Thu, Feb 27, 2014

http://www.smh.com.au/world/corrupt-chinese-officials-flee-overseas-some-bound-for-australia-20140225-hvdse.html

Beijing: Corrupt Chinese officials are fleeing overseas in increasing numbers to countries including Australia as an intensifying crackdown on graft takes hold within the ruling Communist Party, according to a new government think tank report.

The Chinese Academy of Social Sciences, a prestigious government-controlled think tank, urged stricter monitoring of what it termed “naked officials” - those whose spouses or children have migrated overseas and were therefore likely potential recipients of illicit funds from within China.

"The phenomenon of the flight of officials is likely to escalate, particularly under the current anti-graft wave," said Lu Yanbin, a researcher at the academy and co-author of the report, which was published on Monday. "Corrupt cadres are running out of places to live in this country."

President Xi Jinping’s anti-corruption chief, Wang Qishan, promised in January that the Communist Party would increase efforts to punish officials who attempt to flee overseas. This has included new regulations which block promotions for those “naked officials” found to have immediate family members based abroad.

 “Past experience shows that the most popular destinations [for corrupt officials] are the US, Canada, and Australia,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology. “Australia has already become a major recipient country [of Chinese corrupt officials].”

Australia’s popularity, Mr Hu said, could spike after Canada this month scrapped an investment immigration program that had been in operation for 28 years, after a crush of applications of wealthy Chinese mainlanders. About 45,000 applicants from China have been cancelled as a result, just as Australia ramps up its new significant investor visa program, which requires at least $5 million initial investment.

An estimated 1.2 million Chinese officials have immediate family abroad. Central Party School anti-corruption expert Lin Zhe said there was no guarantee the government’s new regulations would help curb the problem of “naked officials” fleeing, given previous attempts have proved ineffective.

“You can say these laws have reduced the opportunities for naked officials to flee,” Ms Lin told Global People magazine. “But in practice, its effectiveness has been lacking.”

A previous report from the CASS said more than 18,000 officials fled the country between 1995 and 2008, smuggling out assets totalling 800 billion yuan ($145 billion). In one week alone last year, the state-run Economic Observer newspaper reported 714 government officials fled overseas and did not return.

A separate report by the Boston Consulting Group last year said the movement of funds overseas from mainland China each year amounted to 3 per cent of China’s GDP.

This year’s CASS report also warned against senior officials promoting their aides and creating a "secretary gang" that may breed "organised crime and major violations", in an apparent reference to the former security tsar Zhou Yongkang. At least four of his former secretaries are under investigation for corruption.

Former Zhou aides being investigated include Ji Wenlin, the former deputy governor of Hainan, and Li Hualin, a former senior executive at state-owned oil giant China National Petroleum Corporation.

China’s anti-corruption body, the Central Commission for Discipline Inspection, said it investigated 51,000 people for corruption, bribery, embezzlement and abuse of power, and a total of 30,420 officials were punished last year for violating new party rules aimed at avoiding pomp and ceremony.

With Sanghee Liu