China Clamps Downs Harder on Local Government Shakedowns of Private Businesses
By Zhang Yichuann and Lu Zhenhua
China is intensifying a nationwide campaign to rectify abusive administrative enforcement practices that burden businesses, including an early warning system flagging localities where fines and confiscated revenues surge, a senior justice official said Wednesday.
“We conduct real-time statistical analysis of work situations nationwide and issue timely alerts and warnings,” said Hu Weilie, Vice Minister of Justice, at a State Council Information Office press conference. “For example, if revenue from fines and confiscations increases by more than 20% year-on-year, it’s set as an alert value, requiring the relevant local authorities to explain the situation before corresponding measures are taken.”
The early warning system marks the latest effort by the central government to rein in some local authorities’ profit-driven law enforcement pratices that threaten the private sector. Some cash-strapped local governments in China have been taking advantage of expanding jurisdictional reach to target lucrative cases involving private businesses from other regions, in an effort to find alternative ways to replenish government coffers.
The special campaign to standardize business-related administrative enforcement was fully rolled out nationwide in March, Hu said. The Ministry of Public Security, the Supreme People’s Court, and the Supreme People’s Procuratorate have each made arrangements for their respective systems. The Ministry of Justice, as the State Council’s administrative law enforcement supervisory body, is coordinating the efforts within government systems.
The current initiative focuses on four key problem areas, Hu detailed, including arbitrary fees and fines, inconsistent enforcement standards and requirements, irregular cross-jurisdictional profit-driven enforcement and abuse of power.
“These problems are widespread, highly detrimental, and are the most intense and concentrated complaints from businesses,” Hu stated. “The success of this special action hinges on whether these issues can be truly rectified.”
As of May 21, a dedicated platform had collected 6,232 problem leads, with 5,246 investigated, Hu reported. The clampdown has addressed cases involving 335 million yuan (about $46.3 million) and recovered 98.81 million yuan for affected enterprises.
Liu Bo, director of the Ministry of Justice’s Administrative Law Enforcement Coordination and Supervision Bureau, said that since the campaign began, Jiangxi province has removed 2,648 officers deemed unqualified for administrative enforcement, while Qingdao city in Shandong province removed 351. Nationwide, 1,140 leads have been transferred to disciplinary and supervisory authorities, resulting in action against 1,068 individuals.
“We are now focusing on establishing a regular training mechanism for administrative law enforcement personnel, with a particular emphasis on scenario-based training to ensure they possess the necessary legal knowledge, professional expertise, and enforcement skills,” Liu said.
Officers engaging in illegal or improper enforcement, particularly in severe cases such as abuse of power or brutal tactics, will be dealt with according to regulations, including potential revocation of their enforcement qualifications and referral for disciplinary or judicial proceedings, she added.
Contact reporter Lu Zhenhua (zhenhualu@caixin.com)
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