High-ranking government officials, senior managers of state-owned enterprises (SOEs) and their families will undergo stiff checks as they leave China in the wake of staggering corruption cases.

A recent report by the Ministry of Commerce estimates 4,000 corrupt Chinese officials and SOEs managers have fled overseas in the past two decades, taking US$50 billion out of the country.

Many of them are thought to have first sent their family members to study or live overseas before skipping the country themselves.

As a result, the government will take a closer look at any of their relatives heading overseas.

They will now be required to report their intentions to related departments before they leave, says Li Xiaowei, a researcher with the Taiwan Democratic Self-Government League.

He said the scheme currently applies to director-general-level officials in central government departments, county-level officials in local governments and SOEs managers at the same levels.

In line with the program, those in violation of the regulation will be given disciplinary punishment.

The Central Commission for Discipline Inspection of the Communist Party of China (CPC) and the Ministry of Supervision ordered a formal start of the pilot program in early July.

"If the experiment goes well, the scheme will gradually be spread to the rest of the country," he said.

Li said the measures were based on a seven-point proposal put forward by his league, one of China's democratic parties.

The league proposed the move in March at the Second Session of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), China's top political advisory body.

Professor Yang Haikun, vice-chairman of the Administrative Law Society of China, said imposing strict control on overseas travel of government officials and their family members will play a key role in rooting out potential corrupt practices.

He suggested the country's financial and banking authorities reinforce their anti-laundering work in a bid to curb growing capital outflow induced by corruption.

The loopholes in China's lax legal and management systems as well as the absence of an efficient control system on foreign-exchange flow are blamed for the illegal capital outflow.

The Ministry of Commerce report said corrupt officials and some private firms used companies registered in offshore finance centers, such as the British Virgin Islands and the Bahamas, to transfer capital illegally.

China has problems in getting officials guilty of corruption extradited back because it has extradition treaties with few countries.

The nation is aiming to improve judicial cooperation with other countries and the Interpol, but only a small number have been arrested and successfully brought back.

Most of the corrupt officials still at large abroad came from financial and banking sectors and SOEs, said a recent article of the China Comment magazine published by the Xinhua News Agency.

Low-ranking corrupt officials usually flee to neighboring countries while higher-ranking ones often flee to developed countries.

(China Daily August 20, 2004)