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Shameful record of officials not paying debts
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A trapping of a modernized economy is the surge in cases that pit creditors against debtors over unpaid loans.
Most Chinese no longer shy away from suing debtors to get their money back. But when debtors happen to be government authorities, one is often advised against taking up the legal weapon, because the odds are stacked against him or her. Even if the court does rule in favor of the creditor, the debtors tend to stall on repayment.
That is what Wang Guangyuan found out after a 16-year odyssey demanding to be repaid the paltry money he lent to a local village committee — to no avail.
In 1998, Wang, a villager in Feidong County, Anhui Province, loaned 38,000 yuan (US$6,129) to the local village committee and wasn’t paid back the principal and interest as promised.
After several years of futile pleading and waiting, he filed a suit against the committee and won. Despite being partially repaid in 2010, he is still owed some money, the online edition of People’s Daily reported Thursday.
Whenever the committee cadres were shown the court verdict during Wang’s visits to demand payment, they turned him away with subterfuge or curt replies that the committee was cash-strapped.
The disingenuousness of their excuse is apparent given the fact that three former officials sitting on the committee in 2011 were convicted of embezzlement of up to 500,000 yuan in state allowances for rural households. Similar cases of defaults on debts abound. The one that made the most headlines recently also occurred in Anhui. In March, a construction contractor named Yang Yong in Xiao County tried to commit suicide by swallowing whatever pills he could find at home. He was rushed to the hospital and survived.
Predecessors’ debts
The reason for his failed attempt at suicide was that Yang was owed millions by the local government over a construction project he undertook years ago. Meanwhile, he had to face his own creditors who harassed him every day.
It was reported that the local officials were capable of repaying Yang, but decided not to do so because the debts were incurred by their predecessors, and also because of alleged irregularity involved in the particular project. Hence the prolonged delay in repayment.
Even if irregularity is confirmed, the blame lies less with Yang than with the very people who awarded him the project. And alleged irregularity is no justifiable pretext for withholding the money due to the contractor.
During their limited tenures, Chinese bureaucrats usually try to leave their marks by spending lavishly on vanity projects and leaving behind a financial mess to their successors, who are reluctant to pay off others’ debts with the funds at their disposal. It is the creditors who suffer as a result of this bad blood.
This lack of continuity in acknowledging and financing official debts has given rise to a host of disturbing tales about official deadbeats. In Hezheng County, Gansu Province, 26 government agencies had paid their restaurant bills with nothing but IOUs worth more than 600,000 yuan over the course of 13 years. And now officials refused to redeem the IOUs, citing leadership changes.
On the face of it, this episode is a typical illustration of how treacherous some of our civil servants are when it comes to honoring their financial obligations. It also hints at the absence of a “contract spirit” in many Chinese bureaucrats, that they have little respect for contracts.
A random Baidu search of government repudiation of debts — Baidu is China’s largest search engine — turns up page after page of results, signaling the gravity of the problem. What’s worse, officials’ debt burden is probably much greater than meets the eye, which their creditors choose to remain silent about in order not to encourage a default or spoil “chances for future cooperation.”
A civil servant friend who works for a Shanghai district government once told me that his employer outsourced some community work to a company, as part of a trend of government “downsizing.” But once the company did its job, the government refused to pay. Wary of ruffling the feathers of his debtors, the debt collector had to sugarcoat his pleas with blandishments lavished on officials.
As citizens we are often admonished by our government on the importance of respecting the cardinal rule of integrity, the cornerstone of a market economy. Yet it so happens that the very preachers of integrity often act in a way that runs counter to their professed beliefs.
Only when official deadbeats are made to pay can we hear less often of government’s shameless evasion of debts.
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