(March 8, 2010) A Chinese law school graduate recently sued China’s Ministry of Finance for denying his right, as a taxpayer, to information about the Three Gorges Construction Fund. This is the first time a taxpayer has challenged the Chinese regime.
Mr. Ren Xinghui, the lawyer, had asked China’s Ministry of Finance to publicize information about the Three Gorges Construction Fund, but his requests were denied because it “had nothing to do with him.”
In November 2009, prior to the lawsuit, the State Administration of Taxation issued an announcement declaring that the right to information is a taxpayers’ fundamental right. Now Mr. Ren is asking how the government spent the taxpayers’ money.
During a February broadcast for Sound Of Hope radio, Dr. Wang Weiluo, a renowned expert in water conservancy and environmental protection, currently living in Germany, gave details about the Three Gorges Construction Fund and how money for the project has been raised over the past 17 years.
According to Dr. Wang, a special tax was imposed by the State Council for the construction of the Three Gorges. The name of the fund actually came into being as early as 1984, but it was approved by the National People’s Congress in 1992.
For this, the world’s biggest irrigation project [Editor’s note: The Three Gorges project is a multi-purpose power, flood control, and navigation project. Irrigation was never listed as one of the dam’s functions], Chinese authorities increased everyone’s electricity bill to raise the money for the fund. This was a first.
In July of 1992, the State Administration for Commodity Prices issued a document which imposed an increase of .003 cents for every kilowatt-hour of electricity consumed nationwide for the Three Gorges Construction Fund. At that time, the State Planning Commission, the State Department of Energy, and the State Administration for Commodity Prices stated that that .003 cents could only be used for the construction of the Three Gorges.
However, by 1994 and 1996, the fee rose to .004 cents and .007 cents respectively. Currently, Shanghai, Jiangsu Province, and Zhejiang Province have the highest levy at 1.5 cents for every kilowatt-hour consumed, with Anhui, Hunan, and Hubei Provinces right behind at 1.3 cents. Although the increase seems very small, when multiplied by a population of 1.4 billion, the amount is sizable.
In 1993, the Three Gorges Construction Fund had reached 1.7 billion yuan (US$249 million. In 1994, 1999, 2003, 2005, and 2006, it was at 2.2, 5.2, 43.8, 62.3, and 72.7 billion yuan (US$322 million, $761.8 million, $6.42 billion, $9.13 billion, and $10.65 billion) respectively. At the end of 2008, a total of 1.071 trillion yuan (US$156.9 billion) was collected. If the data for 2009 is similar to that of 2008, we can say that 130 billion yuan (US$19.04 billion) was collected by the end of 2009.
According to the investment requirements of the State Planning Commission, if the interest return is 12 percent per year, the Three Gorges Project Fund owes 16 billion yuan (US$2.34 billion) to taxpayers; however, if the Chinese regime is collecting the fund as a special tax, they don’t need to repay the taxpayers anything at all.
That would mean that the taxpayers of China have donated 130 billion yuan (US$19.04 billion) without any payback.
The total investment in the Three Gorges’ Construction Project has been estimated at either 150 billion yuan or 185 billion yuan (US$21.97 billion and US$27.1 billion.If the total investment is, in fact, at this level, the Three Gorges Construction Fund makes up 70 percent of it. The Chinese government, however, usually says that the fund makes up 50 percent of the total investment.
When Mr. Ren sued the Chinese Ministry of Finance, an increasing number of Chinese people became curious about the status of the Three Gorges Construction Fund. In the past few years, corruption within the Three Gorges Project has been exposed.
For example, mainland Chinese media reported that Jing Wenchao, the manager of the Three Gorges Economic Development Corporation, had stolen 1.2 billion yuan (US$175.8 billion) from the Three Gorges Construction Fund and put it into his own overseas account.
Huang Faxiang, the manager of the Fengdu County Land Resources Bureau, embezzled 15 million yuan (US$2.2 million) from the Three Gorges Residents’ Relocation Fund. He was given the death penalty.
Dai Lansheng, the manager of the Gezhouba Three Gorges Industrial Company, spent 0.7 billion yuan (US$102.55 million) on foreign imports of junk construction equipment.
Wushan County, a model county for the Three Gorges Relocation Project, embezzled an average of 30 million yuan (US$4.4 million) from the Three Gorges Residents’ Resettlement Funds each year. The Wushan county head, Cai Jun, was murdered for hiding the wealth in his house.
If the total investment for the Three Gorges is 185 billion yuan (US$27.1 billion) and the Construction Fund covers 130 billion (US$19.04 billion), then 55 billion yuan (US$8.06 billion) needed to be collected by other means.
The Three Gorges Construction Project said itself that it still owed 50 billion yuan (US$7.32 billion), had collected over 20 billion yuan (US$2.93 billion) from the electricity fees, and received 5 billion yuan (US$732.5 million) from the Three Gorges Bond. If we add the figures up, they greatly exceed the total investment. So how was the Three Gorges Construction Fund spent? The Chinese government has never publicized how the Three Gorges Fund was spent.
Dr. Wang said if the Beijing Intermediate Court determines that the Ministry of Finance must publicize precise information about the Three Gorges Construction Fund, many more cases will arise and threaten the regime’s power. Therefore, their determination will not be just.
Dr. Wang thinks that this, the first instance of a taxpayer suing the government, is a learning experience. When people seek equality with the government, democratic reforms have begun.
Dr. Wang said that if Ren Xinghui can win this case, it will benefit every Chinese citizen.
Sound Of Hope Radio Network, March 8, 2010
Further Reading from Probe International:
- An interview with the man who sued China’s Ministry of Finance to safeguard Chinese citizens’ right to know
- An ordinary citizen probes Three Gorges Dam finances
- Researcher sues ministry over special utility fee
- Rule of law meets the Three Gorges dam
- Beijing resident sues the Ministry of Finance, requiring the disclosure of the Three Gorges dam cost
Categories: Three Gorges Probe