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No profit for gov't
2004-06-11
China Daily
Local governments should function for the benefit of the public; they should not, under the excuse of "operating cities," take advantage of their positions to seek profits from commercial activities, according to an editorial in China Economics Times. An expert follows:
Recently, some local government departments have been selling public resources, such as land, under the slogan of "operating the city" for the sake of their own profits.
Such a practice can distort the role of the government and affect market order, said Fan Hengshan, an official from the National Development and Reform Commission.
In a market economy, the government is the largest non-profit organization. Its major responsibility should be to create a fair and accommodating environment for economic development and to provide services to market entities.
According to Fan, however, some local governments are "pulling down residential housing and selling land" in pursuit of profits.
They acquire low-price urban or suburban land presumably for urban construction for the benefit of the general public, but then sell the land to developers at a much higher price.
It has been reported that profits gained from selling such land accounts for more than half of local fiscal revenues in some places.
This goes against the service-oriented role of government.
It is this pursuit of profits that has driven some local governments to "operate their cities" for financial gain by using unfair means.
There has been an increasing number of cases in which the rights and interests of citizens have been infringed upon by government-directed land acquisitions and reallocations.
According to the country's Constitution, a government can only requisition land for public needs and at fair market prices.
Commercial land development is the business of developers and land users and should be done through fair negotiation. The government should not intervene, let alone profit from land development.
Government financial resources should come from public revenues, not from commercial activities in which the government intervenes. It should place itself in an unbiased position.
It is totally wrong for governments to "operate cities" for profit.
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