Winnipeg Free Press - PRINT EDITION

One baby, much corruption

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In January, superstar Chinese film director Zhang Yimou was fined the equivalent of $1.24 million for having three children in excess of the country's strict "one-child" family-planning standards. It was a significant, possibly record fine, meant in theory to compensate the state for the social and material costs associated with those pesky extra three lives.

This raises an interesting question: What happens to Zhang Yimou's $1.24 million? Or more importantly, what's happened to the estimated two trillion yuan ($320 billion) in social maintenance fees millions of other Chinese parents have paid since 1980? This week, a court in Guangzhou ruled that the Family Planning Commission of Guangdong Province must disclose the specifics of its own data within 15 days.

Guangdong's commission strongly fought the lawsuit demanding that they come clean. They have good reason to resist greater transparency. Last year, for example, Guangdong's Family Planning Commission claimed to have collected 1.456 billion yuan ($235 million) in "social-compensation fees." The province's Department of Finance, on the other hand, reported that collections amounted to 2.613 billion yuan ($421 million).

The problem, according to Chinese media reports, is quite a bit of that revenue doesn't seem to land in government treasuries. In rural Yunnan Province, for example, audits suggest in one county as little as 10.18 per cent of social-compensation fees flowed into government coffers.

Needless to say, the stench of corruption hangs heavy over such discrepancies. In Yunnan, officials were found using social-maintenance fees to pay for personal expenses. In some regions, local authorities allow officials who collect the fees to keep a certain percentage of them. The situation -- whereby officials are incentivized to hunt down children for their revenue-generating potential -- is both untenable and perverse.

It is also entirely contrary to China's family-planning goals under President Xi Jinping who has transformed the "one child" policy to allow Chinese parents to have second children under certain circumstances. The need is pressing: Three decades of population control have left China with a rapidly aging population and not enough young workers to support them. Under such circumstances, it's counterproductive (as well as deeply unpopular) to allow thousands of bureaucrats to roam China in search of family-planning violations.

 

-- Washington Post-Bloomberg

Republished from the Winnipeg Free Press print edition April 5, 2014 ??65530

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