China’s anti-graft watchdog calls out local governments for ‘diseases’ of bogus businesses, fake data, phony ‘likes’

CCDI slams officials for blind quotas forcing towns, districts to inflate business figures to meet unrealistic targets

Provinces have been under pressure to boost economic growth since the pandemic

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Chinese President Xi Jinping has repeatedly directed officials to conduct comprehensive “investigation and research” and listen to the public to uncover the sources of problems at local levels, with special attention being paid to social stability, party governance and the legal system. Photo: Xinhua

Published: 3:41pm, 9 Apr 2024Updated: 4:53pm, 9 Apr 2024

Some local governments in China have been fabricating the number of businesses in their regions – a key indicator of economic recovery – and in one case set hard targets for towns to register fake businesses, the country’s top anti-corruption watchdog said on Monday.

In an official notice, the Central Commission for Discipline Inspection (CCDI) listed the targets as one of three classic examples of “formalism” that added to the burdens of grass-roots officials.

In the central province of Shanxi, for instance, the commission said that in 2022 and 2023, some counties set hard business registration targets for towns and districts. These local governments would then be evaluated annually based on the number of business entities they had added in their respective areas.

Under pressure from their superiors, the local governments “mobilised” residents to create fake business registrations, some of which would then be cancelled after the annual county evaluations, according to the notice.

In one extreme case, an individual registered more than 20 bogus businesses, the CCDI said.

The surge in business registrations came as Shanxi offered financial assistance and various marketing platforms to help business owners recover from the economic damage caused by Covid-19 and sweeping pandemic restrictions.

Last October, Shanxi provincial officials announced that 68,000 new business had been registered in the first nine of months of 2023. The province pledged to support the “excellent trend” with further support for tourism, innovation, and rural and agricultural development.