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On June 5, Li Lang, former general manager and Party secretary of the Zhangzhou branch of China Telecom, one of China’s three telecoms giants, was detained by police for “severe violation of law and Party discipline,“ becoming the 47th high-ranking State-owned enterprise （SOE） executive to come under investigation for corruption this year.
Following the 18th National Congress of the Communist Party of China （CPC） in November 2012, China launched an ongoing nationwide anti-corruption campaign, an effort that has so far seen a total of 180 high-ranking SOE “tigers” （President Xi Jinping’s buzzword for powerful corrupt officials） jailed, with bribery, embezzlement and abuse of power being the three most common charges. Repeated exposures of systemic corruption within China’s monolithic SOEs, including in core fields like energy, telecommunication, press and construction, he left China’s population with little faith in the government’s supervision of SOEs.
“It has become evident that [the government’s] various layers of supervision on SOEs are largely ineffective. In other words, SOE officials are not subject to supervision by their subordinates, and are beyond the control of their superiors,” Ji Xiaonan, chairman of the Supervision Commission of Key SOEs told the media following the arrest of Jiang Jiemin, former president of CNPC （China National Petroleum Corporation）.
In 2014, the Disciplinary Inspection Commission of the CPC Central Committee has so far held four separate conferences on the subject of SOE corruption, and has issued an array of new policies to tighten both internal and external supervision on SOEs, such as setting up a dedicated office for the supervision of the State-owned Assets Supervision and Administration Commission （the SASAC）, the department responsible for overseeing the SOEs, and expanding the range of investigations. However, these efforts he been met with skeptici – critics called for a loosening of the relationship between administrative powers and SOE management, which many he referred to as the “soil” in which corruption germinates.
Powerless Supervisors
China is now reportedly home to over 150,000 SOEs, most of which fall under the jurisdiction of the SASAC or its local counterparts which are responsible for supervising the assets, operations and human resources – including top-level personnel – of SOEs.
It is generally believed that this management structure has lead SOEs to bear a closer resemblance to government departments than enterprises, with many SOE leaders enjoying immunity from supervision due to their high administrative rank.
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