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Corruption in real estate

0 CommentsPrint E-mail China Daily, October 8, 2010
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Of all factors behind the ever-rising housing prices, corruption should never be ignored. The fact that nearly 2,000 cases of corruption have been cracked in this area, from August last year to August this year, has justified the consensus that real estate has become a hotbed of corruption.

Nearly 200 officials above the county governor level were found to be involved in these cases. It is now quite common for a string of officials to be involved in a single case.

The abuse of power has resulted in a series of problems in the real estate market. When real estate developers bribe officials to get a piece of land for development, or bribe officials to get a housing project approved, or pay officials to get this or that done, they don't pay from their own pockets, they raise the housing prices so consumers pay for the bribes.

With a lot of money going into the pockets of these corrupt officials, real estate developers don't spend as much as they should on the construction of their buildings. They then bribe the supervisors into turning a blind eye to the poor quality of the houses. That is why real estate developers in some cities have been found using sub-standard re-bars or even bamboo as substitutes for re-bars to lower construction costs. As a result, some new buildings have quality problems, and complaints about housing quality have been on the rise in recent years.

So corruption has turned out to be one of the major problems seriously affecting the healthy development of the real estate industry and market.

The central government has realized how serious the problem is. It made the decision in August last year to implement a crackdown that would target corruption in this area for two years. Now more than a year has elapsed, and prosecutors have weeded out quite a number of bad apples. But it seems that the cases uncovered have become increasingly complicated and the amounts of money involved increasingly large.

There is enough reason to believe in the central government's unswerving determination to fight corruption. Yet, the complexities of the anticorruption battle, particularly in the real estate area, should never be underestimated. In addition to further intensifying the crackdown, the government must act to improve the transparency of business deals and to tighten supervision, so as to make the abuse of power much more difficult.

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