I described in Chapter 19 of the expanded 2nd edition of my book Tiananmen’s Tremendous Achievements Chinese President Xi Jinping’s creation of awe in its anti-corruption storm, but it seems the awe has not spread to China’s financial sector until now.
In its report “Foreigners drawn in as fear and loathing grip China’s finance industry” today, Reuters gives a vivid description of the awe Chinese President Xi Jinping has recently created in China’s financial sector. The following is the full text of the report:
Foreigners drawn in as fear and loathing grip China’s finance industry
A widening regulatory probe into some of China’s biggest brokerages has set nerves jangling in a financial industry still recovering from a summer of turmoil, with fear of becoming entangled in investigations spreading among foreign investors.
People working at domestic securities firms report an ugly mood after news in the past week of increased scrutiny of the sector by authorities. A nervous inertia is slowing new business as staff are encouraged to report their bosses or colleagues for corruption.
“It’s creating a very dog-eat-dog environment,” said a partner at a Chinese mutual fund. “People collect evidence on their bosses, because if they get rid of their boss, it means that they can get promoted faster.”
Foreigners operating in China or investing in the mainland through Hong Kong are also worried about becoming entangled in the widening regulatory net.
“Everyone is absolutely terrified of China,” said a director at an international brokerage in Hong Kong, echoing the sentiment of many in the industry contacted by Reuters. Most did not want to be identified due to the sensitivity of the issue.
The crackdown on the securities industry – from hedge funds and institutional fund managers to brokers and banks – began after the mid-year equity market crash wiped around 40 percent off mainland share prices, which Beijing blamed partly on “malicious” short-selling and insider trading.
Even though domestic stock markets have rebounded steadily by about 25 percent since the pit of the crash in August, market executives say the regulatory atmosphere has not relaxed.
Authorities have revealed little about the specific reasons for the probes, but three sources told Reuters they believed some of the investigations involved suspicions of insider trading relating to trades by China’s “national team” – the big brokerages and fund managers dragooned into buying stocks as part of unprecedented measures to prop up the market.
Chinese shares tumbled more than 5 percent last Friday, the biggest one-day drop since the nadir of the summer rout, after Reuters reported the country’s fourth-biggest brokerage was under investigation.
The launch of a probe into China Haitong Securities added to investigations by the China Securities Regulatory Commission (CSRC) into bigger rivals CITIC securities and Guosen Securities.
Haitong, along with Guotai Junan Securities, is also being probed by anti-corruption investigators, state-run news agency Xinhua said. Bloomberg reported on Friday that a former Beijing police chief who put away one of China’s top Communist Party officials has been put in charge of the corruption campaign of the securities industry.
“They put a notice on all the floors with the number that you can call anonymously to encourage people to dial in. They say they just want people to report corruption,” said a source at Guotai Junan.
Guotai Junan, CITIC and Guosen did not respond to requests for comment and a Haitong spokesman referred Reuters to the company’s public statements. CSRC and anti-corruption authorities did not respond to requests for comment.
Brokers, consultants and lawyers said foreign investors operating in China were becoming increasingly reluctant to speak publicly on market issues in case they attract adverse attention from regulators.
While they welcome the need to investigate and prosecute rule breakers, they say a lack of legal recourse in China creates the fear about being caught up in the net. When authorities call executives in, they say they are never sure if they are being asked to help with enquiries or are under suspicion and when they might be released.
A lawyer who has assisted foreign firms caught up in the probes said some were introducing new onshore compliance programs, although that did not guarantee keeping out of trouble.
“You can’t ‘comply’ because there is no rule of law,” he said. “The best thing you can do is establish processes for who is likely to be taken away, and how to make sure they aren’t disappeared forever.”
Chinese corruption investigators typically cast a wide net, often dragging in dozens of the primary target’s business associates. That unnerves many investors.
“Until very recently, if you wanted to advance your business on the mainland you had to have certain key relationships, but yesterday’s super-asset can quickly become today’s liability,” said Steve Vickers, CEO of Steve Vickers and Associates, a political and corporate risk consultancy based in Hong Kong.
Another consultant said he had even been asked by foreign investors about the feasibility of hiring a mainland “puppet CEO” who would take instructions from offshore but be on the hook for any investigation.
“But no-one is stupid enough to agree to that,” he added.
THERE WILL BE BLOOD
On Sunday, CITIC, Haitong and Guosen all confirmed they were being investigated by the CSRC over suspected rule breaches. Haitong’s chairman was quoted by the official Shanghai Securities News saying it will tighten risk controls and make strict checks on clients.
The brokerages have said they are operating normally, but several industry sources said the investigations were having a chilling effect.
“At the moment, if you don’t do what the CSRC asks you to do, there will be blood,” said a source at a large U.S. hedge fund operating in China.
Shen Weizheng, an asset manager at Shanghai-based Ivy Capital, said he had planned to launch an overseas investment fund in co-operation with CITIC Securities, using the brokerage’s cross-border swap business. But regulators suspended the over-the-counter swap business out of the blue.
“I signed the business agreement last week and submitted it to CITIC for approval. Now, the business is suspended,” he said. “I’m very disappointed.”
More complicated structured products or innovative financing have been most impacted, said a source at top-five bank leasing company, as firms seek to avoid scrutiny while regulators pore through records.
“We want to remain low-key right now, don’t want to bring trouble on ourselves,” said the source. “Everything will start up again, though, as soon as they leave.” ($1=6.3986 yuan)
(Reporting by Engen Tham, Michelle Price, Samuel Shen, David Lin and Watson Zhang; Writing by Alex Richardson; Editing by Neil Fullick)
Source: Reuters “Foreigners drawn in as fear and loathing grip China’s finance industry”
Chinese anti-graft campaign has round up two fierce tigers: former security tsar Zhou Yongkang and former Central Military Commission Vice Chairman Xu Caihou.
Xu died in custody while Zhou was given the penalty of life imprisonment by court yesterday.
Reuters says in its report “China jails former security chief for life after secret trial” yesterday, “China sentenced its powerful former domestic security chief Zhou Yongkang to life in jail on Thursday, after he was found guilty at a secret trial of bribery, leaking state secrets and abuse of power, in China’s most sensational graft scandal in 70 years.”
Zhou submitted to the verdict and would not appeal.
Reuters says, “‘I submit myself to the verdict of the court, and I do not appeal,’ Zhou told the court, in comments carried on state television’s main evening news.
“‘I recognize the facts of my breaking the law, which has caused great losses to the party. I again admit my guilt and am penitent,’ a white-haired Zhou, who had not been seen in public since October 2013, added.”
Such a powerful elder can be subdued so easily, I guess, due to the bargain of his submission for allowing him to take responsibility of all corruption crimes committed by his wife and son so that they will be treated leniently.
Zhou’s submission is very important for Chinese President Xi Jinping to create the awe for deterrence of future corruption crimes.
It means that Xi is able not only to punish but also to make powerful corrupt officials submit meekly to the punishment. Xi has thus won decisive victory in his fight against corruption. However, he has to carry on the fight for at least two decades to eradicate corruption which has become in vogue everywhere in China.
The following is the full text of Reuters report:
China jails former security chief for life after secret trial
BEIJING By Ben Blanchard and Benjamin Kang Lim Thu Jun 11, 2015
China sentenced its powerful former domestic security chief Zhou Yongkang to life in jail on Thursday, after he was found guilty at a secret trial of bribery, leaking state secrets and abuse of power, in China’s most sensational graft scandal in 70 years.
Zhou, who was formally charged in April, was tried in the northern city of Tianjin on May 22. He admitted his guilt and decided not to appeal against the verdict, state media said.
Zhou, 72, is the most senior Chinese official to be ensnared in a graft scandal since the Communist Party swept to power in 1949. The decision to try Zhou underscores President Xi Jinping’s pledge to fight corruption at the highest levels.
“I submit myself to the verdict of the court, and I do not appeal,” Zhou told the court, in comments carried on state television’s main evening news.
“I recognize the facts of my breaking the law, which has caused great losses to the party. I again admit my guilt and am penitent,” a white-haired Zhou, who had not been seen in public since October 2013, added.
One source with the direct knowledge of the situation told Reuters that Zhou was guarded by soldiers rather than members of the police force he used to command.
“He was cooperative during interrogations,” the source said, speaking on condition of anonymity. “His attitude was good.”
In ordering the investigation into Zhou, Xi broke with an unwritten understanding that members of the Politburo Standing Committee would not come under such scrutiny after retirement.
Zhou’s alleged crimes took place over decades, including when he was deputy general manager of China National Petroleum Corporation (CNPC), party boss in southwestern Sichuan province, minister of public security and a member of the Politburo Standing Committee, according to the initial indictment.
Zhou’s wife and son, who testified via video link, took 129 million yuan ($20.78 million) in money and property, and then told Zhou after they had taken the bribes, the court found.
CNPC’s former head Jiang Jiemin also testified. Jiang, a former close associate of Zhou, went on trial in April accused of corruption, but has yet to be sentenced.
Jiang, as well a former deputy Sichuan party boss Li Chuncheng, were told by Zhou to assist in the business activities of others, helping them to illegally obtain about 2.14 billion yuan, the court found.
The page-and-a-half statement published by the official Xinhua news agency gave brief but tantalizing details of the trial, though it did not elaborate on the nature of the state secrets he leaked.
Zhou handed over six secret documents from his office to a person named Cao Yongzheng, Xinhua said. Respected Chinese business magazine Caixin has previously identified Cao as a mystic.
The government had previously said the trial would be open.
While Xi, who has pledged to go after powerful “tigers” as well as lowly “flies”, will continue to press home his corruption fight, his government has other more pressing problems, such as the slowing economy and need to push through painful reforms.
“I think we still cannot talk about him having achieved an overwhelming victory,” said Zhang Lifan, a Beijing-based political commentator.
“In the past couple months, the crackdown on tigers has obviously slowed. Recently it has just been flies.”
Zhou was a member of the Politburo Standing Committee – China’s apex of power – and held the post of security tsar until he retired in 2012.
Sources with ties to the Chinese leadership have previously told Reuters that Xi has been determined to bring down Zhou for allegedly plotting appointments to retain influence ahead of the 18th Party Congress in November 2012, when Xi took over the party.
Zhou also ordered the bugging of the telephones of top leaders, the sources have said.
The government’s corruption fight has extended to almost every corner of the country, including powerful state-owned companies that dominate sectors of the economy such as energy, banking and telecommunications.
Zhou joined the Politburo Standing Committee in 2007 while also heading the central Political and Legal Affairs Committee, a sprawling body that oversees law and order policy. The security apparatus he ran expanded during his watch and consumed a budget that exceeded the official figure for military spending. He quickly earned the enmity of Chinese dissidents.
Retired legislators and lawyers have said many of the previous abuses to the rule of law in China can be attributed to Zhou, who expanded his role into one of the most powerful and controversial fiefdoms in the one-party government.
($1 = 6.2065 Chinese yuan)
(Additional reporting by Michael Martina; Editing by Nick Macfie and Alex Richardson)
Source: Reuters “China jails former security chief for life after secret trial”
China’s official corruption is an inveterate chronic disease very difficult to cure.
Even with the power of absolute monarchy, honest and clever emperors such as Emperor Taizu of the Ming Dynasty and Emperors Jiaqing, Daoguang and Xianfeng of the Qing Dynasty were unable to deal with it in spite of the heavy punishment they meted out.
Current Chinese President Xi Jinping, however, knows that there must the fierce and widespread vigor like a severe storm to sweep away such a malpractice and that he has to make lasting efforts for decades and be relentless in fighting against not only corruption but also extravagance, which induces corruption and is pursued by corrupt officials.
Xi launched his anti-corruption storm in September 2013. More than one and a half years have passed, but there has been no relaxation whatever of his efforts to fight corruption. On the contrary, he even extends the fight abroad. SCMP revealed that on March 18 in its report titled “China sheds light on its quest to track down fleeing officials”.
On March 25, Reuters says in its report “China gives ‘priority list’ of wanted officials to U.S.”, “China has provided a ‘priority’ list to the United States of Chinese officials who are suspected of corruption and are believed to have fled to the U.S., a top state-run newspaper said on Wednesday.”
Later on April 11, Reuters says, “The United States has promised support for China’s campaign to hunt corrupt officials fleeing abroad, the official Xinhua news agency reported late Friday, after meetings between security officials from the world’s two largest economies.”
China employs young and well-educated staff to hunt down such corrupt officials. Reuters says in a separate report later, “China’s team charged with hunting down officials suspected of corruption who have fled overseas is aged 30 on average, speaks foreign languages and is well educated, a Chinese official said, giving rare details of a secretive operation.”
In addition to seeking help from specific countries such as the United States, China also tries to track down through Interpol the corrupt officials who have fled abroad.
Reuters says in its report “China’s Interpol office issues list of economic fugitives: graft watchdog” on April 22, “China’s Interpol office has released a list of 100 wanted economic fugitives, the ruling Communist Party’s anti-corruption watchdog said on Wednesday, as the government deepens its fight against suspected corrupt officials who have fled overseas.”
Moreover, a hundred corrupt officers have recently been found in Chinese military. China’s official mil.huanqiu.com revealed that in the 102 days from January 15 to April 26, 33 corrupt officers were found in Chinese military including three above army level.
To tighten discipline, on May 1, China’s top graft buster the Central Disciplinary Inspection Commission posted an order in its website forbidding officials from holding meeting in 21 top Chinese tourist sites including
Reuters says in its report, “The sites include the Badaling sector of the Great Wall outside of Beijing, the old summer residence of the Qing emperors at Chengde and the beach resort of Sanya, which China likes to style its answer to Hawaii or Bali.”
At the beginning, quite a few officials said that it was but new blooms sweeping clean. They have but to be patient to wait for the storm to calm down, but they have now realized that the storm grows stronger instead of calming down. Some officials even try to switch to jobs in private enterprises as the gray income from their posts have greatly decreased.
Source: Reuters “China gives ‘priority list’ of wanted officials to U.S.”, “China says U.S. backs its campaign to hunt down ‘economic fugitives’”, “China says using young, educated anti-graft officials as ‘fox hunters’”, “China’s Interpol office issues list of economic fugitives: graft watchdog” and “No meetings at tourist hotspots, China reminds officials”
Full texts of the Reuters reports can be viewed at http://www.reuters.com/article/2015/03/25/us-china-corruption-usa-idUSKBN0ML08N20150325
Source: mil.huanqiu.com “PLA Stroke 33 tigers with focus on joint logistic departments and provincial military commands” and “Chinese military publishes details of major corruption cases of three cadres above army level” (summary by Chan Kai Yee based on the reports in Chinese)
Chinese authorities on Monday executed a former mining tycoon connected to the eldest son of retired domestic security chief Zhou Yongkang, himself the focus of a high-profile corruption investigation, state media reported.
The High People’s Court in the central province of Hubei ordered the execution of Liu Han, the former chairman of unlisted Hanlong Group, who was given the death sentence last May, the official Xinhua news agency said.
The case against Liu was one of the most prominent involving a private businessman since President Xi Jinping took office two years ago and began a campaign against pervasive graft.
Liu, who once ranked as China’s 230th richest person, was tried last year, along with 36 others, accused of murder and running what state media called a “mafia-style” gang.
Liu’s younger brother, Liu Wei, and three others were also executed, according to Xinhua.
China last year announced a probe into Zhou Yongkang, one of its most influential politicians of the last decade, in a case that has its roots in a power struggle in the ruling Communist Party.
Sources have told Reuters Liu was once a business associate of Zhou’s eldest son, Zhou Bin. State media have not explicitly linked Liu’s case to Zhou Yongkang, but have said his rise coincided with Zhou’s time as Sichuan’s party boss.
The party has already gone after several of Zhou’s protégées, including Jiang Jiemin, who was the top regulator of state-owned enterprises.
Source: Reuters “China executes businessman linked to former security tsar”
Few reforms succeeded in China’s thousands years of history mainly due to the agony caused by the reform. Shang Yang’s reform was the greatest. It made the State of Qin strong both economically and militarily and finally able to unify China.
However, due the agony caused by the reform, Shang Yang was cruelly killed by conservatives. Fortunately, in spite of strong conservative opposition, the sovereigns of Qin wisely carried on the reform. Pressure from other powerful states was one of the major factors that forced the sovereigns of Qin to gain the strength through the reform to counter the threat from them, especially its powerful neighbor, the State of Wei to which the State of Qin had lost quite a large part of its territory.
In a sense, Qin should be grateful to those states for the pressure placed on it by them.
The situation is being repeated in China’s current reforms.
Due to the agony caused by the reforms, major reform leaders Hu Yaobang and Zhao Ziyang fell into disgrace.
Due to the agony caused by the reforms, there was mass protest in 1989 that almost overthrew the communist regime.
Jiang Zemin led the new generation of talented intellectuals with moral integrity to exploit the panic caused by the mass protest and carry out a silent peaceful coup d’etat to substitute intellectuals’ dominance of Party and state for uneducated workers’ and peasants dominance. (See my book Tiananmen’s Tremendous Achievements Expanded 2nd Edition). He was thus able to carry on Deng Xiaoping’s reform.
However, the reform seemed to be at a dead end. It seemed that no one knew how to conduct the trickiest reform of China’s state owned enterprises. There were the popular predictions that China will soon collapse so that American Chinese writer Gordon Chang’s book The Coming Collapse of China became a best seller in early 2010s.
I said in my book that Gordon Chang knew China well and his prediction was well founded. He saw the problems China faced at that time, especially the trickiest problem in China’s state-owned sector. No one in the world has ever resolved the problem satisfactorily. The Soviet Union tried to solve the problem by privatization but collapsed as a result.
However, Jiang’s talented assistant Premier Zhu Rongji smoothly carried out the reform of China’s state-owned sector and turned it from a source of huge losses into a lucrative sector.
I said in my book that Gordon Chang failed in his prediction because he underestimated Chinese talents.
While carrying on Jiang’s reforms and economic development, Hu Jintao saw the problem of corruption, pollution and over-reliance on export and investment and put forth the Scientific outlook on development as a remedy. He had to conduct another round of economic reform for thorough economic liberalization, but he was unable to overcome the resistance from vested interests and conservatives.
Hu left Xi Jinping a legacy of rampant corruption, a stagnant economy with overinvestment and excessive local government debts and fierce power struggle between conservatives and reformists.
I have described in my book how Xi launched his anti-corruption storm, put an end to the power struggle and was happy that economic slowdown facilitated his thorough economic reform.
Now, seeing the economic slowdown, quite a few China watchers have predicted the coming collapse of China again. A typical article is Linette Lopez’s “ANALYST: China’s ‘Long-Awaited Day Of Reckoning’ Is Almost Here” at Business Insider (it can be viewed at http://www.businessinsider.com/credit-drying-for-chinas-soes-2015-1).
Ms. Lopez does not know China so well as Gordon Chang. She failed to see the huge assets Chinese central and local governments have for resolution of the debt problems. However, if Xi’s thorough economic reform fails, economic slowdown will be a prolonged reality.
Xi and his assistant Premier Li Keqiang repeatedly said that China’s reform is now in deep water due to the strong resistance of vested interests. The State of Qin successfully carried out Shang Yang’s reform as its sovereigns were able to overcome the resistance from powerful aristocrats. Now, China’s problem is whether Xi and Li are able to overcome the resistance of powerful vested interests. (As described in my book Xi has overcome powerful conservatives’ even greater resistance.)
Xi and Li are now carrying out their thorough reforms step by step smoothly. When Jiang Zemin met Henry Kissinger, he told Kissinger that China needed a strongman and Xi was strong enough. He was happy Xi was the right choice as China’s leader.
Xi has proved himself as a sufficiently strong leader by his mass line campaign and anti-corruption storm. However, according to Chinese history, a leader has to master the art for being the emperor, in which discovery, wise use and creation of bondage with talented assistants is the key for a Chinese emperor’s success. (I have described in my book that China’s current political system is the CCP (Chinese Communist Party) Dynasty with a core like an emperor.)
Only when Xi has found and appointed to high posts his loyal protégés can we be sure he is able to carry out his reforms successfully to make China the richest and strongest nation in the world.
The following is the full text of Reuters report today on China’s economic slowdown:
China’s imports slump, capping dismal January trade performance
China’s trade performance slumped in January, with exports falling 3.3 percent from year-ago levels while imports tumbled 19.9 percent, far worse than analysts had expected and highlighting deepening weakness in the Chinese economy.
Largely as a result of the sharply lower imports – particularly of coal, oil and commodities – China posted a record monthly trade surplus of $60 billion.
The data contrasted sharply with a Reuters poll which showed analysts expected exports to gain 6.3 percent and the slowdown in imports to slow to 3 percent, following a better-than-expected showing in December. The poll had also forecast a trade surplus of $48.9 billion.
The slide in imports is the sharpest since May 2009, when Chinese factories were still slashing inventories in reaction to the global financial crisis. Exports have not produced a negative annual reading since March 2014.
The dismal trade performance will increase concerns that an economic slowdown in China – originally considered a desirable adjustment away from an investment-intensive export model toward one based on domestic consumption – is at risk of derailing.
The government is expected to lower its GDP target to around 7 percent this year, after posting 7.4 percent in 2014 – the slowest pace in 24 years.
Chinese economic indicators in January and February are typically viewed with caution given the distortions caused by the shifting week-long Lunar New Year holiday, and while the analyst median estimate was for a rise, the range of estimates was extremely wide.
However the data – in particular the import data – is worrisome even after accounting for cyclical factors; last year the new year holiday idled factories and financial markets for a week in January, but this year the holiday comes in late February and January was a full month of business as usual.
“It’s a very strange data print,” said Andrew Polk, economist at the Conference Board in Beijing, noting that exports tended to be less effected by the holiday than other indicators, but added he was more concerned by the implications of the startlingly negative import figure.
“The import data suggests a substantial slowdown in the industrial sector. The first quarter looks to be pretty horrible.”
Investors had hoped that the announcement of domestic stimulus spending plans, combined with moves to ease monetary policy, including a reduction in banks’ reserve requirement ratios on Wednesday, would restore confidence and boost demand in China’s struggling manufacturing sector.
However, many analysts believe measures taken so far to boost yuan liquidity are insufficient to do much more than offset surging capital outflows. Advocates of more aggressive action will seize on the weak January trade data to support their case.
Chinese imports have fallen every month since October, seen as reflecting weak domestic demand, and the scale of January’s drop was mostly due to an across-the-board fall in import volumes of major commodities.
For example, coal imports dropped nearly 40 percent to 16.78 million tonnes, down from December’s 27.22 million tonnes, and China also appeared to cut back on its strategic stocking of crude oil imports, which slid by 7.9 percent in volume terms.
Imports from Australia and the Russian Federation, both major fuel and commodity suppliers, slid by 35.3 percent and 28.7 percent, respectively.
Chinese officials had predicted that monetary easing measures in Europe would boost demand for Chinese goods, and analysts polled by Reuters had also been optimistic that signs of economic strengthening in the United States would support exports.
However, the data showed that while exports to the United States rose by 4.8 percent year-on-year to $35 billion, exports to the European Union slid 4.6 percent to $33 billion in the same period.
Exports to Hong Kong, South Korea and Japan were also down, with exports to Japan slumping over 20 percent.
During 2014, China’s total trade value increased by 3.4 percent from a year earlier, short of the official target of 7.5 percent, and some analysts have raised questions about whether export data was inflated by fake invoicing as firms speculated in the currency and commodities markets.
Source: Chan Kai Yee Tiananmen’s Tremendous Achievements Expanded 2nd Edition
Source: Reuters “China’s imports slump, capping dismal January trade performance”
China’s anti-corruption watchdog has stepped up inspections of state-run conglomerates, focusing on strategic firms, as Beijing prepares to implement its most ambitious reform of government industry in nearly two decades.
Anti-graft inspectors are targeting 53 strategic central government-owned groups, where top executives hold the rank of deputy government ministers, a state industry source familiar with the matter told Reuters.
Chinese President Xi Jinping has warned that the problem of official graft is serious enough to threaten the Communist Party’s legitimacy and has vowed to go after powerful “tigers” as well as lowly “flies”.
Graft-busters have gone after business leaders and politicians alike. On Friday, one of the country’s top spy chiefs became the latest official to be caught in the dragnet, signaling that the boldest crackdown on corruption in decades had spilled over into China’s powerful intelligence apparatus.
The Central Commission for Discipline Inspection (CCDI), the ruling Communist Party’s top anti-corruption body, said it would inspect all central government state-owned enterprises (SOEs) this year, the official Xinhua News Agency reported on Wednesday.
In November, the CCDI announced it had dispatched teams to eight big SOEs, including China Southern Airlines Co (600029.SS), China Unicom (0762.HK), Dongfeng Motor Corp (0489.HK) and China Petroleum & Chemical Corp, or Sinopec (600028.SS).
On Friday, the anti-graft body said it would prosecute Zong Xinhua, the former head of China Unicom’s e-commerce and information technology unit.
China Southern Chief Financial Officer Xu Jiebo along with three other top executives at the carrier were put under investigation and sacked for suspected criminal wrongdoing earlier this month.
The SOE anti-graft efforts coincide with China’s imminent roll-out of ambitious new guidelines to overhaul the country’s inefficient state sector.
The State-owned Assets Supervision and Administration Commission (SASAC), the ministry-level body that directly oversees 112 central government industrial and service conglomerates, is expected to publish the reform plans before the end of March.
“Currently the anti-corruption fight at central SOEs remains severe and complicated,” SASAC Chairman Zhang Yi said at an internal meeting last year, according to a post on the CCDI’s website earlier this month.
The SASAC needs to be the “eyes” of the Party and stand in the “vanguard” to curb the spread of corruption, Zhang said.
On Tuesday, Xi told a meeting of anti-graft authorities that they must step-up supervision, inspection and audits of state-owned enterprises and strengthen the Party’s control over those firms.
“State-owned assets and resources are hard-earned, the shared wealth of the people of this country,” Xi said, according to the official People’s Daily.
“We must complete the state asset supervision system to toughen oversight of departments and positions that are rich with power, capital and resources,” he said.
Anti-corruption efforts at China’s most strategic conglomerates are likely to be part of an ongoing campaign rather than a one-time event, the state industry source said.
Anti-graft authorities have sent inspection teams into 36 central government-owned state conglomerates over the last two years, placing 21 executives under investigation for wrongdoing, according to statistics compiled by Reuters.
In December, the SASAC held a general meeting to discuss a key document concerning the role of company insiders and avoiding the loss of state assets during SOE reforms, the government body said in an online statement early this month.
Those plans are expected to encourage the separation of business from politics through the appointment of independent company management and boards of directors, answerable to independent state asset managers.
The government is expected to promote so-called “mixed ownership” by backing the sale of enterprise stakes to portfolio and private investors.
Source: Reuters “China’s graft-busters target state-owned firms ahead of reform”
Related posts at tiananmenstremendousachievements.wordpress.com:
- China: Severe Anti-corruption Storm on the Horizon dated August 31, 2013
- China: Xi Jinping’s Anti-corruption Storm Sweeps Chinese Military dated November 6, 2013
- China: Anti-corruption Storm Spreads Abroad dated December 30, 2014
- China No Letting-up of Anti-Corruption Drive dated January 15, 2015
Years of efforts are required to eliminate widespread rampant corruption in China as corruption has been an inveterate problem for many years in Chinese history.
Xi Jinping proves himself capable of doing that by keeping the pressure high on corrupt officials and allowing no escape even abroad. The following are the full text of Reuters report on Xi’s unrelenting efforts:
China investigates senior military officials for graft amid crackdown
China kicked off investigations into several senior military officials on serious graft charges last year, the Ministry of Defence said on Thursday, as the country works to stamp out corruption in its armed forces.
Many of those implicated have ties to the corruption scandal of a former top military officer, Xu Caihou, who retired as vice chairman of the powerful Central Military Commission last year. China announced last summer it was investigating Xu for graft.
The 16 officials accused of “seriously violating party discipline”, a common euphemism for graft, include the former commander of the military region of the central province of Shanxi, Fang Wenping, the ministry said.
It was the first announcement of action faced by the officials, but did not detail all the charges against them.
Liu Zheng and Fu Linguo, former deputy directors of the powerful General Logistics Department, were both placed under investigation.
Yu Daqing, former deputy political commissar of the Second Artillery Corps, the military’s nuclear and conventional missile division, was also put under investigation, the Defence Ministry said in a statement on its website.
But it gave no details of the status of the investigations.
Serving and retired Chinese military officers have said graft in the armed forces is so pervasive it could undermine China’s ability to wage war.
Xu had confessed to taking “massive” bribes in exchange for favors, such as granting promotions.
President Xi Jinping, who also serves as chairman of the Central Military Commission, has vowed to eradicate corruption in China’s armed forces, which are 2.3 million-strong.
China said last month it was investigating Gao Xiaoyan, Communist Party boss of the discipline committee at the People’s Liberation Army Information Engineering University.
Source: Reuters “China investigates senior military officials for graft amid crackdown”