Due to its economic weight and an increasingly active outreach towards developing countries under the framework of ’South-South Cooperation’ and its own ’Belt and Road Initiative’ (BRI), the People’s Republic of China’s (PRC) global footprint has become such that it can no longer be ignored by international development actors. As in many other issue areas, strategies for integrity-building in the Global South and in transnational affairs more broadly need to account for the direct and indirect impact of Chinese policies. Some Western political leaders have repeatedly denounced China for undermining governance standards and thus facilitating corruption. China’s involvement in corruption and governance issues on a global scale is however multifaceted, which means that challenges for Western donors coexist with opportunities for constructive engagement. Therefore, this paper takes a practically oriented approach: its aim is to map Chinese actors’ motivations, involvement in and impact on transnational anti-corruption and integrity-building efforts with a view to identifying needs and possible entry points for engagement in related areas of concern for Western donors.
It is argued that a thorough understanding of the domestic drivers underlying Chinese anti-corruption policies is necessary to make sense of Chinese policies in international organisations as well as partner countries in the Global South. See table in main text for an overview of key issues and actors, as well as related challenges and potential entry points for Sino-Western engagement.
Overall, China formally complies with most important international anti-corruption norms and was, notably, one of the first countries to ratify the UN Convention against Corruption in 2006. However, despite the formal criminalisation of active bribery of foreign officials in 2011, the lack of credible enforcement by the Chinese judiciary means that foreign bribery by Chinese companies and individuals continues to go unpunished.
Since 2014, China’s interest in international cooperation against corruption has strongly increased as a consequence and extension of Xi Jinping’s domestic anti-corruption campaign beyond China’s borders. Domestically, this sweeping campaign has been ongoing since Xi Jinping came to power in late 2012. Its scope far exceeds economic crimes such as bribery and embezzlement. The campaign has a strong moralistic and political component, and combines deterrence against bribe-taking and party-members’ ‘extravagance’ with measures to reinforce party discipline and top-down control. As the campaign’s deterring potential rests upon corruption hunters’ ability to catch and repatriate allegedly corrupt Chinese officials who have fled the country, the main focus of China’s growing international cooperation efforts has been on facilitating extradition and asset recovery.
China’s on-the-ground impact on corruption and integrity-building in developing countries remains ambiguous. Recent examples of corruption and political kickbacks related to large-scale infrastructure projects in countries such as Malaysia or Sri Lanka abound, while the absence of public tendering for many politically motivated construction projects poses serious systemic risks. Consequently, Chinese state-owned enterprises have been most frequently accused of reckless bribe-paying overseas. On the other hand, China’s growing presence in developing countries is not as centrally coordinated as often assumed and includes myriads of private actors, who may be more open to corruption prevention initiatives if it is in their long-term commercial interest.
Growing political resistance against Chinese investments and lending in several key target countries of the ambitious BRI, particularly in Southeast Asia, will likely further increase Chinese leaders’ sensitivity to governance issues. Official propaganda has already picked up on the issue, with leading Chinese publications advocating a ’Belt and Road to Integrity’ since around 2017. Both for commercial reasons and due to much tighter regulations issues by the China Banking and Insurance Regulatory Commission (CBIRC), many Chinese actors are improving their compliance and risk management provisions to address corruption risks in overseas development finance.
Constructive engagement on governance issues appears more likely on ‘softer’ aid issues less influenced by geostrategic interests and economic competition. Another channel for potential engagement between Western donors and China may be via ‘triangular cooperation’ in third countries and through regional fora. In 2018, the central leadership set up the China International Development Cooperation Agency (CIDCA) as a high-level coordinating body for China’s highly fragmented foreign aid and development cooperation system. The hope is that this may lead to increased transparency in Chinese aid, improve intra-bureaucratic coordination and implementation, and facilitate better engagement with multilateral aid agencies as well as with bilateral Western donors.