The United Nations 2030 Agenda for Sustainable Development covers 17 goals, the 16th of which is “Peace, Justice and Strong Institutions,” namely: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

Under this major goal, there are 12 targets, the 16.6 of which is “By 2030, develop effective, accountable and transparent institutions at all levels.”

● Current Situation

The World

The latest global assessment of the transparency of national budgets

The Open Budget Survey is the world’s only independent, comparative assessment of transparency, oversight and participation in national budgets. The latest round of the biennial survey assessed 125 countries, which are home to 7.5 billion people (95% of the world’s population) and encompassed budgets totaling more than US$33.5 trillion in spending in Fiscal Year 2022.

Graph: Open Budget Survey 2023

This latest round of the survey found a modest one-point increase in global budget transparency scores compared to the previous round. However, countries are not sufficiently transparent and accountable about how they are managing their debt or spending on important social sectors, like health, sanitation and other services.

Participation practices are still nascent, although 83% of countries have at least one mechanism for the public to engage in the budget process. Less than a third of line ministries invite people’s input into sector budgets, compared to a little under three-fifths of finance ministries and legislatures. 

Source: Transparency International

China

Government ‘money bag’ transparency push gathers steam

On April 2, 2024, the Ministry of Finance released the “2022 Local Budget and Final Accounts Openness Ranking List,” with Guangdong, Henan and Hunan ranking in the top three. This was the seventh time that the Ministry of Finance had conducted a nationwide inspection of local budget and final accounts since 2015. The disclosure of budgets and final accounts is essentially the transparency of government behavior. How much the government earns, how much it spends, where the funds are invested, and what effect the spending has all reflect whether the government has fulfilled its duties and responsibilities, and are also related to the vital interests of the people.

Table: Produced based on public data from the Ministry of Finance

The inspection results show that all local governments at all levels disclosed budgets and final accounts that should be disclosed in 2022. Specifically, there are 254,600 and 254,700 local departments at all levels that should disclose their budgets and final accounts, respectively, and six and eight departments have not disclosed their budgets and final accounts, respectively.

There are 346,800 and 321,100 units affiliated to local departments at all levels that disclosed their budgets and final accounts in 2022, with disclosure rates of 99.92% and 99.95%, respectively. Full disclosure has been basically achieved.

The Central Economic Work Conference proposed that a new round of fiscal and taxation system reform should be planned. Improving the modern budget system is a must, and enhancing fiscal transparency is one of the important tasks. By promoting the disclosure of budgets and final accounts, better strengthening budget management, optimizing resource allocation, hardening budget constraints, and strengthening external supervision, the government will operate more transparently and efficiently.

Source: Xinhua News Agency, Economic Daily

Shenzhen tops local government transparency index

On May 20, 2024, the Institute of Law of the Chinese Academy of Social Sciences and the China Social Sciences Press jointly released the “China Government Transparency Index Report (2023).” The report shows that compared with 2022, the overall government transparency work of local governments in 2023 has made significant progress. Among them, the total score of the transparency index of the Shenzhen Municipal Government is 85.50 points, ranking fourth among 106 prefecture-level cities.

At the same time, among the 120 county (county-level city, or district) governments, the total score of the transparency index of the Luohu District Government, Shenzhen is 76.43 points, ranking seventh, one place higher than the previous year.

Photo: Shenzhen Economic Daily

Source: Shenzhen Special Zone Daily

● Cases

The World

World Bank develops data tools to strengthen accountability in public procurement

Photo: Pixabay

A prototype of a global Procurement Anticorruption and Transparency (ProACT) platform was developed by the World Bank in collaboration with the Government Transparency Institute (GTI). The platform collects, harmonizes, and analyzes open data from national eGP systems from 46 countries and open data on World Bank and IDB financed contracts for over 100 countries.

ProACT enables the analysis of data related to over 21 million contracts, more than 5 million suppliers and almost 1 million buyers. It allows to identify markets, buyers, and contracts with high integrity and transparency risks, and to compare integrity and transparency in public procurement between countries.

ProACT demonstrates the power of open data and data analytics to strengthen the accountability of public procurement, and to guide policy reforms to address corruption risks in this area.

Source: World Bank Blogs

Laconic and Surge collaborate to enhance carbon market efficiency and transparency

Photo: Carbon Credits

SADAR NCM platform uses the Laconic Universal Carbon Identifier (LUCID). It is a groundbreaking initiative establishing the first globally harmonized record of carbon credit issuance in the industry. This unique identifier code serves as a reference point, linking each carbon credit to its distinct geospatial data, physical provenance information, jurisdictional compliance confirmations, and additionality activity.

Much like an ISIN (International Securities Identification Number) serves as a globally harmonized identifier for financial securities such as stocks and bonds, LUCID provides a standardized framework for tracking and verifying the origins and attributes of carbon credits.

Emsurge Limited, a UK-based SaaS company, specializes in digitalizing traditionally opaque brokered environmental product markets and captures live market data from hundreds of carbon projects worldwide. Laconic’s collaboration with Emsurge heralds a new era in carbon market transparency and efficiency. Together, they aim to enable governments, corporations, and financial institutions to engage equitably in carbon trading activities globally.

Source: Carbon Credits

China

People’s Bank of China promotes transparency of beneficial ownership

With the approval of the State Council, the People’s Bank of China and the State Administration for Market Regulation jointly issued the “Beneficial Owner Information Management Measures,” which will come into effect on November 1, 2024.

Promoting the establishment of a filing system for actual beneficial owners can more clearly reflect the equity structure, ultimate control and income of enterprises and other entities. More importantly, it can improve market transparency, enhance information symmetry and mutual trust among business entities, improve transaction security and efficiency, and further optimize China’s business environment.

From an international perspective, the centralized filing of beneficial owners has become an international standard requirement and international practice. The Group of Twenty (G20) has been promoting the improvement of beneficial ownership transparency. The World Bank has listed the beneficial ownership registration system as an important indicator for business environment assessment, and the Financial Action Task Force (FATF) has also listed it as an important indicator for international anti-money laundering assessment. At present, all major economies in the world have established this system.

Source: People’s Bank of China

Asset management sector strengthens supervision towards ‘strong information disclosure’

In 2024, the National Financial Regulatory Administration issued the “Asset Management Product Information Disclosure Management Measures (Draft for Comments).” The recipients include seven trust companies, eight wealth management companies, five insurance asset management companies, as well as the China Trustee Association, the Insurance Asset Management Association of China, the China Banking Association, China Trust Registration Co., Ltd., Banking Wealth Management Registration and Custody Center Co., Ltd., and China Insurance Asset Registration and Trading System Co., Ltd.

The “Draft for Comments” specifies the relevant requirements for information disclosure during the fundraising period of products, including product sales documents, product instructions and special matters, performance benchmarks, risk disclosure documents, product investor rights and interests notices, product custody agreements, product issuance announcements or reports, and so on. At the same time, regulations are clarified for the information disclosure for the product duration.

Photo: Pixabay

For a long time, asset management products in China have suffered from insufficient standardization, unification, and transparency in information disclosure. In addition to the lack of unified disclosure channels, there are also differences between similar wealth management products in the performance display range, net value disclosure frequency, and valuation methods.

The new regulations fill the gaps in the regulatory system for the information disclosure of asset management products, help improve the standardization and transparency of products and operations, and promote asset management institutions to better perform investor suitability management.  

Source: China National Radio

● Background

Sustainable Development Goals (SDGs) initiated by the United Nations

On January 1, 2016, the 17 Sustainable Development Goals (SDGs), including 169 targets, of the 2030 Agenda for Sustainable Development — adopted by world leaders in September 2015 at an historic UN Summit — officially came into force. Countries will mobilize efforts to end all forms of poverty, fight inequalities, and tackle climate change while ensuring that no one is left behind.