China’s Anti-Corruption Campaign Moves to the Telecom Sector

Son of former Party leader Jiang Zemin said to be next
June 21, 2015 Updated: June 22, 2015

State-owned companies are next on the Chinese regime’s anti-corruption watchdog inspection list, and the feedback given to one particular sector—telecommunications—could herald the start of a big takedown. For more than a decade some of China’s largest telecommunications firms have been under the direct or indirect control of Jiang Mianheng, the son of former Party leader Jiang Zemin.

On June 17, Central Committee of Discipline Inspection (CCDI) Secretary Wang Qishan announced that 26 state-owned enterprises (SOEs) would be inspected, state-run Xinhua News Agency reported.

The companies include China State Construction Engineering Corporation, China Shipbuilding Industry Corporation, China Ocean Shipping Company, Shanghai Baosteel Group, Wuhan Iron and Steel Corp, PetroChina, Huaneng Group, China Southern Power Grid, China Dongfang Electric, China Nuclear Engineering, and China Mobile.

China Mobile leaders “formed a parasitic family that hunted and feasted on state assets.”
— Dong Hong, anti-corruption inspector

Already, some officials in these SOEs were found abusing their power, taking bribes, and selling positions, Wang said.

Over the past two days, Dong Hong, the director of the CCDI’s 12th inspection team, singled out in a report nine firms where abuses were rife. The criticism of two telecommunication firms, China Mobile and China Telecom, were particularly harsh and lengthy.

The leaders of China Mobile, Dong noted, had “formed a parasitic family that hunted and feasted on state assets.”

The Beijing branch of China Telecom was said to have violated multiple Party disciplines, while the Shanghai division spent huge amounts of state assets to build upscale clubs.

Dong said China Telecom’s leaders formed an alliance of interest with certain external entities for the purpose of siphoning national assets. Some leaders acted as brokers and manipulated connections to amass wealth.

No arrests have been announced yet, but that may yet happen if the hammer is eventually brought down on the telecommunication companies.

China Mobile and China Telecom are linked to Jiang Mianheng, the son of former Chinese leader Jiang Zemin. Present Party chief Xi Jinping’s anti-corruption campaign is widely interpreted as a Party rectification drive targeting Jiang and his political network.

The younger Jiang is not on the board of the telecommunication companies, but he owns shares through an investment company he controls, the Shanghai Alliance Investment Ltd. (SAIL).

It is unclear if Jiang Mianheng holds significant influence in the affairs of China Mobile and China Telecom, but there are signs that he is trying to get out of the spotlight. In January, Jiang resigned from China’s top scientific research academy due to “age reasons” even though he is a couple of years away from retirement.

If Jiang Mianheng himself comes under direct assault in this round of disciplinary inspections, Xi Jinping and Wang Qishan will likely then turn to their main prize—Jiang Zemin.