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Chinese police chief fired over property scandal

By Peter Shadbolt, CNN
February 6, 2013 -- Updated 0827 GMT (1627 HKT)
China's expanding economy has fueled a huge uncontrolled construction boom in recent years.
China's expanding economy has fueled a huge uncontrolled construction boom in recent years.
STORY HIGHLIGHTS
  • Chinese police chief dismissed over probe into properties
  • Allegations center on a portfolio of 192 houses in cities in Guangdong province
  • The scandal follows similar cases of corruption involving fake IDs
  • China's overheated property market has become a focus for speculators

(CNN) -- A police chief who allegedly used a false identity to buy as many as 192 houses in cities in China's southern province of Guangdong has sparked outrage on social media amid a growing scandal over corrupt officials amassing fortunes on the inflated property market.

Zhao Haibin, a senior police official in Lufeng in the southern province of Guangdong, had been accused by a local businessman of using a fake ID on company documents to acquire the properties, the Guangzhou Daily reported.

"A police official openly had two IDs and used the other one to do business and cheat others. Why (does) nobody probe the case?" local businessman Huang Kunyi was quoted as saying on state-run China Daily.

Zhao acknowledged possessing double IDs - known as hukou in Chinese - but denied having 192 houses, Xinhua reported. He was reported in Chinese media as saying that he was managing the properties on behalf of his younger brother.

Authorities told Xinhua that Zhao -- who is also a local Communist Party official -- had had the fake ID revoked and that he had been dismissed from his post.

Properties are forever in the hands of a tiny number of people
Chinese netizen

The case has drawn a sharp response on China's lively social media.

"(I) finally realized that in China, properties are forever in the hands of a tiny number of people," a user of China's Twitter-like Sina Weibo was reported as saying.

The case follows other high-profile instances of high-ranking officials using fake IDs and their positions to speculate on China's overheated property market.

On Monday, police arrested Gong Aiai -- a bank official from a rural bank in China -- who allegedly built a real estate empire worth at least $160 million using fake IDs and graft.

Dubbed "House Sister" in the Chinese media, Gong allegedly used three false national identity cards to buy 45 properties in three cities, 41 of which were in Beijing where China's expanding property bubble is at its hottest.

The high-profile cases have captured the public imagination in a country where national identity cards limit the number of apartments a person can own -- part of a policy to cool China's rampant property market.

The use of fake IDs also points to corruption among the police who issue the cards, and authorities have detained four police officers on suspicion of helping Gong obtain the cards, the Ministry of Public Security said.

There are fears the abuse of hukou - which registers a person place of residence in China - and the ID system may hamper the government's fight against corruption.

"It could also provide the chance for officials fleeing abroad to use a passport registered with a fake ID card. Officials, with their real identities, have to hold official passports that would leave behind records for police," Fang Qiongming, a police officer from the city of Jieyang's public security bureau, told the Global Times.

The cases have also highlighted the precarious role of construction which has come to dominate China's economy, accounting for roughly 25% of all activity and 15% of all jobs.

The injection of stimulus money following the 2008 financial crisis has led to the rise of newly built ghost cities -- satellite cities built without thought for any sustainable market -- as stimulus money finds its way into construction.

Analysts say that more worrying still has been the rapid expansion of China's shadow banking system.

Unorthodox loans, which often come in the form of trust loans and so-called wealth management products, have gone into fund real estate development and have been criticized for having short maturities that are difficult to roll over during times of financial stress.

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