The Embeddedness of Corruption in Contemporary China: The Bo Xilai and Lai Changxing Cases

Economic corruption cases are a window into networks linking state office holding with wealth accumulation. This paper draws on the concept of embeddedness (Granovetter 1985) to examine two prominent cases in contemporary China. The cases are, I claim, ideal typical of agents and their networks coming opposite social positions. One is “corruption from below”. Its agent is an entrepreneur from a humble background, Lai Changxing, who forged networks with hundreds of officials in an immensely profitable smuggling operation that was exposed in Fujian Province in 1999.  The other is “corruption from above”. Its agent was a high-level official born into the political elite, Bo Xilai, who accumulated great wealth through networks in his social circles that were revealed in 2013. This paper’s analysis centers on how the agents select, monitor, and sanction others in their networks.  There are two key findings.  One is that the networks are organized through third-parties (proxies). The other is that the networks’ institutional basis is constituted not only by trust, but also by coercion. The paper’s subsequent discussion considers some mirrored differences reflected in the humble and elite positions of the agents, and how their two kinds of networks can interact. In the conclusion, I use the paper’s argument to stress the need to develop an economic sociology of corruption.