EDITORIAL

Fighting graft by tracking funds closely

China's anti-corruption campaign has been framed as necessary for the Communist Party's survival. It is no small irony that Deng Xiaoping's disguised capitalism that awakened a sleeping dragon is also drowning swathes of the governing and business elites in venality. Grassroot bureaucrats in villages and towns are inflicting equivalent harm as their victims who are ordinary folk will instinctively blame the government for its failure to shield them from grasping satraps.

Multiplied across the vastness of the country, the strains of sudden, unequal wealth are intolerable. To his credit and at some risk to his position, President Xi Jinping has bravely made an attack on graft one of his missions. A dragnet is tightening to catch as many corrupt officials as is possible within China's rudimentary graft policing system.

He has a way to go as the atavistic habit goes back to dynastic times of courtiers and hangers-on, when enrichment for family and self was a perk of office. The way he has been fanning out on multiple fronts to show that graft in modern China is self-defeating is having an effect.

In the same week that the British drug firm GlaxoSmithKline was fined US$490 million (S$623 million) for business corruption, the state authorities disclosed that 88 graft suspects hiding abroad had been "returned" to face justice. It is believed many more families have fled with their loot. An estimate by a US tracking group that nearly US$3 trillion of dirty money has flowed out in recent years to havens that are non-extraditable has to be treated with caution. But who will ever know, when China's banking system has "shadow" incarnations? Hong Kong is a favourite conduit for the funds, allegedly aided by conniving mainland banking regulators.

This is why the people see Mr Xi's "fox hunt" to nab those who have outfoxed the surveillance system as being crucial to his drive. It is of a piece with domestic efforts to weed out overweening bigwigs. Mr Zhou Yongkang and Bo Xilai have been prominent among these, but sub-Cabinet and provincial officials and state-enterprise bosses are also in the sights.

One difficulty he faces with catching foxes is that the favoured hideaways (the United States, Australia, Canada, Holland and Atlantic tax havens) take a dim view of China's justice system. It remains for Beijing to convince these nations that they are in the same boat fighting business graft, tax evasion and illicit money transfers.

China's agreement to share tax records with all G-20 countries is a step in the right direction. This is one worldwide web of criminality and one important edge that graft busters can gain is by working in concert.