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Asia Unbound

CFR experts give their take on the cutting-edge issues emerging in Asia today.

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Showing posts for "Corruption"

A Chill, Ill Wind Blows Across China

by Elizabeth C. Economy
Pan Shiyi, chairman of SOHO China, attends a session at the Boao Forum for Asia (BFA) annual conference in Boao town, Hainan province on April 8, 2013 (Tyrone Siu/Courtesy Reuters). Pan Shiyi, chairman of SOHO China, attends a session at the Boao Forum for Asia (BFA) annual conference in Boao town, Hainan province on April 8, 2013 (Tyrone Siu/Courtesy Reuters).

I have to give Beijing credit. When the Chinese leaders put Wang Qishan in charge of the anti-corruption effort, they knew what they were doing. Widely believed to be one of the most competent of the new leadership, he has ensured that no policy arena has as much energy behind it as his anti-corruption campaign. Other priorities such as building a social welfare net, protecting the environment, and reforming the economy are still in the familiar planning and blueprint stages. Wang, in contrast, has spearheaded campaigns against multinationals, Chinese companies, individual Chinese officials, and businesspeople. Scarcely a week goes by when one corruption case or another does not make Chinese headlines. Read more »

Friday Asia Update: Top Five Stories for the Week of August 30, 2013

by Guest Blogger for Elizabeth C. Economy
The JP Morgan sign is pictured at its Beijing office, in this picture taken December 13, 2010. A federal bribery investigation into whether JPMorgan Chase & Co. hired the children of key Chinese officials to help it win business is just the latest in a series of legal and regulatory headaches. (Jason Lee/Courtesy Reuters) The JP Morgan sign is pictured at its Beijing office, in this picture taken December 13, 2010. A federal bribery investigation into whether JPMorgan Chase & Co. hired the children of key Chinese officials to help it win business is just the latest in a series of legal and regulatory headaches. (Jason Lee/Courtesy Reuters)

Will Piekos and Sharone Tobias look at the top stories in Asia this week.

1. The SEC probes JPMorgan amid allegations that it hired Chinese princelings. The U.S. Justice Department and Securities and Exchange Commission (SEC) has begun an investigation into whether JPMorgan Chase hired the children of senior Chinese officials to help secure business in a now-defunct program called “Sons and Daughters.” The scrutiny began in Hong Kong and now has spread through the bank’s Asia offices; the bank has flagged more than 200 hires for review. JPMorgan has not yet been accused of any illegal acts, but they might have violated the U.S. Foreign Corrupt Practices Act, which forbids granting personal favors to government officials in exchange for business. One example included the son of Tang Shuangning, chairman of a state-run financial conglomerate, who was hired and retained even after other employees questioned his financial expertise. Read more »

Friday Asia Update: Top Five Stories for the Week of August 23, 2013

by Guest Blogger for Elizabeth C. Economy
Disgraced Chinese politician Bo Xilai stands trial inside the court in Jinan, Shandong province, on August 22, 2013. (Jinan Intermediate People's Court/Courtesy Reuters) Disgraced Chinese politician Bo Xilai stands trial inside the court in Jinan, Shandong province, on August 22, 2013. (Jinan Intermediate People's Court/Courtesy Reuters)

Will Piekos and Sharone Tobias look at the top stories in Asia this week.

1. Bo Xilai defiant in trial. Standing trial on charges of bribery, embezzlement, and abuse of power, former Communist Party official Bo Xilai was surprisingly defiant during his two days in court. The trial, which began on Thursday, was expected to be simply another piece of scripted Chinese political theater—albeit one with much more press and its own official microblog—but Bo put on a spirited defense, refuting testimony and casting doubt on his wife’s mental state. Some analysts have postulated that Bo might have agreed to a predetermined prison sentence in exchange for the opportunity to express himself at the trial. Read more »

Knowing Autumn From a Falling Leaf: The GSK Probe and China’s Business Environment

by Yanzhong Huang
A flag (L) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in Shanghai on July 12, 2013. A flag (L) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in Shanghai on July 12, 2013. (Aly Song/Courtesy Reuters)

There is a Chinese saying, Yi Ye Zhi Qiu, which means “Knowing that autumn is coming by seeing a single leaf fall.” This expression is fully applicable to the current business environment for foreign pharmaceutical firms in China.  Indeed, the recent investigation of pharmaceutical giant GlaxoSmithKline’s involvement in commercial bribery in China should send a chilly signal to all multinational pharmaceuticals aspiring to make big money in the China market: the go-go years are over. Read more »

Friday Asia Update: Top Five Stories for the Week of July 19, 2013

by Guest Blogger for Elizabeth C. Economy
A view from on board North Korean flagged ship "Chong Chon Gang" docked at the Manzanillo Container Terminal in Colon City on July 16, 2013. Panama detained the North Korean-flagged ship from Cuba as it headed to the Panama Canal and said it was hiding weapons in brown sugar containers, sparking a standoff in which the ship's captain attempted to commit suicide. (Carlos Jasso/Courtesy Reuters) A view from on board North Korean flagged ship "Chong Chon Gang" docked at the Manzanillo Container Terminal in Colon City on July 16, 2013. (Carlos Jasso/Courtesy Reuters)

Sharone Tobias and Will Piekos look at the top five stories in Asia this week.

1. China’s economy slows in the second quarter. China’s economic growth slowed to 7.5 percent in the second quarter of 2013, the second straight quarter of declining growth. Chinese officials encouraged local governments to speed up spending to support economic growth, though they have asserted that China’s main economic indicators were within a “reasonable range.” The International Monetary Fund is less confident, stating that “since the global crisis, a mix of investment, credit, and fiscal stimulus has underpinned [Chinese economic] activity. This pattern of growth is not sustainable and is raising vulnerability.” Read more »

China’s Anti-Corruption Campaign: Old Wine in an Old Bottle

by Elizabeth C. Economy
Wang Qishan, now China's anti-corruption chief, attends a plenary meeting of the National People's Congress at the Great Hall of the People in Beijing on March 8, 2012. Wang Qishan, now China's anti-corruption chief, attends a plenary meeting of the National People's Congress at the Great Hall of the People in Beijing on March 8, 2012. (Jason Lee/Courtesy Reuters)

Chinese leaders appear to have decided that the risk of a long slow death by “corruption cancer” is preferable to undergoing a high-risk operation of real political reform. The recent arrest of another batch of Chinese anti-corruption campaigners begs the question of how seriously Chinese leaders want to address the admittedly life-threatening corruption problem.  Former Chinese president Hu Jintao and his successor Xi Jinping made headlines last November by declaring that if the Communist Party failed to address corruption, it could lead to the death of not only the Party but also the Chinese state. To demonstrate the seriousness of the problem, Xi Jinping even appointed one of the Party’s most capable officials, Wang Qishan, to lead the anti-corruption effort. Read more »

Responding to Disease Outbreaks: Is China’s Move Toward Greater Transparency Irreversible?

by Yanzhong Huang
Passengers walk past temperature detectors. Passengers walk past temperature detectors. (Stringer Taiwan/Courtesy Reuters)

Yesterday, I testified before the Congressional-Executive Commission on China (CECC) at the  “Food and Drug Safety, Public Health, and the Environment in China” hearing. My testimony focused on China’s response to public health emergencies. As the H7N9 virus appears to be burning itself out, the consensus among public health scholars and practitioners is that China has been much more transparent and open in handing this outbreak than it was in 2003 during the SARS epidemic. In fact, WHO Director-General Margaret Chan thanked China for their speed in sharing relevant information. Read more »

Prescriptions for Democracy Assistance

by Joshua Kurlantzick
Indonesia's President Susilo Bambang Yudhoyono speaks in front of parliament members in Jakarta August 16, 2012. Indonesia's President Susilo Bambang Yudhoyono speaks in front of parliament members in Jakarta August 16, 2012. (Beawiharta/Courtesy Reuters)

At the National Endowment for Democracy this Monday, I met with a large group of democracy promotion specialists from all over the world. They offered valuable insights about how their work was affected by the weakness of democracy in many developing nations, by the pushback against democracy promotion by several major autocratic powers, and by the growing influence of money in politics in nascent democracies, where opportunities for vote-buying and graft actually seem to increase as compared to the period of authoritarian rule. Following the meeting, NED blogger Michael Allen posted several of my prescriptions for reforming democracy assistance. You can read them here.

Xi Jinping’s Three Easy Steps to a Clean China

by Elizabeth C. Economy
China's newly appointed leader Xi Jinping attends a meeting with foreign experts at the Great Hall of the People in Beijing on December 5, 2012. China's newly appointed leader Xi Jinping attends a meeting with foreign experts at the Great Hall of the People in Beijing on December 5, 2012. (Ed Jones/Courtesy Reuters)

Xi Jinping has one over-riding political mandate: clean up corruption or clear out. Corruption and its manifestations are at the heart of the Party’s greatest challenges: its glaring lack of legitimacy; one hundred eighty thousand mass demonstrations annually by most recent count; and an outflow of money through corruption, crime, and tax evasion as high as $3.72 trillion over the past decade. Is Xi up to the task? Read more »

Gu Kailai Trial: Drama Ended?

by Yanzhong Huang
Gu Kailai, wife of ousted Chinese Communist Party Politburo member Bo Xilai, attends a trial in the court room at Hefei Intermediate People's Court in this still image taken from video Gu Kailai, wife of ousted Chinese Communist Party Politburo member Bo Xilai, attends a trial in the court room at Hefei Intermediate People's Court in this still image taken from video on August 20, 2012. (Courtesy Reuters)

The murder trial of Bo Xilai’s wife Gu Kailai ended with a local Chinese court delivering a suspended death sentence for her killing of a British citizen Neil Heywood. While Gu only received a two-year reprieve for the execution, anybody with some knowledge of the operation of the Chinese officialdom knows that this is tantamount to life in prison. Provided “good behavior” during her imprisonment, Gu could be released after serving fewer than a dozen years. Gu was apparently satisfied with the verdict. It is ironic, of course, that she demonstrated no respect for the law by taking another person’s life, but is now praising the court for showing “immense respect for the law, reality and life.” Read more »