Chart: Commerce Ministry’s Revolving Door With Business

A surge of resignations at China’s commerce ministry in recent years has aroused concern in and outside the government as some public servants have jumped to well-paying private companies supervised by their former employer.

Inspectors deployed by the Communist Party urged (link in Chinese) the Ministry of Commerce to “seriously analyze and solve” the brain drain problem. The party inspectors made the statement at a meeting in late July after completing a three-month disciplinary inspection at the ministry earlier this year.

The ministry, which is in charge of advancing domestic and foreign trade, had seen 142 officials resign over the past nine years, or nearly 16 a year on average, according to Caixin’s calculations based on annual data released by the ministry. From 2014 to 2016, the number of resignations picked up further, rising to nearly 27 a year on average.

Even though the number of resignations is not large when compared with the number of employees that the ministry hires each year, the phenomenon has raised public curiosity. That’s because some former ministry employees went on to work in the same booming industries that they had once overseen.

Cui Shufeng, for example, a former deputy head of the enforcement division of the commerce ministry’s anti-monopoly bureau, left his government post in 2014 and joined technology giant Tencent Holdings Ltd. the next year. Other internet and technology firms that have hired former commerce ministry officials include e-commerce giants Alibaba Group Holding Ltd. and JD.com Inc.

This government-industry revolving door has raised concerns over potential conflicts of interest between the regulator and the regulated.

According to China’s Civil Servant Law, officials in positions of leadership who resign or retire are not permitted to take jobs at companies or other for-profit organizations directly related to their former positions for three years. For those not in positions of leadership, the prohibition lasts for two years.

But the law neither defines the term “directly related,” nor does it mention the vetting process, leaving loopholes that make it possible to bypass the rules.

Contact reporter Lin Jinbing (jinbinglin@caixin.com)