China’s top graft-buster says it detained hundreds of SOE officials in first half of 2023

Number of state-owned enterprises investigated ‘significantly increased’ from last year, CCDI says
Anti-corruption agency has targeted the sector after it was listed as a priority in January

Corruption in China

William Zheng

Published: 6:00pm, 10 Aug 2023

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China’s top graft-buster said it detained more than 140 officials from state-owned enterprises for corruption investigations in the first half of the year, while over 200 turned themselves in.

The Central Commission for Discipline Inspection said the number of SOEs placed under investigation had “increased significantly” compared with the same period last year, but it did not give a figure for 2022.

It made the announcement in a report posted to the CCDI website on Thursday. Of the 142 SOE employees detained from January to June, some 57 had been members of the Communist Party committee at their companies. Committee members are typically the top decision-makers at companies within China’s party-state system.

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The CCDI also said it had achieved “multiple breakthroughs” in state-owned assets supervision and the energy, electricity, car and corporate finance sectors.

Cracking down on corruption in SOEs was listed as a priority for the graft-buster this year at a CCDI meeting in January, when state-run firms were described as the “ballast” of the economy and critical to President Xi Jinping’s development agenda.

In March, the CCDI began inspections of 30 of the country’s biggest SOEs directly managed by the state, including China National Nuclear Corporation, China Aerospace Science and Technology Corporation, China Rongtong Asset Management Group, China National Petroleum Corporation, and China Three Gorges Corporation.

In Thursday’s report, the CCDI said its inspectors had focused on areas vulnerable to corruption such as big infrastructure projects, procurement, mergers and acquisitions, and mixed-ownership reforms of SOEs.

The report also said CCDI teams had investigated “many” senior cadres at the State-owned Assets Supervision and Administration Commission, China Huaneng Group, China State Shipbuilding Corporation, PetroChina, State Grid Corporation, China FAW Group, Sinochem and China Post.

President Xi Jinping addresses a CCDI gathering in Beijing in January. Photo: Xinhua

The graft-buster has released several updates on the SOE crackdown since the end of March. The most recent was on May 12, when it said seven managers from the electricity, oil and gas, coal, chemicals, military and car sectors were being investigated.

The CCDI said in an April report that it would provide the updates to show its resolve to stamp out corruption in SOEs. It took aim at the leadership in some SOEs who tried to “cover up their wrongdoings” and said “irregular approval procedures” were still “very prominent” in the sector.

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Former bosses of SOEs have also been caught up in the CCDI campaign, including former party secretary and chairman of China Everbright Group Tang Shuangning, former deputy party secretary and deputy general manager of China National Petroleum Corporation Xu Wenrong, and former party secretary and chairman of China Everbright Group Li Xiaopeng.

Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said there were national objectives behind Beijing’s drive to clean up SOEs.

“It wants the SOEs to not only deliver financial results, but also to help with social goals like creating employment and developing indigenous technologies,” Wu said.

“All of those goals will be unobtainable if the SOEs continue to remain a hotbed of corruption.”