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China moves against bribery in construction sector

Transparency International hails the ground-breaking decision by China to blacklist construction contractors convicted of corruption and urges a strict implementation of the new rules

Transparency International (TI), the world's leading non-governmental organisation fighting corruption, welcomes the decision by the Chinese government to blacklist contractors convicted of bribery and ban them from working on construction projects in five provincial areas. According to a government circular cited by Xinhua news agency on 9 May, the pilot scheme will see a list of corrupt contractors drawn up and made available to local governments and those responsible for construction projects in five areas of China: the provinces of Jiangsu, Zhejiang, and Sichuan Province, Chongqing Municipality and Guangxi Zhuang Autonomous Region. The blacklisted firms will be barred from access to the local construction market either temporarily or permanently.

"China is leading the way in introducing international best practice into its tendering and project management anti-corruption systems," said Neill Stansbury, Project Director for Construction & Engineering at Transparency International (TI) UK, who took part in a recent TI anti-corruption mission to Beijing. "It was made clear to us during our visit to Beijing that the Chinese government is making the reduction of corruption in the construction industry a priority."

"Construction and engineering projects are a breeding-ground for corruption," said Liao Ran, Programme Officer for Asia-Pacific at the TI Secretariat. "Corruption is a major risk for China with a construction industry worth hundreds of billions of US dollars a year and rising," he added. The volume of government expenditure alone on public procurement in China jumped from 3.1 billion yuan (US$0.4 billion) in 1998 to 150 billion yuan (US$18.7 billion) in 2003. The country's rapid transition has resulted in huge investments in construction, which in turn has bred widespread corruption.

Since its entry into the World Trade Organization (WTO) in 2001, China has stepped up efforts to crack down on corruption. The blacklisting measure is a part of recent reforms in public contracting, including the establishment of an open bidding system and competitive construction markets at the local level. TI welcomes these new legislative and institutional measures and now urges the Chinese government to ensure that the new blacklisting rules are fairly and uniformly implemented, and that they are extended to all other Chinese provinces.

"The government's decision to debar corrupt contractors is a positive sign of China's willingness to tackle corruption," said Juanita Olaya, Programme Manager for Public Contracting at the TI Secretariat. "This should send a message to other governments and international organisations to introduce more effective and more transparent blacklisting systems."

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