Differing Accounts On Mine Divestiture....

China's mines, that I have dubbed as "Hellholes of Death," have been killing miners as unprecedented rates. Estimates approaching 20,000 mine accident deaths a year are incredible and China is feeling the heat to improve safety for the unfortunate people that work in the dangerous conditions. However, efforts had been confounded since many mines are small and owned, controlled or secretly controlled by local officials that have put their own profits over that of worker safety. Additionally, these officials have taken an active role in trying to deflect attention away from themselves as I wrote here.

Today's report in China Daily, details how a directive to report and sell off mine assets by government officials and executives of State Owned Enterprises has been successful.

Those who have withdrawn shares from coal mines include 3,002 civil servants and 1,576 heads of State-owned enterprises. They would be exempted from punishment, said Chen.

By October 20, 4,578 officials had reported investment in coal mines totaling 653 million yuan (US$80.5 million), said Vice-Minister of Supervision Chen Changzhi at a press conference.

Of the amount, 473 million yuan (US$56 million) has been withdrawn, Chen said, while summing up the two-month drive by four ministerial departments to clear collieries of officials' investment.

However, as I reported a while back, a Daily Standard commentary said,

But by the night of September 25, only 497 officials and SOE executives in nine provinces had agreed to give up their stakes in local coal mines, according to the State Administration of Work Safety, which oversees the execution of the State Council's order.

This figure is almost laughable, given that there are 24,000 small, privately run coal mines across the mainland. The administration itself estimates that "a considerable number of these 24,000 coal mines" have local officials as their shareholders.

So, according to the government, the divestiture has been a resounding success. However, this statement does not seem to hold much water when compared to some of the facts. Additionally, the government cannot be seen as failing in getting the officials and SOE executives to sell off their assets since this will show that the central government cannot control the local officials. I think that this issue goes a long way towards explaining the declaration of success found in the article.

But also, the Chinese people now have to hold the government accountable since they are declaring that the divestiture of the assets has been a success and this should lead to improved safety for the beleaguered mine workers. I think that this is highly unlikely and that the same dangerous practices will continue and that any decrease in the number of mine deaths will minor resulting from this policy without considerable further action.