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The Chen affair: How it highlighted blind spots in Beijing

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It is surprising, for example, that local governments can build massive power stations without the knowledge or approval of the central government. Yet in 2009 the China Electricity Council, the power sector's industrial grouping, estimated that 30 million kilowatts of installed capacity – half the electricity generated by the Three Gorges Dam – had been illegally constructed, without the necessary permission from the central government.

Local governments mislead Beijing

Central government officials are aware that their regional subordinates sometimes seek to mislead them. Three years ago the government began to suspect that provincial officials were exaggerating reports of their grain stocks so as to attract more of the money that Beijing pays granaries to hold reserves.

Beijing had to organize 100,000 inspectors for a three-month nationwide audit "to find out the true volume of our grain stocks," Vice Premier Li Keqiang said at the time. They found a number of irregularities.

Sometimes Beijing finds out too late that it has been tricked. Local officials in the eastern city of Changzhou, for example, evaded rules requiring them to seek government approval for any industrial project using more than 40 hectares (about 100 acres) of land by breaking up a planned steel mill into a dozen or so projects, each requiring only the sort of land-use permit that local officials could issue themselves.

The steel mill functioned for years before Beijing officials found out and closed it down.

This is not a new problem.

A well-known Chinese saying, that "the mountains are high and the emperor is far away," dates back to the 14th century, when China's imperial rulers already had trouble keeping an eye on their far-flung domains.

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