As of October 2021, Communist Party of China (CPC) disciplinary authorities had filed 4.078 million corruption cases involving 4.379 million officials since the 18th National Congress in 2012. Among them, 484 were investigated, resulting in disciplinary and administrative punishments for 3.998 million individuals. In 2023, a record 54 high-ranking officials were detained, the highest number since 2012, according to data from the CPC Central Commission for Discipline Inspection (CCDI).
As such measures intensify, direct money transfers have become less common, giving rise to new forms of corruption, such as payments delayed until after an official’s retirement or the enlisting of proxies.
On June 3, the CCDI and the National Commission for Supervision published an article highlighting that some officials arrange for a proxy, or a third party to hold or manage the bribed property. By delaying transactions, this tactic helps each party conceal their intended purposes and evade detection.
In 2023, authorities in Laixi, Shandong Province investigated a typical case involving a proxy. From 2015 to 2016, Lu Min, then chairman of State-owned Qingdao City Investment Financial Holding Group, assisted a businessman surnamed Wang to establish and run a private fund management company. Wang transferred 15 percent of the company’s equity to Lu.
Between 2016 and 2023, Lu received dividends totaling 4.35 million yuan (US$598,900). Lu instructed Wang to reinvest the dividends into multiple fund projects for higher returns. Lu was expelled from the CPC in August 2023 and faced legal prosecution.
Another prevalent method involves proxy-held real estate. From October 2016 to March 2020, the majority shareholder of a private financing guarantee company in Anhui Province spent 20.46 million yuan (US$2.82m) on three homes for Gu Ping, then chairman of Anhui Huaiyuan Agricultural Commercial Bank, a rural cooperative enterprise. To obscure ownership, Gu registered the properties under the names of three relatives, with holding agreements retained by the briber.
Cash bribes are also managed through proxies. From 2019 to 2020, Yuan Hongfei, former Party secretary and chairman of State-owned Jiangsu Yangtze Estuary Development Group, facilitated four trade ffnancing transactions with an intermediary surnamed Lu. At Yuan’s request, Lu withheld kickbacks totaling 170 million yuan (US$23.4m) until Yuan retired. In November 2023, Yuan was sentenced to six years and three months in prison and fined 300,000 yuan (US$41,306) for bribery. “I thought that this method of having Lu keep my money would keep me safe. If I was ever investigated, I could deny receiving any bribe,” Yuan told judges.
In another case from Zhejiang Province between 2003 and 2006, Yang Chenghua, serving as Party secretary and director of Fuyang Supply and Marketing Cooperative Association, a rural cooperative in Zhejiang Province, collaborated with a real estate developer surnamed Lu to retain 280 million yuan (US$38.6m) in bribe money until Yang retired. After retiring in 2016, Yang received the full amount in three installments from Lu. In May 2023, Yang was expelled from the CPC and later sentenced to nine years and six months in prison for embezzlement and bribery.
Hu Zengrui, a director at Shanghai Xinghan Law Firm, worked as a public prosecutor on corruption cases for years. Hu told NewsChina that profiting from company shares has long been a channel for corruption. As early as July 2007, the Supreme People’s Court and the Supreme People’s Procuratorate (SPP) declared that civil servants who exploit their positions for personal gain and accept shares from bribers should also be punished for bribery.
“In recent years, under sustained high-pressure anti-corruption efforts, such cases have increased, drawing greater official scrutiny,” Hu added.
These forms of corruption without direct bribery money transactions present challenges for disciplinary inspectors. In January 2024, a provincial disciplinary inspection department staff member anonymously told the Global Times, “In non-financial fields, officials from different regions usually do not explicitly exchange power with money, but instead by facilitating the promotion of their relatives or people with close connections to higher positions. Such power swaps are an implicit form of corruption.”
He highlighted that lagging law enforcement measures complicate efforts to combat these corrupt practices, prompting the adoption of smart tools and technologies such as big data and AI to uncover crimes.
An official from Zhejiang Province’s discipline inspection and supervision department emphasized the challenge of proving implicit bribery due to the lack of written agreements between parties.
The Procuratorial Daily run by the SPP reported on a case of proxy shareholding involving Xu Mengjia, former municipal Party secretary of Ya’an, Sichuan Province. Xu accepted 800,000 yuan (US$110,149) in shares from a briber, asking his friend surnamed Liu to register them in Liu’s name. The court determined that despite Liu holding the shares, Xu maintained actual control, which constituted bribery.
Other cases involve bribery recipients failing to obtain the promised money, like an official surnamed Lin, director of a technical center in Guangdong Province. Despite promised kickbacks from three parties totaling 5.87 million yuan (US$808,200), Lin only received 500,000 yuan (US$68,844) before his arrest in July 2022, a disciplinary official in Zhejiang Province told NewsChina. Lin was sentenced to five years in prison for bribery.
Ma Ling, a director with the Huadu District Commission for Discipline Inspection in Guangzhou, Guangdong Province, said that Lin’s imminent retirement at the time weakened the bribers’ commitment to deliver the full amount.
On January 8, 2024, at the third plenary session of the 20th CCDI of the CPC, Xi Jinping, general secretary of the CPC Central Committee urged for strengthened handling of new and disguised forms of corruption. The directive focused on finance, State-owned enterprises, energy, medicine and infrastructure construction, sectors where concentrated power, capital and resources make corruption particularly prevalent. Xi emphasized combating collusion between officials and business people as the priority.
Stealthy corrupt practices, indirect connections between bribers and officials and extensive chains of interest have compounded the difficulty of evidence collection against hidden bribery. “New-type and disguised corruption” topped the CCDI’s list of 10 anti-corruption keywords for 2023.
An article titled “The Outstanding Characteristics and Punishment Countermeasures of New-type and Hidden Corruption” published on the CCDI’s website on January 17, 2024, noted the rising trend.
Corrupt officials now operate from “behind the scenes,” leveraging their position and influence to secretly assist business people. These officials usually enlist proxies like their spouses, children or associates to handle the actual transaction (referred to as “white gloves”), while they remain as unseen controllers or “shadow shareholders,” the article said.
Hu Zengrui emphasized that traditional bribery cases often involve physical items like cash, or valuable jade pieces or artwork, which are more traceable. In contrast, prosecuting “new-type” corruption cases relies more heavily on obtaining personal confessions.
Hu acknowledged that while recent crackdowns on corruption have deterred potential bribers, they have also strengthened collusion. As all parties are prosecuted, bribers are not incentivized to cooperate with authorities. “To a certain extent, this has made it more difficult for investigators working such cases,” Hu said.
During the second plenary session of the 20th CCDI of the CPC held in January 2023, CCDI organs at all levels were urged to innovate anti-corruption strategies through collaborative approaches and technology upgrades. Regional governments like Jiangsu and Shanxi provinces have launched special campaigns against hidden corruption, employing advanced AI models to screen out suspected “shadow companies.”
Mao Zhaohui, director of the Anticorruption and Integrity Policy Research Center at the Renmin University of China in Beijing, told NewsChina that addressing proxy-based corruption cases requires comprehensive measures. Apart from defining criminal charges against these new forms of corruption, Mao stressed the need to strengthen supervision during the transition process for official positions.
In these corruption cases, Mao said, trust and interests often hinge on an official’s position. As positions change, the relationship can falter, prompting officials to speed up the transfer of assets held by proxies. It is at critical times like these that auditing and supervisory authorities must increase efforts to identify loopholes in the system.
Mao has advocated stricter penalties for bribery proxies, whether they are the bribers themselves or middlemen. “In addition to pursuing legal accountability against such agents, measures such as credit score deductions or restricting their involvement in specific industries should be implemented to increase the costs of their illegal actions,” Mao said.
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