Changes to Top Executives at Chinese State Telecom Giants Signal Shifting Political Ground

Key personnel at three prominent state-run telecommunication firms in China could be replaced, while a number were recently detained by the authorities, according to recent reports from Chinese media.

The leadership shakeup follows a fresh round of inspections of state-owned companies carried out under Communist Party chief Xi Jinping’s anti-corruption campaign, and appears to be aimed at Jiang Mianheng, a powerful backroom figure in the telecommunications industry, and his father, former Chinese leader Jiang Zemin.

On Aug. 20, Caixin, a Chinese business magazine, reported that the top executives at China Mobile, China Telecom, and China Unicom—the three largest telecommunication companies in China—were slated to be transferred or removed from their posts.

Executives of the firms were accused of having ‘formed a parasitic family that hunted and feasted on state assets.’

Shang Bing, the vice minister of China’s industry and information technology ministry, has been tipped to succeed Xi Guohao as chairman of China Mobile, according to Caixin.

Meanwhile, the chairmen of China Telecom and China Unicom, Wang Xiaochu and Chang Xiaobing, will be made to swap companies.

State-run news outlets People’s Daily and Xinhua News Agency subsequently carried Caixin’s article.

A day earlier, Caixin said in an exclusive report that Zhong Tianhua, the head of China Mobile’s Guangdong branch, was dismissed, while other executives in Chongqing, Shanxi, Hunan, Guangdong, and Beijing had been “handed over to judicial authorities.”

China Mobile is the country’s largest mobile telecommunications company. China Unicom and China Telecom are respectively the second and third largest mobile telecommunications providers in China.

Anti-Corruption

The reports by Caixin are likely to be accurate—Hu Shuli, Caixi’s chief editor, is a longtime associate of Wang Qishan, the Chinese Communist Party’s anti-corruption agency chief. Analysts of Chinese elite politics generally view Caixin as Wang’s unofficial mouthpiece for anti-corruption news and developments.

In June, Wang had announced that 26 state-owned firms, including China Mobile and China Telecom, would be probed in the first round of discipline inspections for 2015.

Earlier both telecommunications giants were singled out in report by the Central Committee of Discipline Inspection (CCDI) for rampant corruption—abuse of power, selling positions, and taking bribes. Executives of the firms were accused of having “formed a parasitic family that hunted and feasted on state assets.”

In April, Leng Rongquan, a former vice general manager and deputy Party secretary at China Telecom, was one of first top executives to be purged following an investigation.

The current top-level changes in the three telecommunication giants as reported by Caixin, however, suggest that Chinese authorities are steps away from investigating a powerful figure—telecommunications magnate Jiang Mianheng.

Father and Son

During the 1990s, Jiang Mianheng gained a sizeable stake in China’s telecommunications industry, which was then going through reform, through a key Shanghai city investment firm he controlled. Jiang was believed to have capitalized on his familial ties—father Jiang Zemin was then the leader of Chinese Communist Party—to grease the wheels and advance his business interests.

Jiang Mianheng has remained conspicuously out of the public eye, and even resigned from a key role in China’s top scientific research academy last December.

Analysts see the expansive probe and personnel shuffling in the three telecommunication firms—an industry closely linked to Jiang Mianheng—as a telling sign that the Jiang family’s political influence is on the wane, and even that they may themselves be caught up in anti-corruption investigations.

Many high-ranking Chinese officials who have been purged in Xi Jinping’s two and a half year-long Party rectification campaign—former security czar Zhou Yongkang, and top military generals Xu Caihou and Guo Boxiong—are known associates of Jiang Zemin.

“From the current situation, I don’t think the arrest of Jiang Mianheng is the key issue—very likely Jiang Zemin, Zeng Qinghong, and several others will be caught in the same net,” said Zhang Jian, a researcher of China issues, to New York-based Chinese language broadcaster New Tang Dynasty Television.

Zhang adds that the Chinese authorities could go through Jiang Mianheng to build up a corruption case against Jiang Zemin, and use that as a formal charge. After leaving office in 2002, Jiang retained tremendous influence for the next decade through a network of cronies and appointees. Xi Jinping’s purge of the Party has mostly been focused on rooting out this network.

Jiang Zemin could presently already be in a precarious situation. A source close to China’s top leadership in Beijing recently told Epoch Times that Jiang and his two sons were “placed under control” on Aug. 15. A few days later a large stone stele inscribed with his calligraphy outside the Central Party School was moved, whether removed entirely or shifted inside the campus is unclear. Either scenario would be inauspicious for his continued political influence.

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