SOEs a nexus of power and wealth

Throughout the course of human history, no two matters have been responsible for more conflicts than power and wealth. And nowhere are wealth and power more closely entwined than in one of China's state-owned enterprises.

For years, the SOEs have attracted the ire of consumers for taking advantage of their monopoly status by offering substandard products at an excessive price. They are equally scorned for paying lavish salaries and spending on luxury entertainment and generous perks for privileged staff, all of which goes hand-in-hand with widespread corruption because of the companies' excessive profitability.

In 2011, for instance, oil refining behemoth Sinopec raised hackles on the mainland when it was revealed that its Guangdong branch had splashed a fortune on huge quantities of expensive drinks, including Chateau Lafite Rothschild wine and national liquor mao-tai. The cost of the drinks came to some 1.68 million yuan (HK$2.12 million).

A recent high-profile graft scandal involving a number of senior executives of the state oil and gas company with connections to the very top political leadership has strengthened the widely held belief that the state monopolies are not just a hive of corruption but also a battlefield for factional political conflict.

The detention of Jiang Jiemin , head of the State-owned Assets Supervision and Administration Commission (Sasac), a government body set up in 2003 to oversee the giant SOEs, is seen as symptomatic of what some academics call "bureaucratic capitalism".

Jiang, a former head of the China National Petroleum Corporation (CNPC), became the first member of the Communist Party's 205-strong Central Committee to be held for what Xinhua described as "serious discipline violations" - a euphemism for graft - since the leadership transition in November.

The move is being presented by state media as evidence of a resolve to clean up public life under the new leadership of President Xi Jinping . But this is by no means the first high-level corruption case involving state monopolies.