EMBEZZLEMENT, fraud, backhanders and plain old-fashioned waste accounted for €24 billion missing from China’s public purse in the 11 months of this year, the country’s top auditor said in a report that highlights just how widespread corruption is in China.
The country’s fiscal stimulus plan proved a fruitful place for corrupt officials to find easy pickings, and some cases were truly outrageous.
Officials in Datong in Shanxi province were rebuked for using 760,000 yuan, about €75,000, earmarked for expanding the airport, to buy a luxury Sports Utility Vehicle.
They received a demerit on their records, and the SUV was auctioned.
“We should enhance officials’ awareness of law and set up a clear accountability system at all government levels,” said Liu Jiayi, head of the National Audit Office, he told the Xinhua news agency as his office issued its report.
Corruption is the most controversial issue in China today. Fearing a popular backlash against corrupt officials creaming off public funds, the ruling Communist Party has taken significant steps to stamp out graft, particularly by local cadres, in the interest of preserving stability.
The auditors went through the books of more than 20,000 officials and some 100,000 companies, including 14 provincial governors and ministerial-level officials, as well as the directors of 12 SOEs, between January and November this year.
The auditors said that more than 230 people, including 67 government officials, had been handed over to disciplinary or judicial authorities for their roles in the missing funds.
One of China’s leading commentators on financial issues, Dr Ye Tan, said the fact audits are carried out after projects have been started makes it difficult to supervise how money is spent.
“Next year I think the embezzlement problem will be less severe than this year’s, since next year, there will be fewer new infrastructure projects being carried out,” she said.
“If our way of auditing changed and if auditors were involved in investment projects from the outset, and were able to closely follow projects from the start, then I believe the embezzlement problem could be addressed,” said Dr Ye.
Some bigger projects are just ripe for backhanders, and Mr Liu said there should be greater oversight on projects such as the reconstruction after the devastating 2008 earthquake in Sichuan, the Beijing-Shanghai high-speed railway, the building of gas pipelines bringing gas from the far west to the eastern coast, and major dam projects.
“In the course of raising domestic consumption, some of the allotted money never reached its destination, and some local funds were not properly managed and regulated,” Mr Liu told local media.