Wen Jiabao, China’s prime minister, must have felt like he was hit by a political hurricane last week when the New York Times published a front-page story claiming that he and his family control a fortune of at least $2.7 billion.

While it has been generally known that the Communist Party elite were acquiring considerable wealth, that is still an eye-popping amount. All the more so because it is hardly an aberration. As my Council on Foreign Relations colleague Elizabeth Economy notes in a trenchant blog post on the Wen scandal, “the annual 2011 Hurun report on the wealthiest Chinese reveals that the top seventy members of the National People’s Congress are worth a combined total of $89.8 billion; in contrast, the net worth of the top 660 U.S. officials is only $7.5 billion.”

Economy is right to note that the scale of Chinese corruption should put to rest the fashionable opinion that the U.S. government should emulate the one in Beijing. Corruption on this scale is not only a major obstacle to the further development of the Chinese economy; it is also a huge problem for an unelected elite that hungers for popular approval. Beijing tried to block access via the Internet to the Times, but it is a safe bet that this scoop will become generally known on the mainland and will further the people’s cynicism about the motives of their leadership.

Unfortunately, the way that the Chinese leadership generally responds to such scandals is disconcerting. The typical Chinese counterattack is to push nationalist propaganda that demonizes the U.S., Japan, and other states, thus trying to channel popular anger outward at foreign devils. This is an inherently unstable status quo, with a small elite amassing vast wealth while whipping up xenophobic feelings to justify the way they rob their own people, and it portends greater choppiness in U.S. relations with China.

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