Tough rules preventing the families of senior officials from running businesses were introduced in the city yesterday.
The trial scheme applies to the spouses, children and children's spouses of officials at the level of vice bureau director or higher.
It covers officials in city government, the Party, state-owned enterprises, city-level courts, procuratorates and public security bureaus.
City Party secretary Han Zheng said the rules will help tackle corruption, preventing officials from receiving kickbacks from businesses run by family members.
"Choosing to become a government official means a person can't run a business and make a big fortune," Han said.
"This is the bottom line," he added.
Under the rules, either family members should quit their business or the official should resign from their post.
The rules also stipulate that family members of senior officials cannot register individual businesses or partnerships; cannot invest in non-listed enterprises; and cannot register a business overseas while returning to China for business.
They also ban senior officials' spouses from holding senior positions in private enterprises or senior positions appointed by a foreign party in a foreign-invested enterprise.
And senior officials' children and children's spouses are not allowed to be involved in business in a region managed by the official.
Vice Party Secretary Ying Yong said Shanghai's regulations are based on previous bans on officials' spouses and children's business activities issued by central government.
The city's trial scheme is in line with central government regulations and the law, said Ying.
Combined with Shanghai's own situation, these create a practical and detailed model, added Ying.
During a panel discussion at the annual session of the National People's Congress in March, President Xi Jinping told Shanghai delegates that he required the city to test out these rules.
It is then planned to roll them out in the rest of China.
Under the rules, senior officials are required to report the business activities of their spouses, children and children's spouses, which the authorities will then investigate and verify.
Each year, the authorities will check the claims of 20 percent of officials who report that no family members breach the rules.
The discipline authority will also investigate tip-offs from members of the the public.
Officials failing to give a true report or not taking steps to comply will receive punishments, said officials.
Those believed to have broken the law will be dealt with by the relevant legal departments, they added.
