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Chinese efforts to clean up the economy have claimed more victims. This week, two high-ranking officials of the State Power Corporation were arrested for taking bribes; more arrests are expected. They are the latest offenders caught in the campaign to root out corruption. The program is absolutely necessary if China is to modernize its economy, but it also carries high risks for the Chinese Communist Party. That tension guarantees that the anticorruption drive will be controversial and inconsistent.

China’s transition to a social market economy has not been pretty. Since former supreme leader Deng Xiaoping declared that “to get rich is glorious” and gave the green light to China’s particular form of capitalism, Communist Party officials have aggressively exploited the new order, using their influence and authority to claim a share of the newly privatized assets and funds. The government admitted that state funds amounting to $14 billion, or about one-fifth of annual central government revenues, were misused in the first half of 1999. It is estimated that nearly $30 billion in goods are smuggled into China annually, and the lost taxes and tariffs reach 8 percent of GDP.

China began a crackdown — at least in name — in 1999, as the country prepared for the 50th anniversary of the founding of the CCP. It soon became clear that the problems reached the upper levels of the party and the credibility and ultimately the effectiveness of any anticorruption drive would depend on nabbing high-profile culprits.

The campaign seems to be serious. During the first eight months of last year, over 23,000 criminal prosecutions for corruption were filed. The number of reported cases of corruption has been increasing by 9 percent annually; the number of officials under investigation is increasing 12 percent each year.

Last year, the deputy head of the legislature was executed for corruption, and more than a dozen party officials in the south were given death sentences in public trials. In November, the justice minister was dismissed for economic wrongdoing, and is under investigation.

Earlier this week, Mr. Cha Keming, former deputy minister of power and vice general manager of the State Power Corporation, and Mr. Tan Aixing, another top official at SPC, were arrested. What makes these cases significant is that Mr. Cha is closely tied to Mr. Li Peng, chairman of the National People’s Congress and number two in the party hierarchy. The SPC was a key constituency in Mr. Li’s power base; his son is a top official in one of its subsidiaries.

The willingness to arrest individuals so close to Mr. Li — for whom, it should be noted, there is no evidence of corruption — suggests that prosecutors are not intimidated by power or connections. It also hints at the intensifying struggle to pick the next generation of party leaders, which will be ratified at the party congress in 2002, when Mr. Li, President Jiang Zemin and Prime Minister Zhu Rongji are scheduled to step down.

Clearly, the stakes are high. A serious anticorruption drive could claim high-ranking victims and have a negative impact on the party’s image. But doing nothing would be even more damaging.

China is becoming a country of vast disparities. There is an immense concentration of wealth. It is estimated that 0.1 percent of the Chinese population has one-third of the country’s private savings. The rationalization of state-owned enterprises has meant two things to most ordinary Chinese: increasing unemployment, which is now thought to have reached 10 percent of the urban workforce, and the stripping of state assets and personal enrichment by bureaucrats and their cronies. Official programs to redress income disparities among regions, such is the latest effort to develop the West, is viewed as another opportunity to loot the state.

The failure to stop the tide of corruption will do serious harm to China and its government. More foreign businesses are being deterred from investing by the perception that China’s business environment is one of the most corrupt in Asia. Corruption will add to the anger that fuels labor protests and civil unrest. It will feed social movements, such as Falun Gong, that offer an alternative to the spiritual emptiness of the communist party’s abandonment of social ideals and its embrace of capitalism without the rule of law.

Mustering the political will to fight corruption is only a start, however. The country needs a legal system that has the tools and the personnel to combat such behavior. The CCP’s control over the judiciary has impeded the development of both. It is still unclear whether the party leadership is willing to loosen its grip; if it understands the stakes, it has to.

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