New Shanghai Regulation Targets Corrupt Families

May 6, 2015 Updated: May 6, 2015

Hoping to control what the state-run media Xinhua calls “a landslide of systemic corruption,” municipal authorities in Shanghai have released new legislation to limit commercial activity among spouses and children of powerful officials.

The regulations came into effect on May 1 and applies to officials at or above the bureau level in the government and Communist Party.

According to the new measures, the spouses of the involved officials are barred from ownership, partnering, or investment in any business. Officials’ children may not conduct business in the regions where their parents have jurisdiction, nor are they allowed involvement in state-run firms. Officials must file annual reports detailing the activities of their spouses and children.

One fifth of Shanghai’s municipal officials will be subject to random spot-checks, Xinhua reported.  

Nepotism is a longstanding problem among Chinese regime elites. As recently-crafted Chinese saying goes, “one man becomes an official, and the whole family gets rich.”  

Shanghai, widely known as the power base of former Communist Party boss Jiang Zemin, is now on the front lines of the regime’s two-year-old anti-corruption campaign. A number of Shanghai officials and executives in state firms have been investigated and dismissed.

In March, deputy municipal secretary Dai Haibo was investigated for “severe violation of discipline and law.” Zhu Xiaochao, who directed the Shanghai branch of the National Security Bureau, was dismissed from his post on April 16. By that time, 33 executives had at the state-run Shanghai Baosteel Group Corporation had been investigated for corruption.

Gu Liping is the wife of Ling Jihua, disgraced former vice chairman of the National Chinese People’s Political Consultative Conference (CPPCC) investigated for corruption in last December. According to mainland Chinese reports, Gu found a non-profit organization Youth Business China in 2003, through which she formed broad political and business networks.

In another case, after China’s former vice chairman of the CPPCC, Su Rong, was investigated for corruption last June, his wife’s participation in taking bribes was also been widely reported by Chinese media. Su’s wife, Yu Lifang, is known as “Sister Yu” in business and political circles of Jiangxi Province due to her involvement in multiple business industries, such as mining and real estate. She would often take bribes as a stand-in for her husband so as to lower his profile.