Two notes to self, about China (probably part of a running series as I try to get this stuff down for later wrangling...)
The dual name
'China' is the name of a civilization and a country. Sometimes the civilization runs the country, as now. Sometimes not, as during the time of Ghengis Khan, or incursions by the British or, later, the Japanese.
Sometimes the surface area of China the country is bigger than of China the civilization, as during the Western Han dynasty. Sometimes the civilization is bigger than the country, as during the Eastern Han, or the Wu Hu period (Best. Period. Evar. Wu hu!) Sometimes -- but rarely -- the country and the civilization line up, as during the Qin and Sui periods. Sometimes the civilization exists in more than one country, as in the Warring States period.
(There is no geographically sizable equivalent -- "European civilization" is a product of latter-day convergence, not an expansion of a single culture. Some of the caliphates, and especially Arabic culture, may be similar to the Chinese experience. I should check. Russia pretends to this duality, but Russian civilization has only ever been a fraction of the size of the Russian state. Even now, it is an empire in one country.)
China now is in a 'country larger than the civilization' period, where Inner Mongolia, Tibet, and Xinjiang Province are all regions with Chinese administration but not Han populations and norms. (Hong Kong and Taiwan are also part of this pattern, but there the fights are about how much the people who are culturally Chinese also think of themselves as being part of China the country. Self-identification is a huge generation gap; for the younger generation in both places, self-identification as Chinese-as-citizen is at an all-time low, and in conversation, they call themselves Hong Kongers or Taiwanese.)
Corruption
China, and especially rich, administrative China, makes a lot more sense if you drop the word 'corruption' and replace it with 'favoritism.' Corruption sounds like an obviously bad thing, pure negative externality. Favoritism is closer to the mark, because the government does indeed have favorites.
Favoritism also can't be "rooted out" the way we might expect corruption to be. The government needs to be able to play favorites, partly because they have a 'national champion' policy, but mostly because they need tools for keeping people from leaving.
In China, with the exception of a few favored families in Beijing, all wealth is new money -- any fortunes made have been made since Deng at the earliest, and most since the lat 1990s. And yet the rich still live in a country with an average GDP of something like $5000 per capita. As the country grows both richer and more unequal, the fortunes of a relative handful of coastal elites suddenly allow them to do something almost no Chinese have been able to do, which is get out if they want.
When I was visiting in spring, there was a big flap about 'naked officials', government employees whose families and assets are all overseas. The CCP told a one of those officials "Bring those assets back or leave." The official left.
This problem is going to get worse, not better, for the CCP in the near future. More wealth and more inequality is baked into the system -- indeed, slowing coastal growth or massive relocation from inland are both mortal threats. But much of what rich Chinese want to do with their money is not about things but services -- medical attention, schooling for their children -- and escape -- from pollution, or the capriciousness of the government. The CCP needs tools to counter those forces.
The apex of this problem right now is Jack Ma. Ma, the founder of Alibaba, is the richest man in China, and Alibaba's stock is listed on the NYSE, not on any Chinese exchange. If Ma decided tomorrow that he'd like to kick it in Gstaad instead of Hangzhou, there's not much anyone could do to stop him relocating. This is an unlikely scenario -- Ma seems as driven as Bezos -- but it is now practical in ways that it wasn't for rich mainlanders even a decade ago.
So favoritism is one of the few tools the CCP has for keeping people like Ma in the country -- if they can't find a way to tip the playing field in favor of the people they are most afraid of losing, they will start losing them.
The inside dealing among the well-connected parts of Chinese society, from red envelopes of cash for officials all the way up to the Great Firewall as a trade barrier to international internet companies, is like a tumor on China's spine. What everyone understands is that, left unchecked, it will grow and disable the patient. This is the part that people worried about corruption focus on -- the need to keep it from becoming endemic.
But any aggressive attempt to cut out that tumor altogether also risks disabling the patient. People who get rich in the US tend to stay, because right now, the US is a very nice place to be rich. (Too nice a place, says I, but that's a whole nother.) China, by contrast, is not such a great place to be rich all on it's own. The government needs some favoritism to compensate. And so the strategy is not an all-out war on corruption (no matter what Xi says about tigers and flies), the strategy is rebalancing favoritism to work where it's needed while reducing or removing it where it's not.
