Analysts say attempts to claim more corporate scalps could stem from more intense factional fighting
Gulfnews.com
Lucy Hornby, Financial Times
November 8, 2015
Beijing: China is doubling down on its anti-corruption purge, ensnaring top executives at three multibillion dollar state-owned enterprises this week alone.
The detentions of the heads of three industry giants — in banking, aviation and auto manufacturing — belie expectations in some quarters that President Xi Jinping was ready to wind up his signature campaign, which has weeded out hundreds of officials and scythed demand for everything from cognac to golf.
Instead, in the week that saw China unveil its five year plan, Xi’s campaign moved up a notch. On Monday, the second in command at Agricultural Bank of China was detained, followed later in the week by the president of Dongfeng Motor and chairman of Asia’s largest carrier, China Southern Airlines.
They are the latest among hundreds of company executives and officials to be rounded up after investigations into tens of thousands of people.
“There’s a genuine attempt to clean up,” said Alice de Jonge, senior lecturer in Asian corporate governance at Australia’s Monash University. “Personalities, politics and policies: they all collide in this environment.”
The three detentions this week followed on the heels of a Communist Party plenum that set the stage for personnel shuffles leading up to the 19th Party Congress expected for 2017. That congress, the culmination of the five-year cycle of party political life, will kick off the second term of Xi and anoint the generation-in-waiting.
Analysts say attempts to claim more corporate scalps could stem from more intense factional fighting, particularly if the purge moves into the financial sector where so-called princelings — leaders descended from Communist party aristocracy — are concentrated. It is also where anti-corruption tsar Wang Qishan built his career.
Factional fighting has stepped up amid jostling to cement positions ahead of the next political cycle, and as different groups battle to protect their own interests.
Manoeuvring on a grand scale overlaps with local politics and the ambitions of individual executives, making it particularly difficult to read into any individual detention, said Bo Zhiyue, director of the New Zealand Contemporary China Research Center in Wellington. “Once you have a campaign like this going on you have people working within the campaign to secure their own position or defeat internal rivals for promotion.”
Reports of teams from the anti-corruption watchdog ensconced in financial offices — as part of investigations also manned from province or company offices — are “making people nervous,” Bo said.
But if the teams unravel a network related to a princeling from one of the most powerful elite families or the child of a more recent leader, “they have to make a political decision whether to go after them.”
The heads of banks and state-owned enterprises occupy an unusual grey zone in the Chinese system. Many have developed their own fiefdoms and are highly protective of them, but are simultaneously apparatchiks entrusted to carry out the behest of the party-state, and of much more powerful personal patronage factions.
For instance, the Chinese oil industry has been decimated by the anti-corruption drive, which has rooted out the patronage networks of Zhou Yongkang, the former energy and security tsar.
The detention of the retired chairman of Shanghai’s state-owned Bright Food Group and the head of FAW Group in Changchun, where former party leader Jiang Zemin spent his early career, is seen by some analysts as a shot across the bow to Jiang’s robust Shanghai-centred patronage network.
Says the Chinese political analyst: “They are all pawns, some of the smallest pawns in this game.”
