Some alternate uses for the $160 billion corrupt Chinese officials may pilfer from the state each year

March 21, 2013
March 21, 2013

Chinese bureaucrats dipping into public coffers to treat themselves to extravagancies such as bottles of expensive “bai jiu” liquor and sharks’ fin soup costs the nation $160 billion a year, according to a study by Communist Party magazine the People’s Tribune.

That money would probably be difficult to claw back. China’s new leader Xi Jinping has vowed to fight official corruption. Then again, practically every Chinese leader before him has made the same promise.

And calculations of the annual cost of official graft do vary. Some government surveys have pegged it as low as $35 billion, while other estimates run to $200 billion.

Still, if the Beijing government ever manages to stop bureaucratic pilfering, here are a few things China could spend that alleged $160 billion on annually.

Build, run and equip rural schools. It costs roughly 3.5 million yuan ($554,000) to build and run a typical 800 pupil middle school in rural China for a year, according to estimates provided by Ernest So, executive board member of Hong Kong-based charity Au Kim Hung (website in Chinese), which funds education in the Chinese countryside. The building cost is around one million yuan and the rest covers a one-off purchase of desks and a years’ worth of books, kids’ lunches and teachers’ salaries.

China spends heavily on new infrastructure but not on education. Its cash is directed to building massive new roads and railways because such large-scale investment projects provide lots of jobs quickly and create the high GDP growth the Beijing government craves.  The links between education spending and economic growth are not quite so tangible.

And countryside schools get less of the nation’s education dollars than urban centers. Last year, around 3,000 elementary school children in China’s Hubei province had to provide their own desks and haul them to class after the local government neglected to provide the equipment.

Meanwhile, heavy migration from China’s countryside to cities has prompted policymakers to prioritize urban schools, but at the expense of kids who stay in rural areas.

Raise health spending 137%. The Chinese government directly spent $116 billion on health care in 2011. Adding $160 billion to that total would raise state spending on healthcare by a huge 137%. And the Chinese public really could do with better free medical care. The nation has an aging population and its economic growth has led to a rise in first world ailments such as obesity, hypertension and diabetes. But people are generally left to fund their own medical bills. Buying treatment for a major health condition such as cancer can bankrupt a regular working class family, as this World Health Organization report details.

Increase pension spending by almost double.  China’s retirement provision is not entirely stingy. The nation spent 1.28 trillion yuan ($210 billion) on retirement benefits in 2011. The average pensioner in Beijing gets about $320 a month, which is half the average wage. But there would be nothing wrong with giving retirees more. That would help them pay for health care, for example, where they get very little assistance (see above).

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