By Shen Nianzu (沈念祖)
Issue 600, Dec 24, 2012
Nation, page 14
Translated by Dou Yiping
Original article:[Chinese]

Lately Professor Lin Jia (林家, a pseudonym) from Capital Normal University (CNU, 首都师范大学) has had to turn down many invitations from friends as he’s rushed to apply for research money.

From Jan 1, 2013, all municipal budget units in Beijing will have to begin using official credit cards for making business-related purchases. The policy is aimed at preventing corruption. 

“Quite frankly, cash reimbursement equates to putting research funds in your own pocket,” Lin said. He wants to finish his applications before the new policy is implemented.

On Dec 17, the Finance Bureau of Beijing Municipality announced the new policy, which permits 17 kinds of expenditures on the card, including printing fees and traveling expenses.

Zhong Ming (钟鸣), a procurator from the Haidian District Procuratorate (海淀区检察院), noticed that spending on scientific research is usually paid by cash, so it’s difficult to check the authenticity of expenditures. According to Zhong, the use of the official credit card simplifies the payment procedure and increases finance transparency. With the card, the bank can send itemized bills back to the budget units through the China Union Pay (中国银联) network.

Foreseeing “trouble,” Lin is hastily applying for a project that he’s doesn’t actually need to start until 2015. “If I don’t apply now, I’ll have to provide details for whatever I buy for the project,” he says.  “Office supplies, travelling… there are clear distinctions. Apart from those, I won’t be able to apply for any other funds.”

The system has actually been on trial at 100 units in Haidian District since April 2010, but the card’s use has mostly been optional so far. A professor at the Chinese Academy of Governance (国家行政学院) said that he has the card but rarely uses it. “During the transitional period, both ways are available. So people absolutely prefer the cash,” he said.

By the end of 2011, over 900 municipal and county budget units, 23 sub-districts and two rural towns around the nation had begun to implement similar systems with over 7,100 cards issued.

However, behind the figures there’s been reluctance to actually use the cards. Shi Zhengwen (施正文), head of the Center for Fiscal and Tax Law Research of China University of Political Science and Law (中国政法大学财税法研究中心), says the lack of enthusiasm can be attributed to the fact that people can no longer get unfair benefits from loopholes. “How can we stop corruption simply by using official credit cards?” asked Shi, “To some extent, they can regulate improper payments by clarifying the flow of funds.”

Zhu Lijia (竹立家) from the Chinese Academy of Governance believes that with so many different bureaus controlling money flow, the cards may become a mere formality.

Shi Zhengwen agrees, saying that going from cash to card is basically just a change of payment methods. To make sure that every cent of the taxpayers’ money is used properly, the democratic principles of budgeting, financial disclosure and effective oversight are crucial.