China's graft-busters hit more SOEs
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E-mail Xinhua, February 12, 2015
No stone unturned
The first round will take 13 teams, each covering two SOEs. The number of enterprises under scrutiny is almost double those of previous tours.
All major SOEs will be inspected this year as a precursor to SOE reform. Previous inspections led to the fall of over 70 executives in 2014.
Executives of energy company Shenhua Group were found to have accepted bribes. China Unicom's chief "colluded with contractors and suppliers, using their power to seek money or sex".
Weeding it out
Inspections will begin immediately after Spring Festival.
In the past two years, the inspectors have visited all of China's provinces, regions and municipalities. Previous inspections revealed power-money deals between Party and government officials and heads of SOEs. If the corruption is not weeded out in these enterprises, it will be next to impossible to stop in Party and government circles, according to Xin Ming of the Party School of the CPC Central Committee.
"The key to the campaign lies in whether the ties between SOEs and officialdom can be severed and whether graft-busters are brave enough to hit the special interest groups," said Zhuang Deshui, head of clean government research at Peking University.
Reap and sow
Cleaning up SOEs must be good for the enterprises as China copes with slower growth. Corruption and abuses of power raise operating costs, impair the openness of the market, cause huge losses, and hamper development of the firms.
Buying and selling of official posts, entertaining at public expense, and various forms of nepotism were all discovered in the Huadian Corporation, Dongfeng Motor Corporation and other enterprises.
Ren Jianming of Beihang University, describes SOEs as de facto ATMs for corrupt officials with the most adverse of effects not just on the businesses themselves, but on society as a whole.
Apart from corruption, this round will also touch on the problem of how to stop state-owned assets from losing value. Zhuang blames many of these big losses on expansion overseas, which is difficult to police.
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