06/12/2012, 00.00
CHINA

Corruption spreading in China, Postal Savings Bank president arrested

The crackdown in China's banking sector continues. After the arrest of the deputy president the Agricultural Bank of China, the president of the Postal Savings Bank Tao Liming is placed under house arrest. He authorised too many unregistered loans with higher than normal interest rates. Party purges its Shandong branch, kicking out 102 members.

Beijing (AsiaNews) - Chinese authorities have arrested Tao Liming, president of the Postal Savings Bank of China (PSBC), on suspicion of economic crimes. This is but another scandal that hits the mainland's banking system. Two weeks ago, Yang Kun, an executive vice-president of the Agricultural Bank of China (ABC) was also arrested. All this is part of a campaign undertaken by the Communist Party and the central government to eradicate widespread corruption.

The Beijing-based PSBC is the nation's seventh-largest lender by assets. Chen Hongping, chief of an asset operation division, was arrested along with Tao. Both are said to be assisting investigations into suspected economic crimes.

Tao was placed under shuanggui, a disciplinary system for party members outside the legal system that is the equivalent of house arrest.

Sources said Tao and Chen were found to have issued illegal loans to clients to book unlawful gains and to have misused assets.

The PSBC has almost 3 trillion yuan in deposits. Its main business is extending loans to small businesses in rural areas, but it lacks a complete risk-control mechanism to ensure the safety of its assets.

Despite the crackdown, corruption in China remains endemic. Yesterday in Shandong, the Communist Party expelled 102 members for not properly registering with the party.

Of these, 68 were found to have violated the one-child policy. Rich Chinese are known to bypass this law by paying off officials.

Leaders in China's central government and Communist Party are conscious that scandals associated with party members are one of the main threats to domestic stability.

After decades of abuses of power, ordinary Chinese are no longer passively putting up with local party officials. From petitions directly presented in Beijing to street demonstrations, dissatisfaction is growing and even turning violent.

The party has launched various anti-corruption campaigns to re-establish morality in politics, but recent arrests show that they have failed so far.

Various analysts and dissidents believe that it is "impossible" to reduce corruption as long as the government is not placed under democratic control.

 

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