China’s subtle corruption

I spent Saturday in Laibin, a dusty outpost of about 200,000 inhabitants in China’s southern province of Guangxi. Laibin is as close as China gets to the Wild West. Rough-necked workers in hard hats roam the streets. Shops sell cheap food, beer, and cigarettes – and not much more. A few stray water buffalo wander the streets.

I had traveled to Laibin to learn about China’s insatiable demand for energy. Power generation is the town’s main industry. Its two enormous coal-fired plants pump electricity into the Chinese grid.

But what I got instead was a lesson in the widespread yet subtle corruption that plagues China’s rural areas. A mid-level bureaucrat in Laibin’s local government invited me and small handful of other journalists to tour her just-purchased home shown in the pictures here. 

The home of our proud host, who asked that her name not be revealed, was in a new gated and guarded subdivision. Only government employees are allowed to purchase in the development. As we pulled up to the gate, all that was visible was row upon row of beautiful, three story town homes. The homes are nice, even by American standards, but they looked out of place amongst the poverty of Laibin.

The cost of the homes are substantially subsidized by the government. Our host bought her home for about half price. She paid 180,000RMB (about $23,000) for a home with a market value of 300,000RMB (about $38,000). After owning the home for eight years, she can sell it on the open market, with the potential to reap a profit that, by Chinese standards, could make her quite wealthy.

There are two ways to look at this kind of government activity. It could be characterized as a nice way to help a public servant who earns a salary of around $250 a month (plus that of her bureaucrat husband). Or it could be characterized as a way for the communist party to buy off civil servants. Surrounded by extreme poverty on the grimy streets of Laibin, the latter looked a whole lot more likely than the former. MORE PHOTOS AFTER THE JUMP.