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Learning the art of greasing the wheels

Sydney Morning Herald

Tuesday February 1, 2011

JOHN GARNAUT THE EAST IS RED

The art of building "guanxi" and the rituals of giving and soliciting bribes are not always the same thing in China, but they often are.One reason Rio Tinto's Stern Hu is in jail is because he was no good at it. Only an amateur would receive a bag of cash and store it in his household safe.The wheels of Chinese business and officialdom are usually greased by more experienced players. They know how to embed their favours within intricate, personalised guanxi performances, which break down the barriers to bribery, and also minimise the risks of being caught. They channel transactions through multiple layers and stretch them out over years.Hu Gang, who ran an auction house in Changsha, is such a professional. He has written two unmatched exposes, or instruction manuals, on how to do it.But even professionals can run into trouble. Hu prefers not to talk explicitly about how exactly he bribed a judge who later gave him up in a confession in an unrelated investigation.Hu has never talked to a foreign journalist before. But he does say his first book Qingci (or Celadon, written under the pseudonym Fushi), a story about an auctioneer who bribes a judge, is uncannily similar to the events that led to him spending a year in jail.Hu's auctioneer-protagonist, Zhang, makes the acquaintance of Judge Hou after learning of his drinking habit. He lugged a case of health-preserving liquor (containing an exotic aphrodisiac and bottled in fine porcelain) up six flights of stairs to the judge's apartment.After demonstrating his personal exertion, auctioneer Zhang explained the liquor was a gift from another friend, which he did not want because he did not drink. He said it had a value that was great but also deniable because it had not yet been placed on the market.Zhang cemented the relationship when he noticed Judge Hou's concern about his son's calligraphy and quietly arranged a famous calligrapher to be his tutor.He discretely auctioned the son's calligraphy at a friend's auction house and instructed his friend to bid for it. Zhang handed a cash envelope to the judge and reassured him he had even subtracted an auction commission."It can stand any investigation," he said. It was only then, after Judge Hou was squarely in his debt and had been assured of Zhang's sensitivity and discretion, that the auctioneer broached the favour that he wanted.Li Ling, a law lecturer at Northwest University in Xian and researcher at New York University, has broken new ground by mapping for her PhD how guanxi and corruption works in China. She has investigated dozens of first-person accounts (including Hu Gang's) and hundreds of court cases. "As experienced guanxi-practitioners often say: 'The thing is half done once the gift is accepted'," writes Li in the article "Performing Bribery in China", in the current edition of the Journal of Contemporary China.Gifts need to demonstrate personalised care and "sincerity" and this usually requires careful investigation of the target's golfing, artistic, gambling or extra-marital hobbies. So China's art auctions are hugely inflated by bribers paying officials for art works at multiples of the market price, its luxury golf courses are full of members who did not pay for membership, shopping centres are full of official's relatives using shopping cards that were gifted to them and Macau is full of officials who do not pay for their gambling chips.Choice of language is important, with a whole lexicon of euphemisms such as "doing guanxi" available in place of vulgar words such as "bribe". Li writes that the art of guanxi can function as an "alternative operating mechanism" to break down the legal, moral and cognitive barriers to corrupt transactions. "Guanxi-practise is not only fuelling corruption, but it is a necessary and integral part of corruption in China," she writes.Hu Gang, the auctioneer-turned author, agrees that not all transactions involve bribery, even in his auction trade. He says commissions can be won by your good reputation in the industry, or paying a lot to a person you don't know, or making a long emotional investment in a judge.

© 2011 Sydney Morning Herald

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