BEIJING -- 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
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 full session.
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
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
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 failure.
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
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 Zhiquan.
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 licenses.
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 (145.8 billion U.S. dollars), 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
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 ( 200 million
U.S. dollars) in land compensation funds and used the money to make up their own
budget shortfalls or pay bonuses to staff.
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 Lin.
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
"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 Beijing
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 system.
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