Personal assets data key to difficult reforms

China is to establish an information system for personal income and assets, according to the 35th meeting of the Central Leading Group for Comprehensive Deepening of Reform, a top reform policy generator, in Beijing on Tuesday. Legal Daily comments:

The system will record details of all the income and assets of each individual. It is to be a key part of the anti-graft institutions.

Currently, it takes tremendous efforts for the judicial departments to investigate the income and assets of suspected corrupt officials. Knowing that their assets and income will be under scrutiny, those power holders will have second thoughts before trading power for illegal gains, as it will be very easy to spot such ill-gotten gains once the system is in place.

The system, which will necessarily involve a huge database, updated on a timely basis, will also provide big data as a reference for the government to adjust tax policies. An important reason that tax has not played its due role in promoting social justice and fairness is that the rich have too much gray income and assets that can evade tax, while the incomes of poorer people are smaller and easily taxed.

China has the technology and policy tools for the construction of such an information system, and the time is ripe, since establishing a personal income and assets database will pave the way for some knotty reforms in related fields, which have so far not been initiated because of the lack of the necessary and accurate information regarding individual citizens.

The protection of privacy is one of the major challenges for such an information system, and the Central Leading Group for Comprehensive Deepening of Reform dedicated considerable time and energy at the meeting discussing the security of such an information system.