Corruption costs China $US35bn

The announcement is the latest indication of how widespread corruption has become among government agencies and how difficult it will be for Beijing to root it out.

The National Audit Office, which carried out the examination, did not disclose the size of the budgets reviewed this year. But the agency, which is based in Beijing, said it surveyed nearly 100,000 government departments and state-owned companies, and that more than 1000 officials were facing prosecution or disciplinary action because of the audits.

Auditors said government officials engaged in everything from money laundering and issuing fraudulent loans to cheating the Government through the sale or purchase of state land or mining rights.

”Criminals are now more intelligent, and covert,” Liu Jiayi, the director of the NAO, was quoted as saying.

Prime Minister Wen Jiabao hailed the work of the auditors on Tuesday and called on them to monitor government projects and prevent waste.

But analysts say the Communist Party faces big hurdles in trying to curtail corruption. Every year Beijing announces new anti-corruption drives, new laws and new policies aimed at dealing with the problem. But every year the scale of fraud seems enormous, particularly in a country where the average person earns less than $US50 ($A56) a week.

In 2005, for instance, the NAO reported finding about $US35 billion worth of government funds misused or embezzled. That was the last year the office gave a national figure covering its audits, according to its website.

Experts say the audits reveal one thing: many in government are finding ways to steal public money.

”The huge crackdown reflects the seriousness of corruption in China’s Government,” said Zhu Lijia, a professor of public policy at the Chinese Academy of Governance in Beijing. ”Even the NAO should be supervised. In the past few years it was the NAO that decided whether to publish or hide some statistics.”