Graft fight can inspire other countries

The Communist Party of China has placed former public security chief Zhou Yongkang under investigation for suspected "serious disciplinary violation", a term that usually refers to corruption. But what does Zhou's fall mean?

Before his last post, Zhou had a long career in the oil industry. In 1996, he became the chief of petro-behemoth China National Petroleum Corporation and soon the Party secretary of Sichuan province. From 2002 to 2007, he was the minister of Public Security. In 2007, he became a member of the 17th Political Bureau Standing Committee of the CPC Central Committee. Thanks to his public mandate, Zhou is said to have overseen the expansion of the country's public security sector.

About a year ago, the central government launched an investigation into Zhou as part of a wider anti-corruption campaign following the trial of Bo Xilai, former Party secretary of Chongqing municipality, who was found guilty of corruption in September 2013.

Amid the leadership transition in 2012 and 2013, many Western "sinologists" claimed that the new leadership was too conservative to engage in anti-corruption reforms.

At the time, I argued that China was moving toward reforms and would take the anti-corruption campaign to a new level - focusing on the rule of law.

In March 2012, CPC General Secretary Xi Jinping spoke at the Central Party School about the importance of collective responsibility and the dangers of private interests. What the world has witnessed in China since then is a determined and broad anti-corruption campaign.

As Xi said in January 2013: "We must uphold the fighting of tigers and flies at the same time, resolutely investigating law-breaking cases of leading officials and also earnestly resolving the unhealthy tendencies and corruption problems which happen all around people."

China's anti-corruption campaign is not unique, but its massive scale is unprecedented in modern history.

In Singapore, corruption was rampant throughout the colonial era well into the 1950s. Reforms came only after the country's first prime minister Lee Kuan Yew moved the anti-corruption government agency into his office so that it would be independent of police and other government agencies. Today, Singapore ranks fifth in the Corruption Perceptions Index, well ahead of the United Kingdom.

Hong Kong learned from Singapore. In the 1970s, it was still widely considered one of the most corrupt cities in the world. Reforms came only after huge protests, which led to the launch of an independent anti-corruption government body with wide investigative powers. Today, the Hong Kong Special Administrative Region ranks 15th in the Corruption Perceptions Index, ahead of Japan and the United States.

On the Chinese mainland, Wang Qishan, the tough former mayor of Beijing, was appointed to lead the crackdown on corruption. And as the Party disciplinary chief, he has enjoyed great amount of freedom.

In Singapore, the anti-corruption reforms were based on punishment, education and prevention. But because of its population of more than 1.3 billion, China's challenge is of an entirely different magnitude. In addition to its massive scale, China's crackdown on corruption must be both centralized and decentralized, and should cover the huge expanse of the country, from the wealthiest metropolises to the poorest rural regions.

Like China, all major advanced nations have suffered from corruption in the course of their economic development.

In the US, corruption, patronage and nepotism have been particularly pervasive in Chicago, from the 21-year Mayor Daley era to 2012, when Illinois Governor Rod Blagojevich got a 14-year sentence for corruption. What's worse, to this day, the 2008 financial collapse has not resulted in a single prosecution of the high-level Wall Street executives who profited from the financial meltdown.

In France, former president Nicolas Sarkozy was recently placed under formal investigation over alleged influence peddling. In Italy, former prime minister Silvio Berlusconi has been charged with tax fraud and continues to struggle with other allegations. In Germany, Christian Wulff had to resign as president in 2012, facing the prospect of prosecution for allegations of corruption relating to his prior service as prime minister of Lower Saxony.

Similarly, corruption in China's State-owned enterprises is neither unique to China nor does it have to pose a threat to the economy. After all, Nordic countries, which continue to have many SOEs, rank among the least corrupt countries.

Nevertheless, some critics in the West argue that China's anti-corruption campaign could prove too costly and alienate foreign companies. In reality, corruption is corrosive for the economy, fatal for a nation's moral fiber and demoralizing for foreign companies that respect the rules of the game. Therefore, overcoming corruption challenges will only make China stronger.

In the Corruption Perceptions Index, China ranks 80th. Compared with other large emerging economies, the Chinese mainland is behind Brazil but far ahead of India, Russia and other emerging Asian economies, such as the Philippines, Thailand, Indonesia and Vietnam.

In the coming years, China's zero tolerance against corruption is likely to be reflected in the improvement of its index ranking. Indeed, China's fight against corruption inspires hope in and provides lessons for other emerging economies which are following in its footprints.

The author is research director of International Business at India China and America Institute (US) and visiting fellow at Shanghai Institutes for International Studies (China) and the EU Center (Singapore).