Financial Crime World

China’s Secrecy Epidemic Spreads Globally, Threatening Transparency and Accountability

A Brazen Display of Authoritarianism

In a shocking display of authoritarianism, China has been secretly exporting its model of governance to the world, undermining transparency and accountability in countries that do business with Beijing. The Chinese government’s obsession with secrecy is not only damaging its own reputation but also corroding the global norms of openness and democracy.

The Culture of Secrecy

Under President Xi Jinping’s leadership, China has become increasingly furtive, manipulating data and suppressing information about critical issues such as the COVID-19 pandemic and human rights abuses in Xinjiang. This culture of secrecy is now being replicated globally through China’s aggressive economic diplomacy, which involves writing confidentiality clauses into agreements with foreign governments and companies.

The Consequences

  • Countries that sign deals with Chinese state-owned enterprises or affiliated companies are forced to keep secret the terms of their agreements, allowing Beijing to exert undue influence over decision-making processes and conceal corrupt practices.
  • This has led to a reversal of decades-long progress towards greater transparency and accountability, as governments increasingly prioritize secrecy over openness.

The Devastating Effects on Fragile Countries

The effects of China’s secrecy drive are particularly devastating in fragile and at-risk countries, where weak institutional governance makes them vulnerable to manipulation by Beijing. The Open Government Partnership and Millennium Challenge Corporation, two initiatives aimed at promoting open and accountable governance, are being undermined by China’s approach.

Economic Costs

  • Opaque government processes and corruption can reduce a country’s attractiveness to foreign investors.
  • Erode the integrity of independent institutions.
  • Threaten the sustainability of democratic practices.

A Response from Open Societies

To counter this threat, open societies must:

  • Strongly privilege transparency and reaffirm principles and practices of openness.
  • Democratic governments and nongovernmental organizations must do a better job of explaining the problems caused by Beijing’s secretive and often corrupting practices.
  • A clearer understanding of the downsides of engagement with China will help countries avoid making choices that compromise democratic integrity.

Developing Structures to Counter China’s Secrecy Regime

Democracies must also develop structures and instruments to deal with the unique challenges presented by the Chinese party state, which prioritizes bilateral relationships over multilateral ones. Forming new and adaptable coalitions to negotiate with China from a position of greater strength is crucial in countering Beijing’s secrecy regime.

Exposing and Neutralizing China’s Global Secrecy Drive

Ultimately, exposing and neutralizing China’s global secrecy drive will require a purposeful and sustained response from democracies. By shining a light on the dark practices of Beijing, open societies can demonstrate their commitment to transparency, accountability, and democratic values, and counter the corrosive effects of China’s authoritarian influence.