President Xi Jinping's crackdown on corruption has sown so much fear that many Chinese officials are doing anything to stay out of trouble - from dithering over approving big-ticket projects to seeking early retirement.
A small number of top executives under investigation at state-owned enterprises have even committed suicide.
While the campaign has been a hit with a public usually skeptical about such crackdowns, it's having an unintended consequence, said bureaucratic sources and officials at state enterprises: Those supposed to implement much-needed economic reforms and run the machinery of government are dragging their feet because they are scared of attracting unwanted attention.
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One reason for the fear is that Xi's 18-month-old campaign shows no sign of faltering - it claimed its biggest scalp so far last week when the government said it would court-martial a former top army general for taking bribes, the most senior officer ever felled in a Chinese graft probe.
Another is that with corruption so endemic in China - especially in government procurement, the energy and construction sectors and the awarding of land-use and mining rights - many officials know they could be next.
"The anti-corruption campaign is having a big economic impact. Local officials are no longer keen to launch investment projects - they are laying low," said a government official in the eastern coastal province of Zhejiang, where Xi served as Communist Party boss from 2002 to 2007.
"People thought it would be short-lived, just like the others."
Some sources said large projects were attracting increasing public scrutiny on the Internet in China, even if there was no suggestion of graft, prompting officials to be cautious. A number of projects have been shelved in the past year, for example, after ordinary Chinese raised environmental concerns.
"Fear and uncertainty"
To be sure, the anti-corruption campaign is not the only reason some officials are unproductive.
Policy implementation has often been a problem in China. Any policy that could erode local government influence and reduce revenues might also face resistance, a key issue since Xi has pledged to allow market forces to play a decisive role in the economy by scaling back government intervention.
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While there is no data to show the crackdown is hurting the economy, Huachuang Securities in Beijing estimates a separate campaign against official extravagance may have knocked 0.4 of a percentage point off China's growth last year of 7.7 percent.
The party's anti-graft watchdog said in March that money spent on meetings and official overseas trips fell by about 53 percent and 39 percent respectively from 2012. That campaign has worried firms that supply premium liquor, expensive watches and luxury cars, as well as high-end hotel chains.