Exploiting the gray areas

As evidence of graft, he cited a current example from an official residence complex in an unnamed province. Only 28 percent of the houses in the complex were being used by incumbent officials, while the relatives of retired cadres accounted for 59 percent and the relatives of cadres who had been transferred to other localities accounted for 7 percent. The other two houses in the complex were too dilapidated to be occupied.

In under-regulated gray areas such as this, some local governments have bought prime real estate and donated apartments to newly arrived senior officials. Media reports have also disclosed purchases of clusters of villas.

When cadres are parachuted into posts in different localities, they are assigned new houses, but a lack of supervision and lax regulation mean they often make the properties their own by simply adding them to their personal portfolios.

"That sort of thing is not uncommon," said Wang. "These 'adoptions' reflect the exorbitant housing privileges enjoyed by officials and the resultant loss of public assets."

As a check against nepotism and corruption, officials are constantly reshuffled and moved around the country, but ironically the system provides the perfect conditions for them to amass property.

According to Yan Jirong, a political expert at Peking University's School of Government, "some corrupt officials get new houses when they take office in a new area, but they don't move out of the house assigned to them in their previous job. Thus, if they are transferred frequently, they can accumulate a lot of property."

Some officials pass their government houses onto their children when they leave office, or they sell or rent the properties on the open market, making large profits.

Wu Hui, an associate professor of governance at the Party School of the CPC Central Committee, said the extravagance and corruption displayed by some officials with respect to property have "tainted the image of Party cadres and government officials in the eyes of the public".

"The idea of an official residence system has an historical precedence. In ancient China, local bureaucrats and their immediate families lived in a residence attached to the yamen, the office where government business was conducted," he said.

The use of official residences is common practice overseas. In the United States, for example, accommodation is provided for incumbent senior officials, including the president, vice-president, state governors and vice-governors and the mayors of large cities.

In Germany, all senior officials, including the chancellor and government ministers, are provided with official residences, but only the chancellor is actually required to live in one. Ministers are free to choose where they live; in an official residence, in their own homes or in rented properties supported by a housing subsidy.

The common rule of thumb overseas is that official residences are owned and maintained by the state. Officials are only allowed to live in them during their period of office and are required to vacate if they resign, retire or are relocated.