An anticorruption drive aimed at cleansing the Communist Party has turned up an extraordinary network of smugglers, bribers and foreign currency speculators involved in billions of dollars' worth of illegal transactions, investigators have reported.
Investigators found graft running rampant throughout official Chinese life--they called it the worst in 34 years of Communist rule--and blamed the problem on foreign influences and "unhealthy tendencies" within the party.
"Lawless elements in society and a handful of degenerates in the party, government and Army committed these crimes," said an editorial accompanying the report yesterday in People's Daily. "Though few in number, they are quite capable and indeed are like termites gnawing at the edifice of socialism."
The report was based on a 16-month investigation by the party's Central Discipline Inspection Commission, which launched the crackdown as "vital" to restore the party's tarnished image and safeguard its modernization program.
Rarely has any communist state reported such sensational details about illicit activities within the ruling party.
In all, investigators uncovered 192,000 cases of "economic crimes," ranging from a petty bribery scheme involving a provincial party chief to a $2 million smuggling racket run by a Canton trading official.
The crackdown already has resulted in jail terms for 30,000 offenders, expulsion from the party of 8,500 corrupt members and the recovery of $205 million in illegal gains, the report said.
Two southern Chinese officials have been executed for their crimes, one for embezzling $300,000 from a bank, the other for taking $5,000 in bribes and contraband.
Although most official grafters reaped relatively small profits for their efforts, 7,000 culprits reportedly skimmed off $50,000 each, while another 7,000 culprits took $5,000.
Top officials in China make less than $100 a week.
The biggest illegal transactions centered on foreign currency speculation, according to the report. Officials are said to have bought and sold more than $1 billion in hard cash that is supposed to be strictly controlled and reserved for the nation's modernization drive.
Speculators who apparently pocketed the difference between purchase and sale price are said to have acquired the hard currency through factories that export their goods.
Smugglers found a foreign market for Chinese rare metals, antiques and herbal potions while illicitly importing 110,000 pornographic films and reading material for black-market sale, the report said.
According to an inventory of goods seized by Chinese customs officials, smugglers unsuccessfully tried to ship 54,000 relics, 21,000 taels of gold, 30,000 taels of silver, 500,000 antique silver coins, 31,000 pieces of jewelry and five tons of expensive herbal medicines. A tael is a Chinese measure of weight that is about one-fifth more than a troy ounce.
There was no inventory or dollar estimate of the goods that have been smuggled into and out of China.
Investigators discovered that factory bosses, in pursuit of increased sales, hired ex-convicts to bribe prospective customers. In northeast China, 76 of the corruption cases in one province were engineered by such "inveterate criminals," according to the report.
Other industrial managers withheld taxes they should have paid the state and profited by making unauthorized sales of their products, including automobiles, tin, steel, pig iron, steel, chemical fertilizer, aluminum, tungsten and timber, the report said.
People's Daily in its editorial said official graft is a "negative aspect" of China's five-year-old open-door policy, which has attracted foreign businessmen in search of contracts and malleable Chinese authorities.
But the newspaper defended the open door as necessary for China's modernization. It laid the major blame on "a handful of degenerate elements within our ranks and a number of lawless elements who inevitably utilize various kinds of loopholes to engage in economic crimes that harm socialism."
The editorial added, "If we do not firmly crack down on this type of serious criminal activity, legitimate economic work will be adversely affected, economic order will be disrupted and the policy of stimulating the domestic economy will be obstructed."