The Chinese Communist party’s top graft inspector plans to expand its anti-corruption campaign overseas by embedding officers in countries participating in China’s Belt and Road Initiative.
The ambitious $1tn project, stretching from the South Pacific to the fringes of Europe and Latin America, is seeking to build bridges, ports and roads through some of the world’s poorest countries and has already been flagged as a potential hotbed of local and Chinese corruption.
Several public incidents, such as the US arrest and conviction of Belt and Road advocate Patrick Ho, have been viewed as setbacks for the global profile of the programme.
Until now, the Communist party’s graft buster, the Central Commission for Discipline Inspection, has had limited involvement in Belt and Road projects. Since 2013, it has focused on an aggressive domestic anti-corruption campaign, a signature policy of President Xi Jinping that has purged members of the country’s top leadership as well as tens of thousands of low-level bureaucrats.
But the scale of BRI is pushing the corruption watchdog to expand its presence internationally to monitor the activity of Chinese companies, CCDI’s head of international operations told the FT.
CCDI launched a pilot programme in the south-east Asian nation of Laos in late 2017 to oversee a railway project being built by a state-owned company. CCDI embedded its inspectors in the project, allowing them to work alongside the company. It has also set up a joint inspection team with its Laotian counterpart.
It plans to expand those operations by embedding inspectors in other large projects across the region.
“We are trying to gather these practices into a standard format and copy it for other mega projects to follow suit,” said La Yifan, director-general for international co-operation at the CCDI. “So many countries have shown interest to follow suit, including the Philippines and other neighbouring countries.”
CCDI has been active in seeking to repatriate Chinese fugitives that have fled overseas. Last year it wanted Chinese citizens living abroad to give themselves up to avoid harsher penalties.
Plans to expand CCDI’s reach across Belt and Road countries is an extension of China’s domestic anti-corruption campaign, Mr La said.
“How can you strike hard on corruption here at home and give a free hand to Chinese people and business groups [that are] reckless abroad,” Mr La said. “Part of the campaign is to go after corruption and stolen assets abroad.”
Experts have warned that the flood of Chinese investment into countries across Africa, Central Asia and Latin America, where corruption is rife, runs the risk of suffering big losses connected to fraud and graft.
“In many of the 80-plus countries that the BRI aims to connect, corruption is endemic,” Jonathan Hillman, a senior fellow at Washington DC-based think-tank the Center for Strategic and International Studies, wrote in an editorial earlier this year. “Among participating economies, the median credit rating is junk, so alternative lenders stay away.”
The conviction in a New York court of Patrick Ho, the former Hong Kong home secretary who headed the think-tank arm of Chinese conglomerate CEFC, has drawn attention to Belt and Road corruption.
Ho, a top proponent of Belt and Road activity, was convicted of international money laundering, conspiracy and violations of the Foreign Corrupt Practices Act last year and sentenced to three years in prison in March. The conviction ties back to his attempted dealmaking activity across Africa and the Middle East.
When arrested, Ho was on his way to attend a conference focused on BRI.
CCDI’s Mr La said China had launched a series of seminars with more than 30 countries to help link up anti-corruption regulators. “That is my dream, that we create a network of law enforcement of all these Belt and Road countries,” he said. “We are starting this network to exchange views on that.”