Shanghai bans top officials' spouses from running businesses

[SHANGHAI] Shanghai banned spouses and children of senior officials from private business, making the Chinese financial hub the first to impose such strict controls over the family wealth of Communist Party cadres.

Spouses of ministerial and provincial-level officials are prohibited from starting companies or getting involved in any business operations, according to regulations passed Monday at the Shanghai municipal government's general meeting. Children of local officials and their spouses cannot conduct business within Shanghai's jurisdiction. China treats the municipality of Shanghai as a province.

The ban also applies to spouses of senior officials in the local judicial system, heads of the state-owned companies based in Shanghai and district party chiefs. Their children and children's spouses are prohibited from operating businesses in the areas or jurisdiction they oversee to avoid potential conflict of interests, according to the rules, which were published on the Shanghai government's official Weibo account.

The regulations were first approved in late February at a meeting of a top reform group led by President Xi Jinping. Mr Xi, who was briefly Shanghai party boss before he assumed the mantle of Communist Party chief in November 2012, named Shanghai as the first place to experiment with such restrictions in March at the National People's Congress.

Relatives of senior officials have great potential for rent-seeking and other forms of corruption, Shanghai deputy party chief Ying Yong said Monday, according to the Weibo posting. The rules aim to make clear that officials need to choose between keeping their jobs and making money in the private sector, Mr Ying said.

BLOOMBERG