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China / Government

SOEs no longer above investigation

(Xinhua) Updated: 2015-03-17 19:40

BEIJING - The fall of an automaker supremo and an oil giant's chief proves that China is taking its fight against corruption to the C-suite and deepening reform of state-owned enterprises (SOEs).

Graft investigations into Xu Jianyi, chairman of FAW Group, and Liao Yongyuan, general manager of the China National Petroleum Corporation (CNPC), were announced shortly after the country's annual parliamentary session closed with lawmakers applauding the anti-corruption campaign initiated when Xi Jinping took office as Party chief in late 2012.

SOEs play a leading role in the Chinese economy. However, corruption has become a major enemy to their development. To revitalize these enterprises, it is essential to oppose their executives' pursuit of personal gains as it hinders healthy operation of the market economy.

Both FAW and CNPC hold a monopoly in their respective sectors, a status full of graft risks including embezzlement of public assets, as it lacks external scrutiny.

The Communist Party of China's top anti-corruption agency has inspected 26 SOEs so far in 2015. Two weeks after inspectors marched into CNPC headquarters on March 1, Liao was publicly placed under investigation.

He has been an oil mogul for three decades. Xu, the son of a FAW mid-level executive, has similar experience. Their fall came hot on the heels of that of Song Lin, former chairman of China Resources. The three built their kingdoms via monopolies and corruption.

Even more shocking are the signs of how systemic the corruption has been in these SOEs. More than 40 CNPC executives have been dragged under the graft microscope since March 2013. Counting Liao, five of the nine members of the executive board have been subject to investigation. Jiang Jiemin, former head of the State-owned Assets Supervision and Administration Commission, has also been investigated for graft found during his tenure as CNPC chairman. And before Xu's fall, there were many scandals involving FAW executives' conduct.

A clique culture has become deep-rooted in some SOEs, creating the soil for collective corruption, especially in monopolized sectors such as oil.

With the crackdown reaching deeper into SOEs, more than 70 executives were investigated last year. Chinese anti-corruption chief Wang Qishan has vowed that all SOEs will be inspected in 2015,

If executives continue exercising power capriciously, they will surely pay a heavy price.

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