Most Chinese cities lack fiscal transparency

BEIJING - The majority of China's city governments lack fiscal transparency, keeping most of their financial activities from the public, according to a survey conducted by Tsinghua University.

Only seven of the 81 city governments surveyed by the Tsinghua research team met the basic requirements on fiscal transparency, according to the survey released Tuesday.

The survey examined the 2010 fiscal disclosures of four municipalities as well as 77 city governments in 22 provinces and five autonomous regions on eight criteria, including whether they had released information on government structures and functions, whether they had published 2011 budget reports and whether they had publicized their final accounts for 2010.

"City governments were not as transparent as people expected," said Yu Qiao, professor of economics in the School of Public Policy and Management at Tsinghua University, as well as the head of the research team.

Beijing topped the fiscal transparency ranking, followed by Shanghai, Nanyang and Chengdu, while Baotou, Qingyang and Shihezi were among the lowest-ranked city governments.

The survey showed that per capita GDP, foreign trade dependence and the educational background of top city officials were three main factors influencing city governments' fiscal transparency.

"The higher the per capita GDP and the larger the foreign trade dependency cities have, the more transparent their finances will be," Yu said.

"Top city officials with formal college degrees are more inclined to support information disclosure," he said.

Most of the surveyed city governments did a good job of publicizing budget information, but only a few released their final accounts.

However, none of the 81 cities surveyed publicized their extra-budgetary expenditures, according to the survey.

In recent years, the country has taken steps toward greater transparency in public spending.

The central government and its departments have started publicizing their budgets for vehicle purchases and maintenance, overseas trips and official receptions, or what some call the "three public consumptions", as part of their efforts to improve transparency.

Last month, the general office of the State Council, or China's Cabinet, issued a document requiring governments at all levels to disclose information concerning the fiscal budget, affordable housing, food safety, environmental protection, land requisitions and housing demolition in a more transparent manner.

Premier Wen Jiabao has said on several occasions that the government should create conditions that allow people to criticize and supervise the government.

"Only when governments' fiscal revenues and expenditures become transparent can people really supervise the government," Yu said.

Due to different statistical methods, there has been a great disparity between various government departments' expenditures on the "three public consumptions".

For example, the State Administration of Taxation spent 665.87 million yuan ($105.69 million) on official receptions in 2010, while the Development Research Center of the State Council's spending on the same item stood at just 58,400 yuan.

"The data can not be compared and analyzed since they were not collected in the same method," said Ye Qing, deputy head of Hubei Provincial Bureau of Statistics.

"For true fiscal transparency, governments should not only release final results, but also publicize their calculation methods," Yu Qiao noted.