New Provisions Impose Stronger Requirements on Officials for Reporting Personal Assets

November 5, 2010

On July 11, 2010, Chinese authorities announced that provisions requiring officials to disclose personal and family assets, and other personal information to Communist Party organs had been issued in May. The 2010 provisions replace similar reporting requirements issued in 1995 (personal financial disclosure requirements) and 2006 (personal information disclosure requirements) and unify the two reporting systems. The 2010 provisions broaden the range of officials who must submit reports and require not only Communist Party cadres, but also non-Communist Party cadres to disclose personal and financial information to the Party. The provisions also clarify report monitoring and management procedures, and outline stiffer punishments for non-compliance. Like one of the earlier provisions, however, the 2010 provisions still do not provide for public oversight and do not necessarily apply to China's large body of officials below the county department level. The 2010 provisions are a part of a series of recent measures instituted by the Communist Party and the Chinese government designed to improve accountability and to address official corruption, which the public rates as a major problem and the Party considers a threat to its legitimacy.

The General Office of the Communist Party Central Committee and the General Office of the State Council jointly issued the Provisions Regarding Reporting of Relevant Personal Matters By Leading Cadres (2010 Provisions) on May 26, 2010, according to a July 12, 2010, People's Daily article. The 2010 Provisions replace two previous measures, the 2006 Provisions Regarding Reporting of Relevant Personal Matters by Leading Cadres (2006 Provisions), which sets forth guidelines on the disclosure of Party officials' personal information to the Party and the 1995 Provisions Regarding Reporting of Income by Leading Cadres in Party and Government Organs at the County Level and Above (1995 Provisions), which covers the disclosure of officials’ personal finances to the Party. Radio Free Asia reported on July 13 that

"after the provisions were issued, all of the major media in China reported the news in the front page headlines, but then the Propaganda Department of the Party Central Committee and the Information Office of the State Council circulated an emergency notice to all media requesting them to remove the news from the front page and to close related comment boards. They ordered all media to refrain from issuing their own commentary and required them to use official Xinhua media articles as the standard" [for their own stories].

Previous provisions established separate systems for the disclosure of officials' personal information and personal finances; and according to the July 12 People's Daily article, the 2010 Provisions combine those reporting systems and expand upon the list of items to be included in reports. In addition to items outlined in the 2006 Provisions, the 2010 Provisions stipulate that officials must provide information, if applicable, about emigration of their spouse or children to other countries, about their children's marriages to stateless persons (wu guoji ren), about any investigation of criminal liability implicating their spouse or children, and about their spouse's and children's occupations and employment status, including those not living in the same household and those living outside of China (Article 3). In addition to most of the items outlined in the 1995 Provisions, officials now must report additional personal assets including the real estate holdings, stocks, and a range of other assets they, their spouse, or their children living in the same household own. They must also disclose any investments made in unlisted companies or enterprises (touzi feishangshi gongsi, qiye), and any individual businesses (geti gongshang hu), and sole proprietorships or corporate partnerships (geren duzi qiye huozhe hehuo qiye) registered by their spouses and their children living in the same household (Article 4). However, the new provisions no longer specifically stipulate that leading cadres in public institutions and responsible people in enterprises need to disclose income from management or lease contracts (1995 provisions, Article 3.4).

The 2010 Provisions unify and clarify reporting systems and broaden the range of officials who must submit reports on their personal income and other personal matters detailed above; they stipulate that disclosure requirements apply to the "leading cadres" (lingdao ganbu) (Article 2), which means they apply to non-Communist Party members as well as Party members, as highlighted by the July 12 People's Daily article. This comes at a time when the Communist Party is emphasizing the importance of non-party leaders acting in accordance with Communist Party policies as suggested by this September 2 People's Daily article regarding the General Office of the Communist Party Central Committee issue of the "2010-2020 Education, Training, Reform, and Development Outline for Non-Party Personnel Representatives" and this October 27 Xinhua article about the Communist Party Central Committee United Front Work Department's recent training for non-Party members regarding the Party "spirit" of the 5th Plenary of the 17th National Party Congress. While the 1995 income reporting provisions also applied to "leading cadres" or "responsible people" in a list of designated organizations (Article 2), they did not include requirements for these two categories of cadres to disclose non-financial personal matters. The list of designated organizations in the 1995 Provisions included, Party organizations, people's congresses, local governments, the political consultative conferences, the people's courts, and the procuratorates. The 2006 personal information reporting provisions applied only to Party members who are leaders in a similar list of designated organizations, however, the list of organizations was expanded to include people’s mass organizations (renmin tuanti) and public institutions (shiye danwei) (Article 2.2). The 2010 Provisions add the eight Communist Party-approved, minor “democratic” political parties to the list of designated organizations (Article 2.2). In addition, the 2010 Provisions stipulate that all “leading cadres” at the county department deputy director level and above (xianchuji fuzhi) in the expanded list of designated organizations―which includes Party and non-Party officials―must disclose personal and financial information.

Finally, the 2010 Provisions unify and clarify to some degree disclosure requirements for enterprise leaders. Specifically, the 2010 Provisions require "mid-level" enterprise "leading personnel" in large (daxing) and very large-scale (tedaxing) state-owned enterprises (guoyou duzi qiye) or state-controlled enterprises (guoyou konggu qiye) to file reports (Article 2.3). In medium-sized state owned or state-controlled enterprises, "leadership office members" (lingdao banzi chengyuan) must file reports (Article 2.3). According to Article 4 of the 2010 Provisions, officials at the county department deputy director level must disclose all income sources, allowances, and subsidies, as well as remuneration from lectures, writings, consulting, editing, calligraphy, painting, and other work. The 1995 Provisions required this only of "leading cadres." Article 21 of the 2010 provisions allows Party committees and governments in provinces, autonomous regions, and municipalities directly under central control to broaden the scope of officials who are required to file reports to include lower level officials and to establish more detailed implementation procedures, "if needed."

There are a number of other noteworthy features of the 2010 Provisions. For example:

  • Cadres below the county department deputy director level are not subject to the 2010 Provisions, unless as Article 21 stipulates, Party committees and/or governments in provinces, autonomous regions, and municipalities directly under central control decide they need to expand the scope of officials who should file reports. The flexibility built into Article 21 of the 2010 Provisions, however, could also contribute to its arbitrary or politically motivated use. This is relevant because corruption and the lack of financial transparency at the village and township levels are two of the main factors leading to so-called mass incidents and social instability, as noted in a June 30 article in the Party-related journal, Seeking Truth. Relevant government and Party officials interviewed in the July 12 People's Daily article explained that township division level cadres were not included based on three considerations: (1) "there are a relatively large number of township division level cadres and to ask them all to disclose information would be an enormous task and would incur a relatively high cost"; (2) "China's geographical size is vast and conditions in each area differ greatly, so it would not be suitable to impose conformity of reporting"; and (3) "the main objectives of the revision are to realistically resolve individual leading cadre issues influencing the implementation efficiency of the reporting system and solve outstanding implementation problems. The revision's emphasis is on report content and reporting procedures."
  • Under the 2006 Provisions, reports generally should be kept secret, unless the organization or individual involved deem that the information "should" be made public "within a specified scope" (Article 10). The 2010 Provisions do not include such an article, but they also do not stipulate that the reports are to be made public. It remains unclear, therefore, whether under the 2010 Provisions individuals or organizations may make disclosed information public if they deem it appropriate to do so.
  • In addition to penalties stipulated in the 2006 Provisions including "criticism and education," "admonishment," and other lighter punishments, Article 17 of the 2010 Provisions expands the punishments to include re-assignment and dismissal for delayed or untrue reports, for concealing information, and for "not handling matters according to the organization's reply comments" (dafu yijian). According to Article 12 of the 2010 Provisions, pending approval from the "main person responsible" at the (official's) organization, prosecutorial organs now are able to examine an official's personal financial reports when investigating crimes related to the official's professional duties, which an analyst interviewed for a Prosecutorial Daily article said on July 12 will allow the reports to become "important evidence" in corruption cases.
  • Article 13 outlines another new feature: it states that if the public "reacts strongly" toward suspected problems with an official's finances, then discipline inspection entities and personnel departments could launch an investigation of an official, pending approval from the "main person responsible" within these entities and departments.

The 2010 Provisions come amid a series of measures passed by Communist Party and Chinese government officials in recent months and years to address corruption. The following articles, provisions, and plans highlight some of these measures:

  • A chronology of some of the main measures, policy statements, and important speeches related to disclosure systems for officials' personal financial matters: First Financial Daily article on April 10, 2009, via Phoenix.
  • A list of some of the Party measures reportedly issued since the 17th Party Congress in 2007: July 12, 2010, People's Daily article.
  • The revised version of Party principles for honest performance of governmental duties (52 point code of conduct) issued on February 23, 2010: February 24 Xinhua article, via the Ministry of Supervision.
  • The Interim Rules Regarding Strengthening Management of Officials Whose Spouses and Children Have Migrated Overseas issued in May 2010: July 27, 2010, Oriental Morning Post article, via China Elections and Governance.
  • The CCP 2008-2012 Work Plan to build a comprehensive system for preventing and punishing corruption, issued in June 2008: June 22, 2008, Xinhua article.

There reportedly have been calls for years for the Chinese government to pass a "sunshine law," as reported in a March 2, 2010 Reform Net article. "[T]he time is already becoming ripe for the appearance of a 'sunshine law'; everything is ready except the political resolve of the ruling party." While the 2010 Provisions do not carry the weight of a law passed by the National People's Congress, they have been seen by some as a step forward, according to the Reform Net article. According to an October 28, 2009, Radio Free Asia report, officials acknowledge that corruption problems are growing and a February 22, 2010, People's Daily report notes that corruption continues to be one of the top three concerns of Chinese netizens. In addition, Party officials see corruption as a threat to maintaining the Party's ruling position, according to a researcher at the Central Commission for Discipline Inspection quoted in a February 16 Seeking Truth article.

For more information on corruption see Section III―Democratic Governance in the CECC 2009 Annual Report and the CECC 2010 Annual Report.