China's state-owned firms warned to keep closer watch on overseas investments

The mainland's oil and gas giants need to strengthen regulation on overseas investments, the graft watchdog has said after inspecting the state-owned enterprises.

The foreign investment projects of the China National Petroleum Corporation - the mainland's largest oil and gas producer - "did not go through standardised decision-making processes" and were not well managed, putting them at risk of corruption, the Central Commission for Discipline Inspection said in an inspection report released on Tuesday.

The China National Offshore Oil Corporation's overseas investments also lacked supervision, the CCDI said. The watchdog instructed both firms to step up regulation on their overseas assets by carrying out frequent audits and holding project officials accountable for life.

Beihang University anti-graft scholar Ren Jianming said the loss of state-owned assets abroad had become a serious problem as more state-owned firms ventured overseas for business.

"The eighth amendment to the Criminal Law has included overseas bribery as a criminal offence, but it is not enough," Ren said. "How to regulate Chinese enterprises' overseas corruption is still a very big challenge."

Former senior government auditor Dong Dasheng said in March that state-owned firms' overseas assets were a hotbed for corruption because the central government almost never audited their financial accounts.