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OO RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0695/01 1660611
ZNR UUUUU ZZH
O 150611Z JUN 07
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6172
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 GUANGZHOU 000695 
 
SIPDIS 
 
STATE FOR INL 
USPACOM FOR FPA 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI ECON CH
SUBJECT: Guangdong Discusses Anti-Corruption Efforts with Visiting 
USG Delegation 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly. 
 
¶1. (SBU) SUMMARY: The Guangdong government is targeting its 
anti-corruption efforts in the areas of land transaction and 
commercial development, according to Guangdong officials who met 
with a U.S. delegation from the bilateral Anti-Corruption Working 
Group.  China's largest construction bidding center, located in 
Guangzhou, has strict security procedures in place to insure that 
bid evaluators are not unduly influenced.  American lawyers in 
Guangzhou commented that corruption is still pervasive in the 
Chinese government owing in part to low salaries.  END SUMMARY 
 
¶2. (U) During a June 11-12 visit to Guangzhou, U.S. representatives 
to the bilateral Anti-Corruption Working Group met with officials 
from the Guangdong Department of Supervision and the Guangdong 
Procuratorate.  The group visited a construction bidding center, a 
real estate registration center, and a business registration center. 
 The group also met with AmCham members to discuss corruption in 
China.  The delegation consisted of David Luna, Director of 
Anticorruption and Governance Initiatives, INL; Cher Iannaccone, 
Financial Investigations Division, ICE, Department of Homeland 
Security; Taryn Nelson, Financial Crimes, TFFC, Department of the 
Treasury; and Joseph Gangloff, Deputy Director, Office of Government 
Ethics. 
 
Provincial Anti-Corruption Efforts 
---------------------------------- 
 
¶3. (U) Qin Tonghai, Deputy Director General of the Guangdong 
Department of Supervision (DOS), said 20,000 officials in Guangdong 
work either directly or indirectly for his office.  Guangdong DOS 
has conducted special campaigns to better regulate land compensation 
for farmers, commercial development, and government procurement. 
Qin said that by the end of 2007, Guangdong will have an electronic 
monitoring system in place whereby DOS can track and evaluate the 
work of government offices in the province's 21 cities in real time. 
 Lai Xiangdong, Deputy Director General of the Guangdong 
Procuratorate's Anti-Corruption Bureau, said his office handled 
1,398 corruption cases in 2006: 50 percent involved bribery, 30 
percent involved misuse of public money, 10 percent involved 
embezzlement of public funds, and the remaining 10 percent were of 
varying types.  He noted that approximately 80 percent of the 
Procuratorate's corruption cases end with punitive actions (usually 
prison). 
 
¶4. (SBU) Kong Xiangren, Deputy Director General of the Ministry of 
Supervision's Foreign Affairs Department, said China - unlike the 
U.S. - does not require officials to submit financial disclosure 
reports.  DOS and Procuratorate officials use tax records and other 
financial statements in their investigations, and require that 
suspects produce evidence to counter accusations of corruption. 
Kong said China is currently drafting financial disclosure 
regulations that will mirror those used in the United States. 
 
¶5. (SBU) In an informal bilateral dialogue, Qin and Kong also 
discussed ways for the PRC to intensify cooperation through possible 
joint workshops (e.g., through the APEC Anticorruption Initiative) 
and technical exchanges with the U.S. Office of Government Ethics, 
MOS, and the newly created state-level corruption agency (announced 
earlier this year by the CPC).  Qin also stated that the innovative 
preventive measures and IT systems that are being developed in 
Guangdong to prevent and detect corruption may become a model for 
the rest of China. 
 
Visits to Bidding and Registration Centers 
------------------------------------------ 
 
¶6. (SBU) The U.S. delegation visited a construction bidding center 
in Guangzhou that handles road, subway, building, electricity, and 
water projects.  The center is the largest in China in terms of 
transaction volume, and handles half of all bids in Guangdong, 
according to the director of the center.  To maintain the integrity 
of the bidding process, computers randomly select evaluators from a 
pool of 4,800 experts (who have outside employment).  If the 
evaluator is unable to take the job, the computer will select the 
next name on the list.  The experts are not allowed to contact 
anyone while they are reviewing bids; cell phones are confiscated 
and cameras monitor the rooms.  If the evaluation takes more than 
one day the evaluators must sleep in beds located at the center. 
The evaluators are paid RMB 500 (USD 65) per day for their service. 
Lin said the center is also developing a review mechanism to check 
 
GUANGZHOU 00000695  002 OF 002 
 
 
prior bids for improprieties. 
 
¶7. (SBU) The group also toured a new municipal real-estate 
registration center located in Guangzhou.  The center provides 
services related to land transactions, property registration, and 
auctioning.  Computer modules set up in the center give the public 
access to a real estate database.  The center's director said 
software advances have dramatically increased efficiency.  At a 
separate visit to a business registration center under the Guangzhou 
Administration of Industry and Commerce (AIC), the director said 
applicants can monitor the status of their cases on the internet. 
In response to a question, the director noted that the center's 
database does not link to other registration centers in China nor 
with law enforcement authorities.  (Note: Guangzhou AIC's business 
registration centers were a target of a television news program 
investigation earlier this year that showed officials were charging 
for unnecessary services.) 
 
American Lawyers Discuss Corruption in China 
-------------------------------------------- 
 
¶8. (SBU) During a meeting at the offices of AmCham-South China, 
David Buxbaum, an Amcit who has lived in Guangzhou on and off since 
1972 and currently works for an international law firm, said 
corruption in China is "endemic."  To reduce corruption, he said, 
China needs to increase the wages of civil servants (particularly 
judges) and professionalize the bureaucracy.  He said bureaucrats 
have too much discretion in their jobs, particularly those in the 
AIC.  Ultimately, the introduction of free elections beyond the 
village level would have a dramatic effect on corruption levels, he 
added.  Fred Hong, an Amcit who helped found the AmCham in Guangzhou 
and runs his own law firm here, said he is currently handling a 
business dispute case in which the judge has indirectly requested a 
bribe.  He said China is genuinely interested in fighting corruption 
and learning from the U.S. model, and advised U.S. officials take 
adopt a "face-saving" approach to discussions with Chinese 
officials. 
 
¶9. (U) This cable has been cleared by INL's David Luna. 
 
GOLDBERG