corruption. We are failing because of massive, systemic corruption.” This may be self-evident truth to you, but with all due respect, I find this neither self-evident nor the truth.

      Thanks for your comments.

  4. Steve –

    Great post as always. Given the level of corruption and the problems that companies like Caterpillar are facing today, what do you suggests businesses looking at China do?

    • Thanks Mike. Actually the Caterpillar fiasco is an excellent example of cheating/dishonesty that has nothing to do with official corruption. Employees of the Caterpillar acquisition, Siwei, looted it from the inside.

      There are no magic formulas that companies can use to avoid this kind of problem. The international people at home need to build sound relationships with potential partners, associates, and the members of their China team on the ground. They need to make very sure the people on that China team are trustworthy (there are rumors circulating that one or more members of the Caterpillar acquisition team were involved in the deception). And when it comes to a China investment of any kind, be sure you have removed any rose tinted glasses and that your expectations are realistic. Then get busy with due diligence, due diligence and more diligence.

  5. Hi Steve,

    Nice commentary. What I am curious of is to what extent this cheating and corruption is present in China in relative terms. While corruption might be massive in absolute terms in China, it can still be relatively small. Because of its size, any small problem can gain massive absolute scope. I say this because, despite the “rampant” corruption and nepotism the system has not collapsed nor do I see it collapsing any time soon as many doom-sayers suggest. It would seem to me that this sort of political system (and everything corruption or not in China is political), it retains some internal dynamic and stability.

    And this is by no means common to just the CCP era, corrupt, nepotism and rent seeking is the common thread throughout Chinese history. The CCP era probably isn’t even the worse.

    • Good point – given China’s enormous size, how “rampant” is corruption? My own sense is that it is pretty widespread. For many years now, the Party has had little to offer in the way of values or ideals to inspire people to join. I have no hard data, but my sense is the Party today is composed largely of people who joined in the first place as a way to get ahead. The result is a lot of self-serving at best and out right corrupt behavior at worst.

      I agree there is much about modern China’s political system that has deep roots in Chinese history. As for doomsaying, there is plenty not to like about the CCP and you have to believe China deserves better, but the Party has proven to be resilient, adaptable and smart when it comes to staying in power.

  6. Having started a business by myself in China in 1990 , I believe that the real issue is that Chinese people, in most part do not acknowledge that there will be a future consequence to an evil action.
    Therefore they can say or do anything they like in order to get what they want.
    A former senior staff member once said to me that he could committ murder and nothing would ever happen to him.
    Our concepts of divine retribution, morality and ethical behaviour have no place in Chinese society. The big question we should be concerned is ” how will the influx of Chinese business practices into our economies effect our societies?
    We always believed that “nothing is what it seems” when it comes to doing business with mainland as they are incredibly deceptive in order to get what they want from you.

  7. For those of you paying attention you would know that all poverty reduction that has occurred on the planet over the last period of time has come in China. At least according to the world bank. e.g Wage Rises This Year [2012]. Eighteen provinces and cities have revised their minimum wage levels this year, local government statistics show. The highest monthly minimum wage is 1,500 yuan in the special economic zone of Shenzhen, while the lowest is in Jiangxi Province (870 yuan). Beijing has the highest hourly minimum wage (14 yuan). Central government policy requires that provinces adjust their minimum wage at least once every two years. The State Council announced in June that it will continue to raise nationwide minimum wages by at least 13 percent per year over the course of the next three years.
    While the u.s. has been demolishing two countries, well three, no, four [Afghanistan, Iraq, Libya, Syria] in the name of “democracy”; causing the deaths of hundreds of thousands of innocents and spending a trillion dollars. China has been responsible for 100% of the reduction of poverty in the world.
    China, every once in a while executes a mayor, or banker, or business person for corruption. When was the last time the US federal government did anything serious about corruption [cheating if you will]. Wall Street [mortgage street, bank street, financial street] in the US is a far more rapacious ‘culture of cheating’ and one that is lionized in the US corporate press, and that bastion of ethics…. Congress. The phrase “culture of corruption’ strikes me as a bigotry and yes, colonialism, by ‘essentializing’ a people. People are just as ‘honest’ as they have to be. Ask the Swiss about Nazi gold. Corruption is everywhere. Poverty reduction isn’t. When it comes to ‘committing murder [and torture] Gitmo is the only evidence needed along with the Court’s [and Obama's] immunization of torturers. Corruption is everywhere. Poverty reduction isn’t.

  8. Great article & great discussion, Steve. I’d thought of bribes in China as being more direct. But it makes a lot of sense that it would be favors for family and network contacts. It’s also interesting to see where the cheating culture could have been curbed and better aligned with traditional Chinese ethics. Do you think that the revulsion that so many Chinese are feeling towards the corruption will eventually affect real change?

    • Ordinary Chinese are increasingly assertive in their demands for change. These demands cover a wide range – more freedom of expression, more fairness, a cleaner environment, a government that is more open and accountable, less corrupt. China’s leaders have to find a meaningful way to respond to these demands; in my opinion, doing nothing is not an option. I have said it before, but to repeat, the Party is smart and resilient – they may manager to satisfy the demands of ordinary Chinese and retain their monopoly on political power. Or they may finally be forced to introduce some kind of pluralism into the Chinese political system. Updates as news breaks – we just do not know how this will play out.

  9. Just to add a comment. I believe that the current anti-corruption “crusade” will indeed be different from all the previous ones. Not necessarily because of the Party but because of the way society has changed. Particularly because of Weibo and other means of online communication. Weibo, in itself is not entirely powerful, it is the mass proliferation of smartphones with 2G/3G/4G connections that combined with social media, means that corrupt and abusive officials can no longer hide. When you have access to a camera, video recorder, internet, and social media in a little device that can be carried in your pocket the old ways of doing things will change.

    Right now the majority of cell phones, despite China being the world’s largest cell phone market, are not smart phones. As cheap smart phones start to reach the grassroots (I mean like the real deep countryside) brought on by companies like ZTE and Huawei I can only see the citizen watchdog effect of Weibo and other social media get stronger.

    So overall, I am optimistic that this time, things really are different and turning a corner.

    • Could not agree more – an increasingly alert, “plugged in”, and very demanding citizenry is having an enormous impact on the current campaign. Nothing the Party is doing this time is different from past campaigns. I remember several times in the past when there were orders from the top to curb extravagance and the mid-level officials I used to know started spouting righteous talk about hard work and service. Later, after the heat died down, it was back to business as usual and expensive banquets in private rooms. With more and more ordinary Chinese on the look out for official shenanigans, the nature of “business as usual” may really start to change for a lot of “public servants”, regardless of what the Party does. One can only hope so…

  10. woke up this morning to read about extensive doping/cheating in Australian sports world. doing the right thing v desire to win at all costs, isn’t a problem exclusive to China..

  11. Pingback: Riot After Chinese Teachers Try to Stop Gaokao Cheating - China Digital Times (CDT)

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