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Campaign to close budget loopholes

Agnes Cheung

PREMIER Li Peng is paying special attention to the problems of allowing local governments to set their own budgets after the bribery case of ex-Beijing vice-mayor Wang Baosen, top economist Hu Angang says.

Central authorities are now studying ways to close the loopholes of the system which is intended to give flexibility to local governments in building basic infrastructures and other projects, he said.

At a lecture at Hong Kong Baptist University yesterday, Mr Hu said many local officials, especially those who controlled budgets, took advantages through organising projects.

Mr Hu, an outspoken researcher with the National Conditions Study Group under the Chinese Academy of Sciences, said the system should be reformed so local budgeting was placed under the scrutiny of local legislators.

'As long as the system is unchanged, there will be other Wang Baosens,' he said.

Mr Hu supports the scrapping of preferential policies.

'I think there should be more open discussions over other policies in future so that decisions will be made through a democratic and legal process,' he said.

He said some government policies were influenced by various areas and cliques.

'If the policies are not continuous and stable, foreign businessmen cannot have confidence in investing in our country.' But in building a market economic system and modern democracy, there would be resistance from various groups and people as their interests would be affected.

China could enjoy long-term peace and stability in the 21st century only if economic and political systems were reformed, he said.

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