For the seventh consecutive year, Han Deyun, a deputy to the National People’s Congress (NPC), China’s top legislature, tabled a motion calling for legislation which mandates that officials declare their assets, at the annual full session of the NPC earlier this month.
“As I am engaged in legal service, I have encountered many corruption cases firsthand. What troubles me is that some seemingly honest and well-meaning officials eventually become criminals,” said Han, a lawyer from southwest China’s Chongqing Municipality.
Chinese civil servants have traditionally not disclosed their income and personal assets and this lack of transparency is seen to be a major factor in corruption that continues to plague government organizations. During this year’s NPC session, the disclosure of officials’ assets and income was once again in the media spotlight.
In 2006, Han brought up the motion for the first time and was impressed by the enthusiasm of the media and the public. “It is not only average people but also officials who support this system,” Han said.
According to a survey by the Blue Book of Rule of Law issued by the Chinese Academy of Social Sciences (CASS) last year, 70 percent of public servants support Han’s motion.
After years of being told that conditions were not mature for his proposed legislation, in August 2010 Han received a reply from the Central Commission for Discipline Inspection(CCDI) of the Communist Party of China(CPC), the Party’s top discipline watchdog, saying that relevant authorities had begun drafting proposals for a system that would compel officials to declare their assets.
While Han is pleased by the positive feedback, he believes there is still a long way to go before effective legislation is actually introduced.
A long-term effort
Corruption is a major public concern in China. Last year, a total of 2,524 officials above the county head-level, including seven former ministerial-level officials, were investigated for suspected embezzlement or bribery.
“To solve the problem, the most effective method would be a legal one,” Han said. He insists that assets declaration by officials is one of the most effective ways to curb corruption.
Early in 1995, the CPC Central Committee and the State Council promulgated a regulation, requiring high-ranking officials to report their income.
In 2010 the CCDI issued a regulation that obliges leading officials to report personal income, the employment status of children and spouses as well as their property interests and investments. Leading officials are specified as those holding deputy-county level positions or above in Party organs, legislatures, governments and other public institutions.
However, while these income details are already available to the Party’s discipline watchdogs and supervisory departments of governments at all levels, they are not disclosed to the public.
Meanwhile, in order to avoid punishment, some corrupt officials have transferred their illegal gains to spouses or children overseas. Some have exploited investment immigration policies to acquire foreign citizenship.
According to a report filed in 2008 by the Anti-Money Laundering Monitoring and Analysis Center of the People’s Bank of China, some officials and top company executives tended to transfer assets through at least eight routes, including cash smuggling, underground financial institutions and offshore financial centers.
Only a complete assets declaration system can help prevent corrupt officials from fleeing the country and transferring embezzled funds and bribes abroad, said Xin Xiangyang, a research fellow with the CASS.
However, the CCDI hasn’t given a timetable for implementing the much-anticipated assets declaration system for officials, citing technical reasons.
Wu Yuliang, Deputy Secretary of the CCDI, said at a press conference in June 2011 that two mechanisms were vital for the system to be introduced―one would cover social credit, information such as loan and credit history, and the other would highlight personal information. Both needed to be up and running before officials were required to disclose personal assets to the public, according to Wu.
“Any good system has to have accompanying measures and a proper environment to become feasible,” Wu said, adding that it will be difficult to implement the system in China without these two mechanisms because the public will not trust accounts provided by officials if they don’t have access to relevant statistics.
Wu, however, said that assets declaration was a common part of anti-graft measures in many countries and had proved effective. “We are confident about setting up such a system,”Wu said.
According to the CPC Central Committee’s anti-corruption guidelines for 2008-12, the Party will accelerate research and evaluation efforts to set up the system, though there is more research and evaluation work to be done.
Talking about details
“According to the reply from the CCDI, we need to disseminate knowledge, change people’s thinking, and establish a favorable social atmosphere for the launch and implementation of the system,” Han said. “Based on the reality of China, adequate studies and research for the system’s design are needed. The scope of the declarations, whether the assets declaration results should be open to the public, and what steps are needed to imple- ment this system, need to be determined.”
For Han, a moderate, rational stance needs to be adopted by all parties. “National legislation will act as a very powerful signal for all officials, who will in time realize that having their assets open to the public is not only a moral obligation, but a legal duty,” he said.
While enacting nationwide transparency legislation may take some time, targeted pilot programs have emerged as a possible means of forcing officials in key industries to declare their assets.
Programs that target officials who make decisions on huge spending plans or contracts, as well as those dealing with construction companies and real estate projects, have been suggested as an interim step before broader national legislation is enacted.
Supporters of pilot schemes argue that if the top-level leaders of key departments are monitored, a precedent for greater transparency will be set throughout the civil service.
“Civil servants differ widely in terms of their power and scope for corruption, treating them in a completely uniform manner is inefficient and therefore the enforcement of any policy should not be completely rigid,” Han said.
In recent years, a handful of local governments have implemented pilot programs requiring officials, albeit mostly at fairly low levels of the government, to post information about their finances.
In 2009, the local government of Jiangbei District in Chongqing demanded that new civil servants declare their property holdings.
In central China’s Hubei Province, disciplinary authorities have set up a work team to research an assets declaration program for government officials.
Trial assets declarations would be carried out in six cities in the province from May this year, according to provincial government sources. The CPC Hubei Provincial Commission for Discipline Inspection and the Department of Supervision of Hubei Provincial Government have formulated an action plan, which has won approval from central authorities.
But while the local initiatives have been widely applauded, the extent of their openness has been questioned. In almost all trials, information has only been posted on government websites for a short time, and without lists of properties under the names of spouses and children of involved officials.
Verifying the accuracy of officials’ declarations presents another problem.
“The biggest difficulty lies in the conflict between legal items and reality,” Han said.“Some officials have substantial gray income. If they declare their assets truthfully a huge discrepancy will emerge between their official salaries and their assets. I don’t think ordinary citizens will accept these discrepancies.”
Though a comprehensive assets declaration system is expected to prevent these discrepancies from emerging in the future, questions remain over how past discrepancies in salaries and assets should be handled.
“The focus should be on prevention not on punishment as this would lead to officials actively working against the introduction of the system,” Han said.
Han believes that the internal income reporting system for high-ranking officials since 1995 has laid a solid foundation for greater transparency. “The earlier we do it, the better. The later this legislation, the heftier a price we will pay,” he said.