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BEIJING -- Despite calls by the central government to curb rising real estate prices, prevent worsening pollution, end frequent coal mines disasters and halt official corruption, many local governments seem to be paying little more than lip service to these urgent issues that are blocking the development of a more harmonious society.

The public and political analysts have been advocating a "vertical integration" mechanism, or centralized management of public administration. The idea would be to allow the ministries of the central government to have direct control over their regional bureaus, many of which now take their orders from local governments.

A recent survey by China Youth Daily found that 85.9 percent of the Chinese public favor this so-called "vertical integration" as a way of checking corruption and dereliction of duty by local government officials.

Yet is this the panacea for a host of administrative problems? The case of Zheng Xiaoyu, former head of the State Food and Drug Administration (SFDA), might suggest otherwise.

Upon his appointment as head of the SFDA in 1998, Zheng initiated vertically integrated management as he restructured the administration. The changes were broad and seemed impressive. Technical standards were raised, lower-level officials were approved by the head office to avoid cronyism and budget controls were tightened. The changes made local SFDA bureaus subordinate to their higher level offices.

In 2002, the SFDA also adopted national standards in the certification of medicines, replacing a mishmash of local standards. All new medicines had to meet the same new standards before being approved for sale by the SFDA.

The new measures succeeded in preventing some profit-seeking local governments from meddling in medicine approval. But something seems to have gone terribly wrong at the highest levels.

The SFDA became so powerful while supervision of the power was weak. Many fake and substandard medicines it had approved reached the market. Some drugs ended up killing or harming people they were supposed to help.

Although details of Zheng's case have yet to be made public, the Central Commission for Discipline Inspection of the Chinese Communist Party said earlier this year "Zheng neglected his duty to supervise the drug market, abused the administration's drug approval authority by taking bribes and turned a blind eye to malpractice by relatives and subordinate officials."

It appears corruption at the national office of the SFDA was not isolated to Zheng. Two of his former secretaries also took bribes and put public health at risk. Hao Heping was sentenced to 15 years in prison for bribery last November and Cao Wenzhuang has been under investigation since January last year.

A Ministry of Supervision report said the scandal at the SFDA "had a vile effect...that threatened public health and tarnished the image of the Party and the government." TOO MANY LOOPHOLES

Vice-premier Wu Yi told a national conference on food and drug safety on Thursday that Zheng's case exposed at least five loopholes in the government's drug industry management system:

-- Laws and regulations on drug supervision and management are incomplete, and the government body has too much discretionary power to interpret existing laws;

-- No effective supervision mechanism has been established to check the SFDA;

-- In their efforts to "help drug companies", SFDA officials became too cosy with drug manufacturers and neglected their duty to safeguard public health;

-- The drug approval process is not democratic and not in line with scientific principles;

-- Appointments of lower-level officials are not made in line with democratic principles.

Wu's words can be boiled down to one political dictum: absolute power corrupts absolutely.

It matters not if the administration of government is vertically integrated or horizontally managed. An effective system of checks on the use of power must be implemented.

Without supervision, vertical integration simply narrows the number of officials unscrupulous businesses need to bribe.