The Labour Ministry said local authorities used sums allocated for social welfare as if they were theirs. The immediate restitution of money has been ordered while measures to prevent abuse are in the pipeline.

Beijing (AsiaNews/Agencies) – The Chinese government is “very worried” about the increasingly common misappropriation of pension funds by public officials. On 3 December, the Labour and Social Security Ministry ordered local governments to make good deficits while news broke today of the disappearance of an executive of the Bank of China, who made off with 260,000 euros.

The latest case of misappropriation of pension funds to hit the news took place between April and July 2003 in Liaoning, where an official siphoned off 11.5 million yuan [more than one million euros] in pension funds destined for peasants in Lianshan near Huludao city. According to a local newspaper, the official gave the funds to an investment agency to administer them, taking first 1.5 million yuan, then 2 million yuan and finally 8 million yuan. But the company made a loss of 6 million yuan in unwise investments and the money was lost. The official was condemned to three years in prison for “abuse of official position”.

The most notorious abuse of pension funds emerged in September and involved Chen Liangyu, Communist party chief in Shanghai, and several other officials and leading businessmen. The Labour Minister said pension funds had been siphoned in all provinces, except Tibet, and 7.1 billion yuan were consequently missing (experts say the real figure would be much higher). Funds were embezzled mostly for "overseas investment, commercial loans to companies, construction of government buildings and other purposes”. Officials use the funds as if they were theirs but do not always manage to replace them.

Liu Yongfu , deputy Labour Minister, has promised immediate intervention and intensified scrutiny. However he charged the local authorities with not being attentive enough. He said all the missing money must be recovered immediately and local governments will have to meet losses.

What’s more, pension funds will now be kept in separate accounts and social security departments will have to indicate by the end of the month projects for better fund management. The regular publication of reports regarding fund management is also in the pipeline.

Abuse by local authorities poses a serious problem for the country. In the first half of 2003, more than 8,300 members of the Party and government and important managers escaped and another 6,500 vanished into thin air to avoid being tried for corruption and misappropriation.

• China
• economy
• corruption
• government
• communists
• misappropriation
• pension
• funds