China Backs Off Anti-Corruption and Reform Campaigns

CHINA'S campaigns against corruption and economic disarray, aimed at wiping out two major threats to Communist Party control, are losing steam.

Political infighting and resistance from independent-minded regional officials, influential party members, and wealthy entrepreneurs appear to be slowing the crusades that Communist officials launched on a war-footing only a few months ago.

In late June, Vice Premier Zhu Rongji, China's economic czar who has staked his political future on cooling off the economy without dampening the economic boom, announced a 16-point austerity program aimed at slashing inflation and curbing speculation on real estate and stock markets.

But of late, officials have relaxed restrictions on credit and eased strident rhetoric targeting provincial and local officials who have been forced to put major projects on hold. Lines of credit were reopened for major infrastructure and energy projects and for manufacturers reeling under the squeeze on funds.

This week, Chinese officials of the State Statistical Bureau insisted they are winning the economic battle by trimming inflation and cooling rampant lending. But Western observers say that economic growth has slowed only slightly and worry that Beijing's softer approach could reignite provincial and local speculation.

The situation reflects what happened when General Secretary Jiang Zemin inaugurated the anticorruption campaign in August as an ``urgent struggle'' for party survival and the continuation of economic reforms.

While anticorruption campaigns have been a frequent, if unsuccessful, theme in Chinese history, what sets this one apart is the magnitude and pervasiveness of the graft, Western observers say. ``Corruption is seen as a life-and-death issue for the party and the extent of it today is being compared to the last days of the Kuomintang,'' says a Western diplomat referring to Chinese Nationalists who were overthrown by the Communists in 1949 and fled to Taiwan.

Defense Minister Chi Haotian traces corruption's influence in China: ``How was the Qing [dynasty] government toppled? How did the Kuomintang collapse? It was all caused by corruption.''

In the last two months, the government has dispatched investigation teams to ferret out guandao or official profiteering and launched a lurid drive to showcase corrupt officials. In August, model worker Yu Zuomin, head of what had been trumpeted as China's richest village, was sentenced to 20 years in prison in connection with a 1992 murder and its coverup. In September, eight accountants and bankers were executed in some of the largest cases of public embezzlement in more than four decades.

But with a party plenary meeting on the economy and corruption expected before the end of the year, the anticorruption drive poses the dilemma of deflecting public resentment by singling out a few high-rolling officials without indicting the entire regime and provoking a political crisis.

As market-style reforms have loosened the grip the party had on Chinese life under the command economy, officials worry that the anticorruption drive could spin out of their control.

People's Daily, the party mouthpiece, recently suggested that ``corruption is inevitable'' and that overzealouness could dampen reforms. ``Since the concrete steps and measures of reform and opening up cannot be expected to always be perfect ... loopholes and weak points are inevitable,'' a commentary in the paper stated. ``Thus corruption is hard to avoid.''