Monitor | China graft probe looks more like a 'petro purge' than an assault on sleaze
If graft-busters focus on sectors controlled by rival political factions, it's hard to see investigations as anything but a tool to discredit opponents
China's latest anti-corruption drive, which has so far snared a clutch of senior serving and former state oil company executives, has been widely hailed as proof that the country's new leadership under President Xi Jinping and Premier Li Keqiang is serious about pushing through economic reforms in the face of stiff opposition from powerful entrenched interests in the state sector.
Maybe, but if they want to convince the sceptics, Xi's graft-busters will have to widen their investigations beyond China's state petroleum industry.
To prove they really mean business, they should consider turning over a few stones in China's mining industry, in its telecommunications and electrical equipment sectors, and, above all, in its property development business.
It’s not hard to fathom why the investigation is concentrating on figures from the oil industry
Corruption, cronyism and nepotism exist on a vast scale across these sectors, as well as in the petroleum industry, because China's economic model makes it all too easy for senior officials to trade on their positions to enrich themselves, their families and their friends.
Although Beijing has liberalised much of the country's "downstream" economy - light manufacturing, retailing and the like - Beijing retains a tight grip on "upstream" sectors including raw materials, energy, and communications, where state-owned corporations can make vast profits exploiting their monopoly positions.
Senior officials in the state monoliths then use their influence to grant lucrative contracts to private firms set up by their friends and relatives.
The extension of the latest anti-corruption probe from executives at state oil giants CNPC and PetroChina to encompass the chairman of Hong Kong-listed oil field services company Wison Engineering illustrates how the nexus works.
In effect, the state sector uses its monopolies to extract handsome rents from the private sector and people. In turn, officials and their cronies then use their influence to extract even more lucrative rents from the state sector, allowing them to amass fortunes in many cases worth billions of yuan.