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UPDATED: August 27, 2014 NO. 18 MAY 1, 2014
Weeding Out
More and more corrupt officials are being exposed in state-owned enterprises
By Yin Pumin

As a party member, Jiang began his career as a technician at Shandong's Shengli oil field in December 1972 and worked his way up to become an assistant to the CNPC's general manager in February 1999, leading a team that oversaw the initial public offering of PetroChina, CNPC's publicly listed arm of operations.

Jiang was named deputy governor of northwest China's Qinghai Province between June 2000 and April 2004, after which he returned to the CNPC as a deputy general manager. He was appointed to the newly created post of CNPC chairman in November 2011, a position he remained in until March last year, when he was named chief of the SASAC, a body which oversees 117 state companies.

Jiang was also the only former head of a state-owned energy company to be selected as a full member of the CPC Central Committee at the 18th National Congress in November 2012.

His downfall came after investigations into the afore-mentioned four senior executives of PetroChina.

Zhao Xiao, a professor with the School of Economics and Management of the University of Science and Technology Beijing, said that many senior SOE executives have faced great temptations to engage in corrupt practices after the government injected huge funds into state enterprises in a bid to boost the slowing economy dampened by the global financial crisis.

Without a proper supervisory mechanism, it is the SOEs presiding over monopolies that are most likely to engage in corrupt practices, Zhao said.

Zhu Poshan, an expert on the restructuring of the SOEs, said the current supervisory system allows administrators to be managers at the same time, thus providing more potential for corruption than normal government offices.

In many SOEs, the roles of chairman and Party secretary are frequently occupied by the same person to better facilitate decision making, and in some enterprises the chairman, president and Party secretary are all in one person, leading to a lack of proper supervision within the company.

Under such circumstances, supervision of company operations can only be achieved by external audits and outside supervision, Zhu said.

Wang Yukai, a professor with the Chinese Academy of Governance, said the investigation of more high-level SOE executives lends credibility to the CPC's anti-corruption efforts.

"Moreover, it continues to reinforce the notion that no one is 'off-limits' in the battle against corruption," he said.

The road ahead

Probes into senior corrupt SOE executives are likely to be intensified in 2014, analysts said.

At an anti-graft conference in January, Zhang Yi, the new head of the SASAC, urged central SOEs to "set a higher priority on punishing corrupt officials" and contain the spreading trend of corruption" in central SOEs.

He also called on discipline inspection committees in central SOEs to "maintain independence and authority when fulfilling their duties."

Leaders of the central SOEs will be held responsible and severely punished if their dereliction of duty leads to the spread of corruption or they fail to stop, investigate and report major issues with corruption within their ranks, Zhang said.

As a response, Qiang Weidong, Secretary of the Party Disciplinary Commission with the SASAC, said in April that disciplinary officials in the SOEs will be required to focus more on anti-graft work. He added that the supervision of the SOEs will be enhanced to keep a close eye on the State-owned assets.

All SOEs have at least one disciplinary secretary in the company, but many disciplinary chiefs have multiple duties, including some unrelated to anti-corruption work, Qiang told China Discipline Inspection Daily.

Disciplinary officials will no longer have duties unrelated to anti-graft work from May 1 onward, and they will attach greater importance to supervision, he added.

The CCDI has also determined to extend its reach to more sections. Since March 25, it started to send its first round of inspection teams for the year to various regions and sections.

Inspectors will be sent to the 10 provincial-level regions including some monopolies, provinces, autonomous regions, as well as the Xinjiang Production and Construction Corps, the CCDI said in a statement.

The CCDI will also send special inspection teams to the Ministry of Science and Technology, Fudan University and China National Cereals, Oils and Foodstuffs Corporation, it added.

This is the third round of inspection by the CCDI after the 18th CPC National Congress. The first two rounds of inspection in 2012 covered a total of 11 provincial-level areas.

"The inspection covers more regions and sections than previous rounds, which indicates a stronger enforcement of anti-graft work," said Yang Weidong, a professor with the Chinese Academy of Governance.

The addition of new special inspection teams this year will help cover more fields such as the use of funds or personnel management in scientific research departments or other institutions, Yang said, adding that it showed an expansion of the inspection effort.

Two top leaders of the China Three Gorges Corporation, a State-owned company which runs the world's largest hydropower project, were removed from their posts on March 25, a move that came after disciplinary inspectors uncovered evidence of wrongdoing after a two-month inspection at the end of 2013.

Yang believed that with the expansion of inspection from government to public institutions, any sector that may generate opportunities for abuses of power will become the target of inspection.

Email us at: yinpimin@bjreview.com

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