CEO Morning Brief

Xi’s Graft Crackdown Ensnares Record Number of Senior Officials

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Publish date: Fri, 11 Oct 2024, 10:12 AM
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TheEdge CEO Morning Brief

(Oct 10): Chinese President Xi Jinping’s sweeping anti-corruption campaign has implicated a record number of senior officials for two straight years, highlighting the risks for bureaucrats and threatening to unsettle investors already anxious about the economy.

Chen Xiaobo, deputy chief of the provincial graft watchdog in Hainan, is being investigated for suspected “serious violations,” the Central Commission for Discipline Inspection said Thursday.

The probe brings the total number of senior government officials targeted by Xi’s campaign since January to 46, surpassing last year’s record of 45 with more than two months left to go.

The record probes show the deepening intensity of Xi’s signature anti-corruption push, which he has used to discipline the ruling Communist Party and eliminate political rivals since taking office in 2012. China’s most powerful leader since Mao Zedong vowed at the start of the year to show “no mercy” in fighting corruption in critical sectors like finance, energy, pharmaceutical and infrastructure.

In particular, China has continued to tighten its grip over the US$66 trillion (RM283.6 trillion) finance industry, labelling bankers as “hedonistic” and creating a new financial corruption work committee, indicating a push for more permanent oversight of the sector.

For example, the CCDI in June opened a probe into Xu Zuo, a deputy general manager of the state-owned financial conglomerate Citic Group. Other financial figures probed this year include Lou Wenlong, former vice president of Agricultural Bank of China, and Li Jiping, former vice president of China Development Bank.

The CCDI also investigated former agriculture minister Tang Renjian in May, making him the third minister ousted from the current cabinet, a rare pace of removals.

As the Thursday announcement showed, even CCDI staffers themselves are not exempt from the corruption fight. The probe of the provincial graft buster, Chen Xiaobo, followed that of Li Gang, head of the CCDI’s inspection team at the Communist Party’s human resources department, late last month.

Bloomberg’s tally is based on announcements from the graft watchdog Central Commission for Discipline Inspection. It doesn’t include two ex-defence ministers of China removed by the Politburo. The 24-man body in June removed from the party former defence minister Li Shangfu, who once worked at the equipment development department, and his predecessor Wei Fenghe, who once led the Rocket Force unit that had also seen several officials purged.

Xi’s government has unseated at least 18 senior military figures since opening a corruption investigation last summer into hardware purchases dating back to 2017. In a clear indication of Beijing’s concerns about the country’s weapon procurement, the Communist Party called for changes to the military’s procurement system at the Third Plenum held in July.

The military purges reflect what state media describes as landslide corruption. In another incident, an investigation into China’s football industry has ensnared at least 14 officials, along with dozens of coaches, players, referees and club executives under scrutiny.

Xi, a football fan, has staked his promise of the “China dream” on the ability of the country to become a sports superpower, in which football is meant to play a leading role. But the performance of the men’s team remains dismal, with a string of humiliating defeats to countries like Vietnam and Syria, and the failure to qualify for the 2022 World Cup.

A similar situation also played out in Guizhou and Qujing in China’s southwest. Just in the first half of the year, the heavily indebted Guizhou province has seen 85 officials who are managed by the provincial personnel department placed under investigation. Several fallen bureaucrats either served alongside or under Qin Rupei, former vice governor of the province probed in April.

Over in Qujing, a city in Yunnan province, at least 10 current and retired officials have been investigated for graft since July.

‘Dead water’

However, the growing intensity of Xi’s campaign has contributed to a sense of unease among bureaucrats, as the risk of purges discourages them from trying new things and making mistakes.

This issue was recognised by China’s top leadership. In March, Xi wrote in party magazine Qiushi that “the purpose of strict governance over the party is not stifling people, leaving them overcautious and fearful, lifeless and inactive, turning into a pool of dead water.”

And last month, top officials called on bureaucrats to “have courage” and “dare to innovate” as they rolled out a sweeping stimulus package to bolster economic growth.

All regions and departments should “fully stimulate the enthusiasm, initiative and creativity of the whole society to promote high-quality development, and promote the continuous recovery of the economy,” the Politburo said.

Source: TheEdge - 11 Oct 2024

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