Eye on China: Paper-shufflers give in to greed

As news travels that swine fever is spreading to humans in China's western province of Sichuan, and that avian flu is reappearing on the country's southern borders, thoughts turn to the role and nature of the Chinese bureaucracy.

The 2003 Sars epidemic showed that modern economies need skilled and honest civil servants to ensure that problems do not explode out of control.

China's reaction to Sars was not reassuring and continued shortcomings since then are coming under the increasingly sceptical examination of its citizens.

Recent media stories have drawn attention to several areas of Government failure: the high death toll in the mining industry; education and healthcare extortion; and police failures.

One mainland newspaper editorial writer noted that in all these areas deficiencies could be traced back to the bureaucrats' failure to enforce the laws they were responsible for.

Legislation in the West was often the key first step to enforcement, but the same could not be said for China, he wrote.

Indeed, the country has a huge amount of newly written legislation that is never enforced.

Recent mining disasters, for example, were discovered to have been caused by safety rules not being implemented.

The reason was that many of the mine-owners offered stakes in their businesses to law enforcement agencies, thereby ensuring their co-operation.

Healthcare and education are also areas where state hospitals and schools extort money from patients and students in the form of extra "fees" - such as payments for air-conditioning - despite the fact that urban residents are protected by health insurance and are entitled to free schooling.

It is important for investors going to China to realise that the bureaucracy is not a series of competent, reasonably honest, "enabling organisations" that permit a modern economy to function smoothly.

Western bureaucrats are generally recognised to have forfeited a large salary and a flashy lifestyle in favour of job security and a decent, guaranteed pension after retirement.

How different to the Chinese bureaucracy.

The world's oldest body of civil servants sees itself as an elite group that, thanks to close links to the ruling Communist Party, rules the country.

The bureaucracy is a ruling caste - a thousand miles away from accepting the relatively humble role of allowing other people, such as those in the private sector, to get on with the task of wealth and job creation.

The importance of the bureaucracy has been clouded by the rush of young Chinese graduates going abroad, and the vanity of Western multinationals in seeing themselves as the employers of choice for the country's top graduates.

Once jobs have been secured in the top blue-chip companies, doubts can set in fast, with a crushing workload, menial duties and fierce competition taking their toll.

"One of my university contemporaries is working with a domestic regulator, and he's making a lot of money," a friend told me recently.

The money does not just come in the form of extravagant perks (which complement a meagre salary), but also from the numerous possibilities of acting as the gatekeeper between businessmen and the market.

Thus, after a few years, my friend's university contemporary will receive a free, new flat, while at the same time having many opportunities to be buttered up by cash-rich businessmen looking to obtain the crucial licence for whatever business they hope to be engaged in.

For the civil service, laws are essentially a powerful form of leverage over the genuine wealth creators. The opportunities for the bureaucrats lie in the huge discretion they have in enforcing the rules.

But the Chinese are getting tired of this arrogant, unelected elite. One of the targets they have picked on recently is the Beijing police.

This deeply sunburned and hugely lethargic presence can often be seen berating a miserable peasant pedalling a three-wheeler, while a huge SUV with Government plates does an illegal u-turn right under their very noses.

A recent case that has enraged Beijing is that of a vegetable peddler who had to pay a 10,000 yuan fine (equivalent to his yearly income) after he took the vehicle for its annual check-up.

He had ignored a traffic sign on his way from work dozens of times, racking up huge fines in the process.

But the traffic police had not bothered to inform him after the first incident, simply handing him a huge bill when the time was right.

In fact, to save police the trouble, the presentation and collection of fines is "outsourced" to garages, which read off the information from police computers and inform the drivers who come in for yearly warrants of fitness.

Drivers can only pass the check once they pay their outstanding fines.

This sort of contempt and laziness is costing the Government dearly in terms of support from the population.

The increasingly wealthy and self-confident members of the urban middle-class are no longer willing to put up with lazy, incompetent police or other civil servants.

It will be a bitter struggle. Chinese bureaucrats are unlikely to easily give up the prestige and powers they have built up over thousands of years. But to avoid many potential disasters, it is important that they do.

* The writer remains anonymous to protect his position in China.