The Dang Wangluo ('黨网络; party network) describes a form of corruption within Xiaodong. Specifically it refers to the system of appointing people to high positions of government, big business and other key institutions in Xiaodong on the basis of personal connections rather then skill or merit. The dang wangluo is associated exclusively with the Xiaodong Regeneration Society, which has been accused of using its position as the party of power to expand its interests into the state bureaucracy, big businesses, broadcasting institutions and trade unions. The dang wangluo has been criticised for encouraging cronyism and nepotism as well as perpetuating an elite ruling plutocracy. Recently there have been substantial efforts within Xiaodong to disassemble the dang wangluo.
The Xiaodong Regeneration Society cme to power during the Corrective Revolution when the "old order" of aristocrats and clan leaders were replaced by military leaders and bureaucrats. Led by Lu Keqian, the Regeneration Society quickly sought to consolidate its power, first in 1933 when the regime confiscated foreign businesses in Xiaodong and redistributed them to party members, an act commonly seen as the beginning of the dang wangluo. Although the new regime officially emphasised meritocracy in reality key industries were placed under the control of party loyalists. With the regime becoming more entrenched, social mobility became a matter of whether one was a party member and "who you knew", with patronage systems becoming incredibly common. Officials in high positions would act as patrons to numerous "clients" (lower ranking officials) who would be promoted by the patron based on loyalty. Patrons would become more powerful by appointing more clients, who would form cliques and factions that would advance each others careers. The children of party officials soon became a privileged elite, often being quickly promoted by their parents as "clients" alongside friends and sycophants. This system of clientelism was encouraged under Ma Rongzhen and Li Zhaozheng who used such client-patron relations to increase their own power. The dang wangluo system enabled party officials to ensure loyalty amongst their "clients" who in return were promoted to high positions. Li Zhaozheng, a client to Ma Rongzhen, was promoted to the position of party chairman on the basis of his loyalty to Ma.