The Achilles Heel of Xi’s Reforms

BERLIN: President Xi Jinping’s attempt to set up an all-powerful body to supervise the anti-corruption fight has run into unexpected headwinds. Doubts are being raised about the vision of the rule of law Xi promises to deliver, a fundamental prerequisite of globalization for ensuring a rule-based environment of trade and investment.

The National People's Congress is set to conduct final review and pass China’s National Supervision Law for institutionalizing Xi’s anti-corruption campaign in March. A National Supervision Commission would consolidate agencies that battle corruption and could investigate any public official. Led by the Communist Party, the commission would be expected to “check the power” of all party and state bureaucracies across the country.

Pervasive corruption in China is rooted in the party’s monopoly on power, which has tarnished the party’s avowals to “build good governance” and “establish a free market.” Corruption not only stirs social unrest, but also contributes to unfair conditions of market access that can hamper success of both Chinese and western companies, spawning serious misgivings about trade and investment prospects in China. To restore government legitimacy, the party pledges to combat misuse of power and create a rule-of-law state via its anti-corruption campaign.

The party has branded this campaign as Xi’s biggest political achievement since 2012: He vowed to mobilize the party’s “self-regenerating mechanism” to “eradicate corruption” by cracking down on “both tigers and flies,” that is, high officials and civil servants alike. Notably, Xi even broke the party’s entrenched tacit rule of de facto immunity for the party’s Politburo Standing Committee by imprisoning Zhou Yongkang, China’s former security tsar.

The anti-corruption campaign also affects foreign companies in China – some once turned a blind eye to bribery. For example, investigations into transnational pharmaceutical giants hit GlaxoSmithKline and the company headquartered in Britain was fined ¥3 billion for bribing officials. This sends the message that Xi is determined to stem abuse of power even when foreign investors are involved, whereas his predecessors often tolerated corruption in order to attract foreign investment.

While many in China welcome the attempt to weed out rampant corruption, the legitimacy of Xi’s campaign is generally criticized for its lack of genuine “checks and balances” on power. The campaign is a political movement carried out by party organs and directed against party cadres beyond the existing legal framework. Often denounced as “selective,” the campaign is infamously associated with political struggles in the top leadership. Numerous high-ranking cadres and generals targeted by the campaign had been viewed as “disobedient” and “impious” to Xi before being “purged” under the cloak of anti-corruption.

But party-state think tanks hail the National Supervision Law as proof of the Communist Party’s self-asserted aspiration to “limit state power” and “establish the rule of law.” Indeed, “rule of law” is one of Xi’s favorite governance mantras. In his 200-minute-long speech at the 19th Party Congress in October, Xi referred to “law” 137 times. In particular, he stressed the importance of developing laws to rein in communist officials and “lock power up in a cage.”

The party will try to sell the new supervisory institution as part of China’s overall efforts to achieve more legal clarity. In March, the country introduced a new Civil Code that lays down citizens’ rights in private legal disputes. China has also made progress on a system of administrative laws to improve government accountability. However, the party’s stated goal of “governing the country by law” typically views law as an instrument to tame intractable government officials and control civil society.

On the surface, this development resembles the approach of the so-called “enlightened despot,” Frederick the Great, the ruler of Prussia in the 18th century. He initiated Germany’s evolutionary political and legal reforms and embarked on a “rule by law” project with the aim to establish “the rule of law.” Although Frederick deemed his subjects ignorant, precluding them from political participation, the laws laid the standards for the relations between citizens and the state in many modern political systems. According to these principles, the state cannot encroach upon civil rights unless the law explicitly prescribes it. Prussian courts gradually developed mechanisms of access to justice that allowed citizens to sue the government.

However, Xi’s focus on legal codification remains far from this paragon. This is especially true for the National Supervision Law. The emerging supervisory bodies and the party-led “disciplinary and inspection committees” will continue to exercise the party’s power to discipline officials through their ruthless anti-corruption campaign. The draft law itself has become embroiled in an unprecedented tide of criticism: China’s legislature – the Standing Committee of the National People’s Congress – received a remarkable number of more than 11,000 suggestions for revision within three weeks after publishing the bill.

The unusually widespread backlash against this anti-corruption bill illustrates China’s legal conundrum and sparked a debate about the law’s constitutionality. By banning lawyers from representing those under investigation, the draft law fails to subject such investigations to China’s criminal procedural law. In addition, some leading legal scholars in China warn that the new law undermines the constitution. They therefore advocate that China’s legislature establish a procedure for reviewing the law’s compatibility with China’s constitution. Citing Xi’s references to “constitutional supervision,” others propose that the national legislature set up a permanent organ for such reviews.

Yet, such proposals stand little chance of success in this one-party state. China’s Supreme People’s Court repeatedly advises courts not to apply the constitution in their judgments. It is unimaginable that the party would tolerate any progress towards an independent institution with the potential to rejuvenate China’s half-paralyzed constitution.

In a sense, the National Supervision Law displays the Communist Party’s awareness of the need to limit government power, which might help China prepare the requisite legal infrastructure for the rule of law. The advent of this law may add to the predictability of anti-corruption procedures. However, these procedures lack transparency as long as the law itself does not conform to constitutional principles that check the power of all state organs.

In the Prussian case, rule by law gradually yielded rule of law. Frederick’s legal reforms at last resulted in a constitutional monarchy. Under that system, rulers and state sovereignty were defined in terms of the core principles of modern constitutions: A head of state may be leader, but not the real governor of the country. Consequently, and crucially, law means constraints on the “leader” as much as on citizens.

In Xi’s mind, however, rule by law serves to consolidate the party’s uncontested role. “The party leads everything” – words Xi quoted from Mao – are now in the party’s charter. As a result, limiting the power of ordinary cadres takes place only because the regime aims to create leadership with limitless power, which runs counter to the party’s promise to “establish the rule of law” that  “ensures a rule-based economy” in an era of globalization. With its ubiquitous influence, the party turns into a Leviathan that haunts Chinese citizens and foreign companies and investors.

Inconsistencies between the National Supervision Law and the constitution betray the limits of Xi’s legal reforms that claim to check government power. Without any mechanism that also checks the inordinate power of these supervisory bodies, the law would simply become another tool for consolidating the party’s paramount status and do nothing to provide more legal clarity, neither for Chinese party-state officials nor for businesses that deal with them, Chinese and foreign alike.