A further entry in Justin O’Connor’s Shanghai Diary 2005 [context and introduction here]. This entry is dated June 29th.

I had dinner with some people from my Chinese family. One cousin told me about his job. He works for an electricity company. It is owned by the state but all the different provinces are allowed to compete with each other for contracts anywhere in China. This does not extend to domestic supply, competition for which they realise is nonsense (take note, Thatcher). But this socialist market is just as rapacious as any other. Large contracts for industry – remember when we had this? – and transport produce real feeding frenzies. My cousin’s job was to find out what the company who was buying the power really wanted for the contract. What was the price they were looking at? What were the parameters of the job in hand? Inside information on the brief, in short. However, after getting a sense of where the brief was really coming from, his job was then to find out how much money the man who was negotiating the contract wanted if my cousin’s company was to secure the contract. This involved a bit of wining and dining. But eventually the red envelope was handed over. This would be built into the budget as an essential part of getting the contract. Though this was all illegal, it was all normal and part of the business structure. He told me that all the foreign companies do it. He had contacted one such UK firm and cold-called four or five times. Eventually they met and red envelopes were passed over. This is so obvious nobody talks about it. It is assumed that the higher you go the more you take. And, again going back to ancient Chinese times, you take people with you. You build cliques – long-term cliques, not just hanging out after work in the pub. This process was transferred to the communist party, where politicking is about who is up who is down, and if your man is going down, you’re going down with him.

In Ming times corruption amongst the bureaucracy was rife. Those who tried to deal with it believed that the yang of idealism would counterbalance the yin of self-interest. The system eventually crumbled. Maybe Mao’s idealism was about dealing with the yin of capitalist backsliding from the socialist ideal. Certainly something of this – heavily intertwined with his own yin and yang of power ego and sex – marked his launching of the Cultural Revolution. That was certain to destroy the surviving social hierarchies, those that had persisted in the previous 18 years or so. But in the end it simply destroyed people’s faith in any ideals. People say corruption became endemic in the Cultural Revolution, as back door trading and social climbing through ideological posturing grew rapidly. The Cultural Revolution, subjecting society to politics, meant there could be no legal (or democratic) redress for those wronged, or any transparent rules for the conduct of everyday life. The post-1976 reforms have tried to change this – but the inadequate legal system and the non-existent democratic system still favour corruption and cliques. All of this is hidden behind economic success; or rather, not hidden just ignored. It is assumed that this is what happens everywhere. I have no idea how this is going to develop – just to say that when it comes time for the system to change itself (as it will, though I’m not saying in which way) this will be a problem.

This impression of Shanghai is by Justin O’Connor. All Shanghai Diary entries.