On May 4 Shanghai issued a new regulation barring the family members of leading Communist Party officials from doing business in the city. Commentators say this regulation is targeting former Party head Jiang Zemin and his faction.
Throughout China, the families of Communist Party officials trade on their relative’s clout to gain advantageous business relationships. The new Shanghai regulation targets this source of corruption by placing restrictions on the families of top officials in municipal government. It prohibits family members owning or serving in senior positions in various types of businesses, including foreign-owned businesses, and investing in companies doing business in Shanghai.
An official in violation of the new regulation has the options of having his spouses, children, and children’s spouses voluntarily withdraw from the business or resigning from his current post.
Freelance writer Zhu Xinxin pointed out that in only restricting officials’ families from doing business in Shanghai, the regulation leaves open an avenue for corruption.
“Local officials’ spouses cannot do business locally, but spouses and children from other cities are allowed,” Zhu said. “The officials can actually collaborate and exchange power to have their spouses and children do business where it is allowed.”
Professor of economics at Beijing Institute of Technology Hu Xingdou told Deutsche Welle that a similar regulation was issued as early as in the 1980s, but the restriction in Party officials’ spouse and children in conducting business was never implemented.
