Opinion | Cleaning up China's state-owned firms must go beyond punishing the corrupt

After government agencies, state-owned enterprises have become the second main battleground for China's crackdown on corruption.

In September last year, a series of reports signalling high-level corruption at PetroChina and its parent company, China National Petroleum Corporation (CNPC), culminated in the detention of former CNPC chairman and then director of the State-owned Assets Supervision and Administration Commission, Jiang Jiemin. The fallout of the investigation is still being felt.

In Hong Kong, another state-owned conglomerate, China Resources Holdings, has also come under scrutiny. Its chairman Song Lin was placed under investigation last month. Since then, three others have been detained, most recently Wang Shuaiting, a former executive at the company and current chairman of China Travel Services (Holdings) Hong Kong.

We expect more such shocking revelations.

The sustained crackdown signals the authorities' determination to cut the rot. Clearly, a minority of senior executives at state-owned giants have no qualms exploiting their power and privilege for their own gain and the benefit of those with whom they collude.

Investigators cannot afford to relax: every case of wrongdoing uncovered must be prosecuted. Meanwhile, China must rethink the structure of its state-owned enterprises - a perverse state-market hybrid - that has allowed corruption to flourish. Thus, we could not agree more with Wang Qishan , chief of the Central Commission for Discipline Inspection, when he said the corruption fight at state-owned enterprises must go hand in hand with their reform.

The cosy relationship between government and business in a state-owned enterprise has become a mask for corrupt behaviour. The practice of "administrative monopoly", by which monopolistic rights are granted to a company by government order, is also to blame. The root of the problem lies in the unchecked power of the state to allocate resources.