In the wake of staggering revelations of corruption, high-ranking government officials, senior managers of state-owned enterprises (SOEs) and their families will undergo stiff checks when they leave China.

A recent report by the Ministry of Commerce estimates that 4,000 corrupt Chinese officials and SOE managers have fled overseas in the past two decades, taking some US$50 billion out of the country. Many of them are thought to have first sent their family members to study or live abroad before skipping the country themselves.

As a result, the government will take a closer look at any of their relatives heading overseas.

They will now be required to report their intentions before they leave, says Li Xiaowei, a researcher with the Taiwan Democratic Self-government League (TDSL).

He said the scheme currently applies to director-general-level officials in central government departments, county-level officials in local governments and SOE managers at the same levels. Violators are subject to punishment.

The Central Commission for Discipline Inspection of the Communist Party of China (CPC) and the Ministry of Supervision ordered a formal start of the pilot program in early July.

The action is based on a seven-point proposal submitted by the TDSL, one of China's democratic parties, at the Second Session of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the nation's top political advisory body.

Professor Yang Haikun, vice chairman of the Administrative Law Society of China, said imposing strict controls on overseas travel of government officials and their family members will play a key role in rooting out potential corruption.

He suggested the country's financial and banking authorities reinforce their anti-laundering work to curb growing capital outflow induced by corruption.

China's lax legal and management systems as well as the absence of an efficient control system on foreign exchange movements are blamed for the illegal capital outflow.

The Ministry of Commerce report said corrupt officials and some private firms used companies registered in offshore finance centers, such as the British Virgin Islands and the Bahamas, to transfer capital illegally.

China has problems in extraditing officials suspected of corruption because it has extradition treaties with few countries. Although the nation is working to improve judicial cooperation with other countries and the Interpol, only a small number of suspects have been arrested and returned.

Most of the corrupt officials still at large abroad came from financial and banking sectors and SOEs, according to a recent article in China Comment magazine, published by the Xinhua News Agency.

Low-ranking corrupt officials usually flee to neighboring countries in Asia while higher-ranking ones often flee to developed countries.

(China Daily August 20, 2004)