Billions Embezzled In China

Audits aimed at ferreting out corruption in China uncovered $8 billion in misused or embezzled funds and widespread irregularities that produced "serious losses" of state assets, the government said Friday.

Auditors investigated 130,000 state businesses and offices last year as part of the communist leadership's campaign against the pervasive graft that has soured public faith in the government.

Li Jinhua, minister of the State Auditing Administration, told officials attending a national conference Friday that government auditors found larger-than-reported losses in the accounts of the State Power Corp., the former national power monopoly that was dismantled last year.

Irregularities at the Industrial and Commercial Bank of China — one of the country's biggest state-owned banks — included housing and auto loans granted to organizations or individuals using false documents and excessive lending to local governments, Li said in an account posted on the audit office's Web site.

The bank suffered "serious losses" from illegal loans granted by staff and related companies, it said without giving figures. The report also cited a "big batch" of major economic crimes but did not elaborate.

Li has long criticized officials for diverting government subsidies and spending lavishly on offices, private villas and stock speculation, among other abuses.

As a result of the audits, $2.9 billion of the $8 billion in misused funds were returned to the government, and the cases of 749 officials were referred to prosecutors for criminal investigations, the audit office said.

In recent months, thousands of Chinese officials and managers of state companies have been punished in a renewed effort to root out rampant abuse of power.

But thousands more have evaded capture.

The Hong Kong newspaper Wen Wei Po, which is partly financed by the Beijing government, reported Thursday that 8,370 mainland officials were believed to have fled the country during the first half of last year and that another 6,528 had "disappeared" inside the country.

Another 1,252 committed suicide during the same period, it said.

The report did not cite its sources, but it provided details on the number of officials missing from each region; more than half were from the relatively affluent, freewheeling provinces of Guangdong and Fujian and from the central Chinese province of Henan.

Last year, Beijing signed a U.N. anti-corruption pact that may help it capture some of those fugitives. But the lack of extradition treaties with many countries, China's vast and porous borders and the easy availability of forged travel documents inside the country has hindered those efforts.

In the 2003 annual report of the worldwide corruption watchdog Transparency International, China ranked 66th, tied with Panama, Sri Lanka and Syria. That made it less corrupt than Egypt, but dirtier than Poland, at least according to the perceptions of those surveyed.