Engineering and construction hotbed of corruption

In March last year, after getting government approval to go ahead with a US$900 million refinery expansion in Fujian province, state-run oil giant Sinopec Corp warned the team handling the project against taking bribes.

"Project engineering and construction has been a main area for corruption at Sinopec," the Fujian unit of Asia's largest refiner said in a blunt memorandum, according to a Sinopec source. "All members, especially those in key posts, must treasure their positions, stay guarded and resist temptation."

The memorandum underscores what experts say is one of the biggest challenges facing President Xi Jinping and his drive to tackle corruption - rampant graft in engineering, procurement and construction contracts awarded by state firms.

Graft in the state sector has been acknowledged before but shot to the headlines recently when authorities stunned the energy industry with an investigation into five former senior executives at state-run oil and gas behemoth PetroChina and its parent firm, China National Petroleum Corp.

That investigation has raised questions about how far Xi will go to root out graft in an industry that ranks as one of the most powerful corners of the state-owned corporate sector.

Virtually all senior officials at state firms are members of the ruling Communist Party, whose power is largely unchecked.