China's Auditor-General Li Jinhua submitted an astonishing auditing report to the Standing Committee of the 10th National People's Congress (NPC) on June 23. Meanwhile, NPC vice-chairman Sheng Huaren delivered a report on the implementation of the Land Administration Law by a NPC's enforcement team.

Li's report uncovered five major problems.

First, government departments, from central to local levels, are all involved in embezzlement of state property and misuse of state funds allocated for disaster alleviation, education, Olympic and treasury bonds. Second, the lack of supervision over banks leads to a large number of illegal loans and financial malpractices. Third, tax evasion is serious and dereliction of duty is rampant in the tax collection circle. Fourth, some local governments illegally trade land and approve land projects. Fifth, private enterprises illegally get loans from banks.

The main body of malpractices, as seen from the report, is staff of government departments, officials and SOEs, followed by staff of financial institutions, private enterprises and individuals. Their targets of malpractice are state finance, tax, bank loans and land, and their major ways of "looting" state property are embezzlement, defraud and other unlawful methods.

This is only conclusion from a spot-check, which revealed ill management of some governments and poor implementation of law. The NPC standing committee has ordered thorough investigation by related departments.

(People’s Daily July 1, 2004)