How much does China stand to lose from its anti-corruption push?

While China’s anti-corruption campaign has undeniably contributed to the country’s recent economic slowdown – particularly where real estate and luxury goods like wine are concerned – its long-term effects on the economy are still up for debate.

One relatively pessimistic view of the changes to come was published in The Wall Street Journal‘s China Real Time Report in the form of a graph illustrating projected changes in China’s GDP based on improvement in corruption perception index.

According to these projections, a negligible one point improvement in this index would cost China two percent in GDP terms within just a year. The graph just falls short of being a comparison of the BRICS, and includes projections for Brazil, Russia and India – but South Africa has been replaced by the US. Apart from China, Brazil is the only other country where GDP is projected to drop as a result of reduced corruption. Conversely, Russian projections show an impressive jump in GDP between 2014 and 2015, should the same improvements in perceived corruption occur.

WSJ - The Costs of Cracking Down

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