Public funds need stronger oversight

The government's management of public funds has been criticized for more than a decade by ordinary Chinese, many of whom feel shut out from their fair share of the country's wealth. Many see fraud and embezzlement of public money as widespread and implicitly tolerated by those in power.

Like taxes, paying into China's public funding programs is mandatory. But unlike taxes, public funds belong, at least in theory, to those who contribute to them. All too commonly though, such funds are squandered, embezzled or appropriated by authorities. In one particularly flagrant case, an official in Lanzhou was exposed for siphoning off some 100 million yuan ($16.33 million) from the local public housing fund. Stories have also surfaced of officials flushing away vast sums of public money on gambling tables in Macao.

Of course, a multitude of interest groups covet these funds for more legitimate reasons. Local authorities use these funds for low-cost housing projects, while securities regulators invest them into local stock markets. Unfortunately, reports suggest that most of this money is being deployed by a small, well-connected minority. Without third-party supervisors, this lack of transparency will only further erode the government's credibility.