The Importance of Corporate Governance in China
As the world recovers from the world crisis that hit it at the end of the year 2007, China is facing another duty of combating the corruption levels in the country. This is mostly in the public sector as well as the private sector. It is estimated that over 10% of the contracts by the government are influenced by bribes and kickbacks. According to the Transparency International corruption index, China recorded a 3.6 index and ranked number 79 out of 180 countries. There are various ways that the country has put in place to cure this trend.
Addressing Public Deficits:
The greatest percentage of corruption happens in public institutions as organized groups or as individuals. There is a need to address these institutions to reverse the trend. There are three areas that need to be addressed to tackle the issue of public deficit. There are powers concentrations in one area and thus the individual or small group can engage into contracts without much of consultations. The few individuals could thus engage in a “safe” corruption deal and detecting becomes hard.
To curb this area there was the decentralization of power and the contract are now approved in various departments also anybody who came to contact with the contract is held responsible. In some areas, the contracts are given out by private bodies on behalf of the government and the contracted party becomes answerable to the government. All contracts are supposed to be publicly advertised in the local dailies as well as in the government gazette.
Secondly, there is the lack of effective checks and oversights, checks and balances have also been a weak area that the corrupt used to walk free after a corruption deal. One of the ways to enhance efficiency is the use of computers to do various activities. In case one has approved a deal, the computer has a record of checks and balances. One of them is to spread responsibility whereby after a contract has been created by one office, there is the office to approve and finally, there is an office to verify. All these are meant to ensure that the laid down procedures and requirements of contracting are adhered to before the deal can be (initially) approved.
There is the issue of the obsoleteness of the system and obsession for government approval. This is another area that has made the corrupt individuals to align themselves in public offices and thus able to engage in deals. The most effective way that the government has embarked on is to vet the public office holders. They are vetted by independent bodies; there is the enlightening of the general public on the ills that corruption brings in the country and thus when they are voting for members of parliament and the president they consider the corruption background of the individual concerned.
Finally, there is the punishment of offenders. The offenders are punished in accordance to the law that recognizes corruption as a criminal felony punishable by the law. Those holding public office are not spared by this and are publicly announced in the media as being corrupt; they are required to give back all that they had defrauded the government, leave the office and finally face the law. The police have also been targeted since they have been the most corrupt when petty bribes are concerned. There are police reforms and public awareness of their rights.