Yuen Yuen AngYuen Yuen Ang is a professor of political science at the University of Michigan and a graduate of Stanford University and Colorado College. She is the author of the award-winning book “How China Escaped the Poverty Trap” (2016) and “China’s Gilded Age: The Paradox of Economic Boom and Vast Corruption” (2020). Ang is a recipient of the Theda Skocpol Prize from the American Political Science Association. Her essays and editorials appear in Project Syndicate and Foreign Affairs.

The following is an interview with Yuen Yuen Ang on her most recent book: “China’s Gilded Age: The Paradox of Economic Boom and Vast Corruption.” It has been shortened and edited for clarity.

Young China Watchers (YCW): In your book “China’s Gilded Age,” you challenge the conventional wisdom of the study of corruption, arguing that we need to pay attention not just to the quantity of corruption, but the quality of it as well. Can you explain what you mean by that and how it affects our understanding of how corrupt countries are?

Yuen Yuen Ang (YYA): This book challenges a common fallacy with our understanding of corruption, which is that we normally think of corruption as a homogenous problem that varies from a scale of 0 to 100, and that it is a problem that only poor countries have. This impression is reinforced by global corruption measures — such as the Corruption Perceptions Index (CPI), which is widely cited in the media. The CPI assigns one corruption score to each country, and every year when the CPI is released, everyone fixates on China’s score and whether China has fallen or risen in the ranks. Frankly, most people treat the index like it is a thermometer, and they don’t question how CPI arrives at its scores.

This conventional understanding is misleading, because it obscures the fact that corruption is a multidimensional problem. It comes in qualitatively different types and each type has different consequences and dangers. In my book, I offer a typology of four types of corruption: petty theft, grand theft, speed money, and access money. The first three types are all illegal forms of corruption commonly found in poor countries. Petty theft is the stealing, misuse of public funds, or extortion by street-level bureaucrats. Grand theft is embezzlement by political elites, and speed money is what its name suggests — petty bribes to cut through red tape and speed things up.

“…once we pay attention to the quality of corruption, we stop asking which country is the most corrupt. Instead, we start asking which country is dominated by what type of corruption, why, and with what consequences.”

But we usually forget or overlook the fourth type of corruption, called access money. These are lavish benefits that capitalists pay to political elites to buy favors, and access money can become legalized and institutionalized, like with lobbying and Super PACs in the U.S. This form of corruption is systematically under-measured in conventional indices, and that’s why we don’t pay much attention to them. I call access money the “steroids of capitalism,” in the sense that they can spur commercial growth and encourage more business, but they also produce serious distortions and risk. In short, once we pay attention to the quality of corruption, we stop asking which country is most corrupt. Instead, we start asking which country is dominated by what type of corruption, why, and with what consequences.

Analogy drugs

YCW: But there wasn’t a way to separate out different types of corruption, so you created a new tool: the Unbundled Corruption Index (UCI). How does this index change what we know about corruption in China both on its own and relative to other countries?

YYA: The index that I’ve created helps us to systematically compare China’s quality or structure of corruption with other countries. I stress the word systematically, because in the past, in the media and sometimes in books, various assertions were made about China’s corruption. They range from statements claiming it’s as terrible as in the worst kleptocracies, to it not being as bad as, say, corruption in Russia. When we read assertions like these, the question we should ask is: How do these people know? Unless we have a basis for our claims, there is no way of telling who is right or wrong.

By creating the UCI, I systematically capture expert perceptions of corruption not as a bundled score, but in each of the four categories of corruption that I described earlier, following a set of procedures. This doesn’t mean that my measure is perfect, but it does mean that the measurement is being done in a transparent and rule-based manner. In this way, when I say that Chinese corruption is of a certain type, it is not an arbitrary assertion. We now have some basis for looking at the numbers and then comparing how China’s corruption is qualitatively different from other corrupt developing countries like India and Russia.

Take China and Russia for example: Both countries have a reputation for being corrupt. What you see when you compare their scores is that China and Russia both have high levels of access money, but the crucial difference is that in China speed money is less prevalent than in Russia. This is consistent with another chapter in the book, where I show the evolution of the structure of corruption in China over time. From the year 2000 onwards, embezzlement and petty bribery dramatically fell, but grand bribery (access money) exploded. So, when we compare China and Russia systematically, we begin to understand that it’s not just the overall perceived level of corruption that matters; It’s the differences in the structure of corruption that are more important.

YCW: You also contend that the assumption that corruption hurts economic growth is too simplistic. Why? And how has China managed to, in your words, “prosper amid corruption,” as America did in its Gilded Age?

YYA: America and China both prospered amid corruption because of two similarities. The first similarity is that growth-damaging types of corruption were brought under control. As one historian pointed out, by the time of the Progressive Era in the U.S., the most striking aspect of embezzlement is how rarely it occurred. This is also true in China, where embezzlement fell after 2000. The second similarity is that the most prevalent type of corruption is access money, meaning capitalists paying politicians to help them do more business, obtain more loans, and get more contracts on more preferential terms, rather than to do less business.

If you add up these two similarities, this is a business-friendly environment overall, but with some businesses having an advantage over others. In this sense, it’s not surprising that there will be growth. But this growth comes with speculative risk and policy distortions. That is why, in both China today and the U.S. in the last century, you see high growth alongside financial risk.

“China’s Gilded Age: The Paradox of Economic Boom and Vast Corruption”

Book cover China's Gilded Age Yuen Yuen Ang

YCW: Any discussion of corruption in China inevitably brings up Xi Jinping’s “war” against it. Plenty of ink has been spilled on this subject, ranging from vociferous praise to intense skepticism. Eight years after its launch, what do you make of this crackdown?

YYA: I’m frequently asked whether Xi Jinping’s campaign is just a political purge or a genuine effort at fighting corruption, and the answer is that it’s both. Of course, on some level — particularly at the highest level — the anti-corruption campaign provides an opportunity to root out enemies and install your own favorites. On the other hand, it’s also true that the campaign is a genuine effort at trying to control the excesses of crony capitalism. We know this just by the numbers and patterns of the anti-corruption campaign. By 2018, more than 1.5 million officials were disciplined. So, if this were just about targeting Xi’s enemies, I don’t think he feasibly has that many.

“By 2018, more than 1.5 million officials were disciplined. So, if this were just about targeting Xi’s enemies, I don’t think he feasibly has that many.”

If you look at the patterns of the number of officials who fell over time, you can see there is no discernible peak in the number of central-level officials who fell. That means over the course of six years, they were constantly being targeted, suggesting that it’s not just about enforcement but is likely driven by a number of political factors. In contrast, if you look at the number of lower-level officials who fell, there is an inverted U-shaped curve. That is consistent with the pattern of policy campaigns, where you rapidly ramp up enforcement, then slowly relax.

YCW: Going beyond the domestic mechanics and effects, does corruption in China impact Chinese foreign policy and business abroad?

YYA: Not directly. We’re not talking about corruption affecting trade policy, for instance. But I think it relates to China’s relations with the U.S. insofar as understanding corruption is central to understanding Chinese politics today.

The Party has established its legitimacy since 1978 to the extent that it has delivered rapid growth. But by 2012, it was also clear that this rapid growth brought with it a significant number of social and political problems of the sort you find in a Gilded Age. When Xi Jinping took office, two of the most important problems he sought to address were inequality and corruption, which not only went hand in hand but were also clearly inconsistent with the Party’s communist identity. That is why he made alleviating poverty and fighting corruption his two signature domestic policies.

Interestingly, if you look on the Chinese side, “America watchers” are also trying to understand the deep structural factors that shape American politics. I was struck by the fact that the book “Hillbilly Elegy” was translated into Chinese and seems to be widely read in China. It even received a book review in Xinhua, which described it as detailing how the American Dream was lost. This tells us that, even though a book like “Hillbilly Elegy” has seemingly nothing to do with U.S. foreign policy, Chinese observers — particularly policymakers — know they have to understand the domestic drivers of populism and of Trump’s rise in order to deal with the U.S. Similarly, American policymakers have to understand the populist pressures that are driving the current Chinese leadership.

YCW: Why did you decide to use America as a comparative case? From your own experience, how does a comparative perspective help in terms of watching (and understanding) China?

YYA: Watching China as an isolated case is limiting and misleading, and a good example is corruption. If you look at the existing commentary on Chinese corruption, you often find statements like, “China has a terrible corruption problem, it’s going to collapse” and so forth. But what these statements don’t tell you is: What happens if you compare China’s corruption to India’s? Or to Russia’s and America’s? How bad is it? How different is it? Without a comparative perspective, we actually can’t understand China properly.

“When I was reading stories about America’s Gilded Age, I noticed that if I replaced the American names with Chinese ones, the stories fit just as well today.”

It’s particularly useful to see that China today is experiencing a Gilded Age just like the U.S. did during the 19th century. When I was reading stories about America’s Gilded Age, I noticed that if I replaced the American names with Chinese ones, the stories fit just as well today. That’s not to say that the two nations are identical; obviously, one is a democracy and the other is a dictatorship.

Still, a comparison challenges the assumption that China and the U.S. are polar opposites with nothing in common. It’s popular to invoke the term “clash of civilizations,” and paint the two superpowers in cultural stereotypes. One of these is that Chinese love to think long-term, in hundreds of years, whereas Americans think short-term, in four-year increments. But in reality, myopia is a common feature of local Chinese politics, and conversely, American leaders do care about their legacy and place in history.

Casting the two nations as cultural opposites is unhelpful, even dangerous. It induces Americans to perceive the Chinese as alien and threatening, and vice versa. People should be reminded of our commonalities. We should also revisit our own histories. Americans sometimes forget or are not aware that the U.S. had rampant corruption when it was a developing country.

YCW: Absolutely! Your use of America as a comparative case is really helpful in humanizing China, especially to American readers, because it makes us reflect on the role of corruption in building the U.S.

Lastly, what are your recommendations for further reading / listening / watching on this topic or China in general?

YYA: Two documentaries, both by the Chinese director Zhou Hao, which show what it’s like to be a local bureaucrat in China. What I like about his work is that by the end of the documentary, you are not sure whether the characters (a county party secretary and a mayor respectively) are powerful or pitiful. He humanizes the characters simply by following them around and showing all sides of them.
1. “The Transition Period” 《书记》
2. “The Chinese Mayor” 《大同》

— Interview by Joshua Cartwright

Voices on China – Yuen Yuen Ang, Professor of Political Science at the University of Michigan
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