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Opinion / Editorials

SOEs no haven for corrupt managers

(China Daily) Updated: 2015-03-19 07:26

SOEs no haven for corrupt managers

Xu Jianyi, Chairman of FAW Group Corporation, speaks at an interview during the 15th Shanghai International Automobile Industry Exhibition, known as Auto Shanghai 2013, in Shanghai, China, 20 April 2013.

Xu Jianyi, board chairman and Party secretary of China FAW Group Cooperation, was placed under investigation for abuse of power on Sunday, followed by Liao Yongyuan, general manager of the China National Petroleum Corporation, on Monday. The message is the Central Commission for Discipline Inspection of the Communist Party of China meant it when it said it would extend the focus of the crackdown on corruption to State-owned enterprises this year.

Some major SOEs were targeted in the third round of inspections the Party's watchdog conducted from November 2014 until February this year. The fall of the high-ranking leaders of the country's largest automaker and largest oil company is definitely the harvest from this round of scrutiny.

It was reported that some 70 leaders of both central and local SOEs were probed for abuse of power in 2014 alone. Of the nine board directors of the CNPC, five have already been placed under investigation.

SOEs have long been the focus of public discontent and complaints because they enjoy all sorts of preferential State policies that give them an upper hand and because their leaders enjoy both the prerogatives of government ranking officials and the high salaries of business executives.

We know how important SOEs are for the country and the government, as they are involved in almost all the industries of vital importance to the country's national economy and security. Yet the large number of SOE leaders, those under the auspices of the central government in particular, who have been investigated so far for graft, should add to the public's concerns that these enterprises, which should have functioned as the pillars of the country's economy, may turn out to be rotten to the core.

For the sustainability of the national economy and for the healthy development of SOEs, the central discipline watchdogs should intensify the crackdown on SOE corruption and not show any leniency to any corrupt element they uncover.

In addition, more must be done to find out the defects and loopholes in their management that provided the room and opportunities for rent seeking and funneling of funds for personal gain. Without doing all these, a transparent, clean and efficient management cannot be put in place to ensure the companies function as they should.

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