Perhaps the most unpleasant alert that Chinese Premier Wen
Jiabao heard from the country's political advisors at their annual
full session this year was a popular witty doggerel:
"Hoodwinking starts from villages, then the lies are copied by
township officials without changes, which roll all the way from
county officials to the State Council, whose orders are heralded
word for word in an inverted pyramid of rank, but only end in
receptions that make messengers drunk."
Though the tricksy jingle exaggerates a little, it partly
reflects the truth that the central authorities' policies are at
least covertly discounted, if not openly opposed, by some local
officials in implementation, said Yang Zhifu, who quoted the satire
to Premier Wen on March 4 at a panel discussion of the Chinese
People's Political Consultative Conference (CPPCC) National
Committee's annual session.
In a pledge to improve administration efficiency, Premier Wen
vowed when delivering the government work report to nearly 3,000
lawmakers last Monday that the central government will intensify
its efforts to strengthen the "policy implementation power" of the
country's administrative mechanism.
"The vow of Premier Wen signals that the central government has
begun to address the problems that impair government efficiency and
authority," said Zhao Zhiquan, a deputy to the National People's
Congress (NPC), on the sidelines of the top legislature's annual
Local interests confront central authority
The country's failure to meet the goals in reducing energy
consumption and pollutant discharge last year was cited by
lawmakers and advisors to illustrate how local officials' discount
in implementing central policies has weakened government
Premier Wen announced the goals to reduce energy consumption and
pollutant discharge against per unit gross domestic production(GDP)
by four percent and two percent respectively last March at NPC's
annual session, underscoring that the government should not seek
economic growth at the cost of environment and ecology.
Disappointingly, however, the energy consumption in 2006 went
down only 1.2 percent, while oxygen chemical demand (OCD) and
sulfur dioxide emission rose 1.2 percent and 1.8 percent.
Lawmakers said local officials' enthusiasm in economic growth,
rather than environmental protection, is to blame for the
Before the reform and opening-up drive started in the late
1970s, political faith was the sole motive that secured local
officials' adherence to central authorities' decisions, but now
they put local economic interests above all, said Wang Xiaoguang,
head of the economic operation and development section of the
Research Institute of Economy under the National Development and
Reform Commission (NDRC).
Driven by local economic interests or even for self good, local
officials may turn a blind eye to those projects which cannot meet
the requirements on environment protection, said NPC deputy Zhao
An inspection campaign in seven provinces launched by the State
Environmental Protection Administration (SEPA) last October found
that only 30 percent of the investigated projects were checked on
pollution control design before they were granted construction
The SEPA has recently unveiled a blacklist of 82 projects that
seriously violated environmental protection assessment rules.
Involving combined investment of 1.12 trillion yuan (US$145.8
billion), the big budget projects were protected by local
governments as they were cash cows.
Land expropriation is another area that local officials may
brave the central government's displeasure. As land sales are the
primary source of income for many local governments, officials are
very likely to ignore the central government's orders on arable
land protection and compensation for land expropriation.
National Auditor-General Li Jinhua said last June that 21 out of
34 highway projects reviewed in 2005 had violated government
regulations by not paying farmers proper compensation.
He said local governments had siphoned off 1.6 billion yuan
(US$200 million) in land compensation funds and used the money to
make up their own budget shortfalls or pay bonuses to
Unshared local fiscal burden
Economist Justin Yifu Lin attributed local officials' excessive
enthusiasm in economic growth partly to the country's tax system,
which has laid more pressure for revenue on local governments than
before the reform.
Under the current Tax Sharing System, which was launched in 1994
to reverse central fiscal decline, the central government takes the
bulk of the tax revenue of provincial governments, but local
governments find difficulties to pay for local fiscal expenditure,
and in some areas, even wage payments are delayed, according to
The nationwide agricultural tax exemption starting last year,
though applauded by farmers, left revenue-starved local governments
with more pressure as the exemption meant a loss of more than half
of their revenues, which unavoidably would lead to over-investment
in revenue-generating industrial enterprises and regional
protectionism, observed Lin, a CPPCC National Committee member.
"Local governments' attention is diverted away from long-term
development projects, and they are no longer interested in
investment for public goods," said Lin, director of the China
Center for Economic Research at Peking
Noting the tax sharing mechanism cannot excuse local
governments' slack response to the central government's policies,
however, NPC deputy Cheng Faguang called for a reform of the fiscal
The fiscal system should be decentralized to ease the economic
burden of local governments as well as to encourage
inter-governmental transfer for sound interaction between local and
central authorities, said Cheng, a member of the Financial and
Economic Committee under the NPC Standing Committee.
In a move to underline local officials' role in environmental
protection, the Organization Department of the Communist Party of
China Central Committee, which is in charge of cadre candidates
selection and evaluation, has announced that local officials'
achievements in environmental protection will play as an important
indicator for assessing their performance starting from 2007.
Applauding this new move, NPC deputy Tan Hui told Xinhua that a
key to help rebuild the authority of the central government's
policies is to make a feasible, scientific evaluation system to
assess officials' performance for promotion and punishment, adding
sever punishment is very necessary.
Other lawmakers said effective implementation of government
policies also needs the guarantee from laws. Officials must be held
accountable by laws if their dereliction of duty causes great loss
to the country and people, they said.
(Xinhua News Agency March 15, 2007)