• 10 Dec, 2025 *

Xi Jinping’s anti-corruption campaign, launched shortly after he assumed Party leadership in late 2012, is the most sweeping and institutionally consequential crackdown in the post-Mao era. Although China has conducted at least six major anti-corruption drives since 1982, this campaign differs sharply in scope, duration, and institutional ambition. Rather than a short-lived disciplinary burst to manage scandals or stabilize legitimacy, scholars argue it represents a shift toward credible commitment, structural reform, and corruption prevention—features largely absent from earlier efforts (Manion 2016).

The institutional core of the campaign is the Central Discipline Inspection Commission (CDIC), whose authority expanded dramatically. Discipline inspection committees have long held broad jurisdiction over ideological, procedural, and moral violations, but their effectiveness was historically constrained by “dual leadership”—local Party committees that could shield their own networks. Xi’s reforms strengthened vertical control: the CDIC deployed embedded offices in ministries, dramatically increased the use of roving inspection teams, and prohibited inspectors from serving in their own localities. These innovations, combined with rapid rotation and tighter reporting rules, reduced opportunities for local interference.

The campaign’s intensity was unprecedented. In 2013, discipline inspection bodies completed 173,000 cases and punished 182,000 officials; by 2014, the numbers rose to 218,000 cases and 232,000 punishments.

Yet enforcement was only half the story. A defining—often overlooked—feature was the emphasis on corruption prevention. Drawing on insights reminiscent of De Soto (1989), the campaign targeted the vast “tower of approvals” that structured state–business interactions. Between 2013 and 2017, China abolished or simplified thousands of national-level procedures (and tens of thousands locally), cutting required approvals to less than half of what they had been a decade earlier. By reducing opportunities for rent extraction rather than merely prohibiting them, the reforms altered the underlying incentive structure—what Manion calls transforming the regulatory “cage” into a real cage.

The campaign advanced further than any previous effort by reaching into the People’s Liberation Army and breaking long-standing norms of elite immunity—most notably through the prosecution of former Politburo Standing Committee member Zhou Yongkang.

Who were the targets?

Although Xi Jinping’s anti-corruption campaign was officially framed as a neutral and meritocratic purge of graft, the empirical evidence suggests a deeper restructuring of elite governance. Rather than simply disciplining bad actors, the campaign functioned as a mechanism of political recalibration, targeting certain types of officials and shifting the internal logic of promotion and loyalty within the Chinese Communist Party (CCP).

From Permissive to Punitive Governance

Xi et al. (2025) offer a formal model of authoritarian governance to explain this shift. Drawing on theories of elite survival (Svolik 2012; Boix & Svolik 2013), they argue that corruption is a double-edged sword: it generates rents that bind ruling coalitions together, but it also breeds public resentment and encourages autonomy among economically successful local officials. In the face of growing risks—whether institutional, ideological, or reputational—leaders may switch from a permissive model, which tolerates graft in exchange for performance, to a punitive model, which recentralizes control and elevates ideological conformity.

To test these propositions, Xi et al. compile an original dataset of 1,708 city-level leaders (mayors and party secretaries) from 1994 to 2021, drawing from official appointment records and disciplinary reports from the Central Commission for Discipline Inspection (CCDI). Their results are threefold:

Before 2013, GDP growth was positively associated with promotion. After 2013, economic performance no longer predicted career advancement.

In the campaign’s early years, high-performing officials were more likely to be investigated for corruption—suggesting a shift in selection incentives.

Following the campaign, local government work reports show greater alignment with Xi’s policy agenda, particularly “New Era” ideological slogans.

They assess this final trend using Structural Topic Modeling (STM) on over 1,200 annual work reports between 2013 and 2018, allowing them to track topic salience over time and quantify ideological congruence.

[INSERT Figure: Salience of New Era policy themes in city work reports]

Scope and Hierarchy of Investigations

The scale of enforcement was unprecedented. From the 18th to the 20th Party Congress, the CCDI investigated:

553 provincial or ministerial officials

Over 25,000 prefecture- and bureau-level cadres

More than 182,000 county- and department-level officials (Xi et al. 2025)

By May 2021, over four million cadres had been investigated and 3.7 million punished (Yang et al. 2024).

[INSERT Figure: Number of investigated officials by rank and year]

These were not random purges. Lorentzen (2024) analyzes promotion and arrest data across provinces to explore whether elite turnover followed systematic patterns. Using publicly available arrest reports, patronage networks, and official biographies, he shows that in provinces where top leaders were purged, meritocratic promotion rules broke down, and GDP performance ceased to matter. Arrests often followed deviations from desired promotion patterns, suggesting norm reinforcement rather than indiscriminate targeting.

Lorentzen also conducts network analysis on the political connections of arrested officials. While some analysts viewed the campaign as a tool for personal power consolidation, his findings complicate that narrative. Ties to the Politburo Standing Committee did not predict protection—but personal ties to Xi or Premier Li Keqiang did, while provincial powerbrokers were disproportionately central in the disciplinary network.

[INSERT Figure: PageRank-based network of arrested elites]

Corruption, Income, and Elite Skew

Yang et al. (2024) provide a detailed socio-economic profile of convicted officials between 2012 and 2021. Their dataset includes information on personal characteristics, years of party membership, educational background, administrative level, and estimated illegal income. They find that:

Most convicted officials already ranked in the top decile of China’s urban income distribution based on legal income alone.

Corruption boosted their incomes by 4.7x to 7x, allowing 83–91% to enter the top 1%.

The top 10% of perpetrators accounted for 58% of total corrupt income; the top 1%, for 21%.

[INSERT Table: Income distribution of convicted officials before and after corruption]

These findings paint a picture of elite graft rather than petty bureaucratic bribery—puncturing the narrative that corruption was a diffuse, low-level phenomenon.

Political Connections in the Corporate Sector

Griffin et al. (2022) explore the corporate dimension of the campaign, constructing a dataset of 408 publicly listed Chinese firms whose executives were investigated between 2012 and 2019. Their data combine:

A full panel of managerial turnover

Over 2.3 million corporate disclosures

News reports from 300 financial media outlets

They find that investigated firms were more likely to show signs of poor governance, self-dealing, or inefficient investments. However, political connections mattered too: local connections increased investigation risk, while ties to the central elite or shared alma maters with Xi’s faction decreased it. This dual pattern—of both disciplinary rationality and political selectivity—suggests the campaign was not merely punitive, but strategic.

The Economic effect of the Anti-Corruption Drive

The economic effects of Xi Jinping’s anti-corruption campaign are best understood through two lenses: first, the developmental role corruption previously played under informal governance; and second, the consequences of disrupting this model. Drawing on rich empirical work, we now understand that the campaign not only curtailed rent-seeking but also reshaped the incentives and capabilities of local governments, producing a complex mix of costs and realignments.

Corruption as a Development Strategy

Before the campaign, corruption in China functioned less as a drag and more as a lubricant in the machinery of local economic governance. Jiang (2018) shows that local officials with patronage ties to provincial leaders consistently delivered stronger economic growth. Based on city-level panel data (2000–2011) and a novel method for detecting informal ties from career promotions, his analysis reveals that connected leaders generated an average of 0.38 percentage points more GDP growth annually than their unconnected peers—roughly 275 million yuan in additional output for an average city. These personalist ties substituted for weak formal institutions and helped resolve principal-agent problems within the bureaucracy.

A similar logic is evident in Chen et al. (2021), who evaluate a 2004 corruption crackdown in Heilongjiang province. Using firm-level panel data covering 388,000 manufacturing enterprises from 1999–2007, they find that the crackdown reduced firm productivity and entry, particularly among private and foreign firms. These disruptions were likely driven by the collapse of informal mechanisms—bribes and guanxi—that firms had used to operate effectively within a state-dominated economy. Notably, state-owned enterprises (SOEs) were unaffected, highlighting how corruption had disproportionately supported non-state actors.

The Crackdown and Its Economic Shock

Xi’s campaign upended this growth model. Xu et al. (2025) use a staggered difference-in-differences approach to estimate the impact of political shocks—specifically, the downfall of local officials’ patrons—on local economic outcomes. Their analysis covers over 300 prefecture-level cities between 2012 and 2019.

Figure 2 from their study shows the geographic expansion of anti-corruption shocks, illustrating the campaign’s deepening reach over time. The authors find that in cities where a local leader’s patron was investigated, nighttime light intensity—a proxy for economic activity—declined by 6.8%, corresponding to a 2% drop in GDP. This sharp decline is illustrated in Figure 3, an event-study graph tracking light intensity before and after the shock.

Importantly, the cause was not external. Xu et al. rule out reduced fiscal transfers or changing central policy. Rather, the results reflect a chilling effect on local officials, who had previously relied on corruption-induced “gray effort” to meet economic goals. Once these behaviors became liabilities, local governments retrenched, slashing land sales, infrastructure spending, and procurement contracts—key channels through which growth had been engineered.

Figure 3 (Xu et al., 2025) makes this dynamic clear. The downturn begins only after the political shock and intensifies over time. Meanwhile, firm entry declined, especially in corruption-prone sectors, reinforcing the finding that economic performance had been intertwined with rent-seeking behavior.

Shifting Priorities: From Growth to Welfare

Yet the campaign also shifted governance priorities. Xu et al. find that after anti-corruption shocks, cities increased attention to environmental protection and public education, with measurable improvements in air quality and school capacity. This suggests the emergence of a new governance model centered on “high-quality development” rather than GDP-maximization.

However, officials who continued to deliver high growth post-shock were less likely to be promoted and more likely to be investigated, confirming that under the new rules, economic success had become a political risk. The incentives that once drove ambitious local development were reversed, reducing initiative but also reducing perverse incentives.

The Market Value of Political Power

Other studies quantify the economic rents embedded in the pre-campaign system. Fang et al. (2019), using over 1 million mortgage transactions in 100+ cities, find that bureaucrats received average housing discounts of 1.05%, rising to nearly 4% for high-ranking officials in real estate-relevant agencies. Developers provided these discounts not for immediate favors, but to cultivate future patronage—a key indicator of the market value of bureaucratic power.

Chen and Kung (2019) analyze over 1.6 million land transactions (2004–2016) and find that firms tied to “princelings”—the politically connected offspring of top officials—paid 55–60% less for land than non-connected firms buying comparable parcels. Figure IV in their paper shows a tight clustering of princeling land purchases below the 45-degree line, confirming systematically lower prices.

Even more revealing is that local party secretaries who facilitated these discounts were 23.4% more likely to be promoted, often using discounted land as political currency. Yet Figure VI shows that after Xi’s campaign began, the volume and discount size of princeling purchases fell sharply, especially in provinces targeted by CCDI inspections or where Xi installed new secretaries. Land prices for princeling firms rose by 42–56%, depending on the province and method used, indicating a substantial reduction in elite rent extraction.

Beyond structural incentives, the campaign also targeted symbols of elite privilege. Lavish banquets featuring shark fin, sea cucumber, imported beef, and especially high-end Baijiu (白酒) had become potent sites of corruption (Shu & Cai 2017). A single vintage bottle of Moutai could cost over ¥1 million (~$160,000), earning it the reputation of being “bribe currency.”

Xi’s 2012 “Alcohol Bans” order and subsequent prohibitions across military and civilian government severely disrupted this informal economy. An event study using stock market returns of Baijiu producers found statistically significant negative abnormal returns following the announcement—indicating that investors believed the government’s crackdown was credible (Shu & Cai 2017, GCAR Plot, Fig. 2). Roughly 20% of Moutai was consumed by the PLA, with some military units reportedly spending half their reception budgets on alcohol alone.

A broader consumer response is documented in Qian and Wen (2015), who show that imports of conspicuous luxury goods—notably jewelry—fell by 55% (≈$194 million) post-crackdown, with no comparable drop in inconspicuous luxury goods like art or imported food. Figure 1 in their study shows an immediate and persistent decline in jewelry imports, consistent with a real reduction in corrupt consumption rather than retailer-driven demand expectations.

Targeting Elite Privilege in Land and Housing

Corruption also flowed through land markets. Chen and Kung (2019) analyzed 1.6 million land transactions (2004–2016) and found that firms connected to “princelings” (offspring of top Politburo members) paid 55–60% less for land than similar firms without connections. Figure IV in their study shows these purchases consistently below the 45-degree price parity line. Crucially, provincial leaders who granted these discounts were 23.4% more likely to be promoted, turning rent extraction into political capital.

In housing markets, bureaucrats similarly received preferential treatment. Fang et al. (2019), analyzing over a million mortgage transactions, found that government officials received 1.05–3.9% discounts on housing prices, particularly when they were higher in rank or worked in critical agencies for real estate development. This again illustrates how economic advantage was distributed not via markets, but through proximity to power.

Broader Redistribution and Data Integrity

While growth slowed, social welfare gains were real. Xu et al. (2025) found improvements in air quality, education spending, and school capacity, suggesting a shift toward higher-quality development. Similarly, Han et al. (2022), using five waves of CFPS data, found that the anti-corruption campaign reduced extreme poverty rates in the most corrupt counties by 3.7%, and increased business income and credit access among the poor. However, they found no improvement in basic infrastructure—likely due to officials’ loss of personal incentives to push such projects.

Perhaps most strikingly, Zhang et al. (2025) show that the campaign even improved data accuracy. Local leaders whose predecessors were expelled were more likely to reduce GDP manipulation, as measured by discrepancies between official stats and satellite-derived nighttime lights. Leaders promoted from outside jurisdictions were especially likely to correct inflated figures. The campaign thus created a temporary “opportunity window” for bureaucrats to reset local baselines.