China Vows Crackdown on Embezzlement, College Cities


2004-07-05
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HONG KONG — ; China has welcomed an embarrassing report by its national auditor that revealed that central government departments had embezzled more than U.S. $170 million in public funds, vowing to deal "seriously" with those responsible.

Premier Wen Jiabao told a recent teleconference on governance by rule-of-law that all those found by the National Audit Office to have violated laws and regulations would be "dealt with seriously," official media reported Monday.

Wen said China's cabinet, the State Council, would make a special report on the progress of the crackdown to the country's legislative body at the end of the year.

Wen called on all departments under the State Council, governments at all Levels, and enterprises to learn from the serious problems uncovered by the NAO's report, which also highlighted the abuse of power surrounding the recent boom in "College City" developments in major Chinese cities, the official People's Daily newspaper said.

The NAO found that 41 ministries and commissions had embezzled up to 1.42 billion yuan (U.S.$171.56 million) of funds dedicated to special projects, and spent them on the construction of residential and office buildings for their own use.

In a June 24 report to the National People's Congress (NPC) that brought corruption allegations close to China's top leaders, Auditor-General Li Jinhua said 55 ministries and commissions under the State Council had been found to have embezzled public money.

Li said the State General Administration of Sport alone had embezzled 131 million yuan (U.S. $15.83 million) from the national Olympic budget since 1999, and then used the money to build its own residential community — ; distributing subsidies to officials and setting up new companies.

He also hit out at the proliferation of "College City" projects in recent months which began to appear following a crackdown on unauthorized "development zones," often little more than a front for local government property scams.

In April, an investigative report by RFA's Mandarin service found that local government officials in the southern province of Guangdong had divided up land parcels to get around central government restrictions on land acquisitions for construction projects.

Local residents, who had valid land leases and construction permits, were under increasing pressure to leave their homes to make way for a "College City" development.

Li said "rule-bending project approvals and the illicit methods of land acquisition" were particularly obvious in the four cities of Nanjing, Hangzhou, Zhuhai, and Langfang.

In a "serious violation" of national laws and policies, Langfang's Dongfang College City development in the northern province of Hebei had devoured 5,728 mu (382 hectares) of agricultural land from 2001-2002 through the signing of illegal contracts with local city and village governments, Li's report said. The land was then used to build five golf courses.

In the eastern city of Nanjing, a dozen colleges were found to have taken out bank loans for construction purpose totaling 2.728 billion yuan (U.S. $330 million), a level of debt that would eat up 40-80 percent of their income in repayments, Li said.

China's central government recently passed an Administrative Licensing Law aimed at paring back the power of government departments and enforcing a culture of greater transparency.

"Governments at all levels should stick to the principles of putting the people first, making timely amendments to the existing laws and regulations, while keeping them relatively stable," Wen told the June 28 teleconference.

This would "prevent various departments from making their own regulations and even doing things in their own way," he said.

China has seen a growing wave of popular protests resulting from disputes over compensation, relocation, and the use of land used for subsistence farming in recent years.

Local officials frequently treat land in their jurisdiction as a resource available to suit their own agendas, and often employ heavies in the guise of relocation agencies to carry out their plans.

The authorities punished a number of officials in May for letting Jiangsu Tieben Iron Co. illegally obtain land and secure a 4.3 billion yuan (U.S. $520 million) credit line from a Bank of China branch to build a new plant.

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