CHINA TAKES ITS FIGHT AGAINST CORRUPTION ONLINE

By Ananda Martin[1]

Publication Date: Oct. 17, 2011

China is tackling what some within the Communist Party have characterized as an epidemic of corruption among its ranks - online. In June, a central bank report stated that, since the mid-1990s, between 16,000 to 18,000 corrupt government officials stole more than $120 billion and fled overseas. To combat this problem and increase public faith in government, corruption watchdogs are increasingly relying on the internet as a tool to promote transparency. A few recent examples:

On September 18, China’s Supreme Procuratorate (SPP) announced the creation of a national online database of convicted bribers. The project, an extension of local listings dating back to 2006, is designed to prevent those blacklisted from participating in government bidding and procurement processes.

Officials in Shaoxing City, in eastern China’s Zhejiang province, must now post documents related to public expenditures – contracts, bills, and invoices – online, for all to see. Villagers without computers can access information about the rural collective’s resources on hundreds of touch screens available throughout their villages.

In Nanjing, the provincial capital of Jiangsu, construction projects involving more than 1 million yuan of public funds must go through a public bidding process via an online trading system. Called “e-Sunshine,” this system has been credited with assuring fair bidding procedures in 48 billion yuan of government projects in the past two years. The computerized platform deters bid rigging by analyzing bid applications and bidders’ details. Documents uploaded from the same electronic address, for example, trigger an alert that prompts local supervisors to investigate. In at least one instance, an investigation uncovered a conspiracy by bidders to drive up prices and led to the bid-riggers’ eventual arrest.

Smaller cities like Kunshan and Wuxi have established online monitoring systems designed to prevent officials from accepting bribes. The e-platform requires someone paying an administrative fee to input the amount. The system sends an alert to supervisors if the input amount exceeds the official charge. Receipts are posted online, so the payer can quickly identify any discrepancy.

Not all efforts to harness the power of online tools are state-sponsored. Online fora such as “I-paid-a-bribe” websites in India have proven popular if controversial weapons in the fight against government graft. In mid-June, anti-corruption activists in China, inspired by the success of these projects abroad, set up a number of sister sites to provide Chinese internet users with a place to report and discuss official bribery. With names like “wohuilule.com” (“Ipaidabribe.com”), the sites quickly generated traffic. They were just as quickly shut down.

Under PRC law, website operators in China must register their URL and obtain an internet content provider license in order to operate. Failure to do so means being forced off the internet. Yet by mid-July, with the apparent support of party officials, many of the sites had obtained the necessary approvals and reopened for business, surprising even their founders.

But if the Chinese government is outwardly supportive of netizen’s efforts to fight corruption, it still wants tight control over internet content. That became clear in August, when Chinese censors reportedly shut down 6,600 websites for having ‘negative influences’ on users, among other reasons. China’s State Internet Information Office, recently established to supervise internet regulation, and the Ministry of Information and Technology, which oversees website registration, were among the government agencies behind the closures.

Just days ago, authorities in Beijing reportedly censored a survey of luxury watches worn by Chinese government officials posted by internet activist “Huaguoshanzongshuji” or “General Hua.” The microblog, hosted by Sina Weibo – China’s answer to Twitter – initially drew praise from Xinhua for its clever sleuthing, but quickly became a source of controversy due to the large number of officials featured. The inspiration for the survey came to General Hua in the wake of the Wenzhou high-speed rail crash in July. He noticed that, in news coverage of the accident, newly-appointed railway minister Shen Guangzu sported a 70,000 yuan Rolex while one of his deputies, Lu Dongfu, wore a 50,000 yuan timepiece. Quickly doing the math, General Hu concluded that such luxuries normally lay outside official salaries, and used public information sources such as Google Images and photos on government websites to compile his survey.

If recent events are any indicator, the Chinese government is increasingly embracing the internet as a way to shed light on the vast and often unseen workings of the state-run economy. Nevertheless, it still prefers to wield the flashlight.

[1] Ananda Martin practices international corporate and compliance law with Paul Hastings LLP:http://www.paulhastings.com/professionalDetail.aspx?ProfessionalId=114831. The views expressed here are those of the individual author writing in her individual capacity and are not necessarily those of the ABA or the Task Force.

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Ananda Martin

Ananda Martin