In the festive last week of 2009, two news stories initially sent chills down the spines of mainland telecom officials. On Boxing Day, the Communist Party's top anti-graft watchdog announced it was investigating Zhang Chunjiang , vice-chairman and party secretary of China Mobile, for 'serious disciplinary breach', a euphemism for corruption. On December 31, the US Department of Justice and the Securities and Exchange Commission announced that UTStarcom, a maker of telecommunications and networking gear, had agreed to pay US$3 million in fines to settle charges including one alleging its China subsidiary bribed officials of mainland telecom companies to the tune of nearly US$7 million.
At first glance, these two cases may not be directly related and the close timing of the announcements may be coincidental. But they have generated intense speculation not only in the telecom industry but also in the corridors of power in Beijing.
For many optimistic observers, the cases have given hope that the mainland leadership may have finally mustered the political courage to tackle the rampant corruption permeating the highly profitable telecommunications industry. For more cynical analysts, however, Zhang's downfall may be part of a broad and deeply delicate game being played out in the opaque world of mainland politics, while the telecom officials who received the bribes from UTStarcom get away without punishment.
Zhang, 51, is the most senior mainland telecom official to fall from grace as he has held the rank of a deputy government minister since 1999. Some mainland media have billed his downfall as the biggest corruption case in the telecom industry since 1949.
As usual, the anti-graft officials have kept silent over the details concerning Zhang's corruption, but the mainland financial media has been busy digging and throwing up whatever mud they can find.
China Mobile, the world's largest mobile operator, promptly responded that the inquiry was not related to the company and would not affect its operations.