Last year, the Communist Party's corruption watchdog the Central Commission for Discipline Inspection dispatched a team to Shanghai for a two-month investigation. It found family members of officials' relatives were using their connections to gain a business advantage.

"We shouldn't ignore this," Shanghai's Party Secretary Han Zheng said at the launch of the new scheme on Monday afternoon. "Our party would lose the public's trust and confidence."

However, some analysts are sceptical about how big an impact the new measures will have on officials' behaviour.

"It is very difficult to see this regulation being fully implemented," said Ren Jianming, director of the Clean Governance Research and Education Centre at Beihang University.

"They haven't said specifically which department will be in charge of it. For the regulations to work, a specific department must taking responsibility"

Mr Ren said the scheme's launch, which appeared prominently on the front page of the Communist Party newspaper The People's Daily, was "an image project."

"They want to attract the public's attention."

He expects other provinces and cities to follow with similar announcements.


The rules state that family members cannot register individual businesses or partnerships, invest in non-listed companies or register a business overseas while returning to China for business.

Spouses of officials are also banned from holding senior positions in a foreign firm. Family members who are currently breaking the rules must quit their roles or businesses immediately, the Shanghai government said.

Officials are required to report the business activities of their family and each year, one-fifth of those declarations will be investigated and verified.

Mr Xi first flagged the rules at the National People's Congress in March and said the government planned to test them in Shanghai and then roll them out across the country.

Shortly after he took office Mr Xi unveiled an anti-corruption campaign that has extended longer and captured more officials than most people expected. It has also had a direct impact on the economy, hitting gaming revenues in Macau and sales of expensive liquor and watches as the government looked to stamp out lavish banquets and gift-giving to officials.

Mr Ren warned that if the new rules in Shanghai were "not well-executed," it would affect the Party's standing.