The Ministry of Finance and the central bank have required that
government departments and institutions subject to central
budgetary management use credit cards instead of cash when spending
public funds.
The two authorities have co-released interim rules on the
management of credit cards used by central departments and
institutions. The rules stipulate that expenses for travel,
conferences, entertainment and miscellaneous expenditures of less
than 50,000 yuan (US$6,600) should be settled with credit cards
designed for those departments.
Apart from making transactions more convenient, the move will
lead to a more transparent use of public funds, according to a
statement on the website of the finance ministry.
The new arrangement is already in use on a trial basis this
month in the Central Commission for Discipline Inspection of the
Communist Party of China, the Chinese Academy of Sciences and China
Soong Ching Ling Foundation, the statement said.
The new system will spread to all the departments and
organizations covered by the central budget by next year and
further to both central and local levels across the country by
2010, the finance ministry said.
Many organizations have been using cash for public procurements,
which has not only brought inconvenience, but made it hard to
supervise public spending, the statement said.
"It is likely to lead to the irregular use of public funds or
even corruption," it said.
The central government is not the only entity to have
experimented with such a system. Cities such as as Wuhan in central
China's Hubei Province and Shenzhen in south China's Guangdong
Province have also set up similar systems. Many provinces are
preparing implementation details, according to the finance
ministry.
In 2005, the Shenzhen-based China Merchants Bank and IT company
ZTE China co-issued the first such credit cards for government
organizations.
(China Daily July 27, 2007)