Unraveling Corruption in China’s Defense Industry: Recent Crackdown Reveals Deep-Seated Challenges

In a China where oversight of power is already insufficient and the reality of lingering corruption persists, effectively and continuously combating corruption in the field of military industry becomes even more challenging.

Several months after leaders such as Li Yuchao, former commander of China’s Rocket Force, and Xu Zhongbo, former political commissar, were “taken down,” and Commander Ju Qiansheng of the Strategic Support Force mysteriously disappeared, along with the removal of Defense Minister Li Shangfu, the Chairman’s Conference of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) decided on December 28 to revoke the CPPCC membership of three high-ranking executives from military-industrial enterprises.

The disqualified individuals are Wu Yansheng, Chairman of China Aerospace Science and Technology Corporation; Liu Shiquan, Chairman of China Ordnance Industries Group Corporation; and Wang Changqing, Deputy General Manager of China Aerospace Science and Industry Corporation. Among them, Wu Yansheng and Liu Shiquan both held top positions in major state-owned military enterprises. China Aerospace Science and Technology Corporation is among the Fortune Global 500 companies, and the 60-year-old Wu Yansheng has received numerous honors, including the title of Advanced Individual and Outstanding Contribution Award.

While the reasons for revoking their CPPCC memberships have not been officially disclosed, the simultaneous removal of three high-level military-industrial figures from the CPPCC indicates serious allegations of disciplinary violations or legal infractions, likely related to the well-publicized corruption issues within the Rocket Force and Li Shangfu.

It is believed that the individuals exposed so far are just the tip of the iceberg. Since the beginning of this year, over a thousand high-ranking officials in the military and military-industrial complex have been under investigation. The focus of this anti-corruption storm is the military-industrial sector, especially personnel involved in procurement.

Li Shangfu, with a scholarly background, represents the military-industrial complex, having extensive experience in aerospace work and procurement. After graduating from the National University of Defense Technology in 1982, he worked at the Xichang Satellite Launch Center for about 31 years, overseeing the launch of many significant space missions. In 2013, he moved to the equipment department, serving as Deputy Minister and later Minister of Equipment Development (formerly called the General Equipment Department before the 2015 military reforms). He also briefly served in the Strategic Support Force and became the Minister of Defense in March of this year, only to be relieved of his defense minister position in October.

On December 26, a day before the removal of three military-industrial CPPCC members, Hu Wenming, former Communist Party Secretary and Chairman of China State Shipbuilding Corporation, known as the “Father of the Aircraft Carrier,” was sentenced to 13 years in prison for accepting nearly 60 million yuan in bribes. Hu Wenming was the overall commander for the development of China’s first domestically built aircraft carrier, retired in 2019, and was investigated in May 2020. He is also one of the high-ranking officials in the military-industrial complex.

On July 31, 2023, the Central Military Commission of the Communist Party of China held a promotion ceremony. General Secretary and Chairman of the Central Military Commission Xi Jinping promoted Rocket Force Commander Wang Houbin (left in the top row) and Political Commissar Xu Xisheng (right in the top row) to the rank of general. (Xinhua News Agency)

This ongoing and vigorous anti-corruption action is a strong warning to China’s military-industrial complex. In Chinese political circles, the term “military-industrial complex” encompasses a wide range of concepts, including technical bureaucrats in the fields of aviation, aerospace, nuclear industry, shipbuilding, and weaponry, as well as researchers and academics in these fields.

Over the past decade, China has invested heavily in upgrading its military capabilities, and the military-industrial complex has experienced explosive growth, achieving notable successes such as the rapid launch of new warships and the successful development of various types of aircraft and missiles. During this period, individuals from the military-industrial complex were highly regarded, with some entering the political arena and even reaching central decision-making positions. In the current Communist Party Politburo, individuals like Ma Xingrui, Party Secretary of Xinjiang Uygur Autonomous Region, Yuan Jiajun, Party Secretary of Chongqing, and Vice Premier Zhang Guoqing have backgrounds in the military-industrial complex.

However, despite the rapid development of China’s military-industrial industry, the corruption risks stemming from the concentration of power have not been eliminated. As the military-industrial complex gains control over more resources, the temptation and risk of corruption at the management level increase. The departments responsible for military procurement, such as the Equipment Development Department, and large state-owned enterprises involved in weapon development, along with the Rocket Force, find themselves not only in charge of critical national defense assets but also at high risk for corruption.

Although state-owned military-industrial enterprises are nominally “businesses,” their main goal is to serve the needs of the military, and their operational methods inevitably carry the characteristics of planned economies. In an environment of high power concentration, immense resources, and opaque internal operations, the risk of corruption cannot be underestimated.

The crackdown on high-level officials, expanding from the military to military-industrial enterprises, suggests that the downfall of figures like Li Shangfu is primarily due to economic issues rather than political reasons. This sweeping action, which continues to reverberate for months, reflects the severity of corruption problems in the military-industrial field. It underscores the urgent need for China to establish a more effective anti-corruption model and enhance oversight of power.

The development prospects of technical bureaucrats from the military-industrial complex in the Chinese political arena need to be considered from both long-term and short-term perspectives.

In the long run, the military-industrial complex will likely remain an important source of cadres for the Communist Party. Elite individuals from the military-industrial complex possess technological and economic expertise. Their capabilities honed through practical experience, coupled with their special status in the political arena, make them suitable candidates for absorption into the bureaucratic system. The current anti-corruption storm is unlikely to affect “former military-industrial complex” high-ranking officials who have been in politics for many years.

However, in the short term, elite individuals from military-industrial enterprises aspiring to climb the political ladder are expected to be impacted. On one hand, the fact that both heads of China Aerospace Science and Technology Corporation and China Ordnance Industries Group Corporation are in trouble indicates significant internal personnel turmoil within military-industrial enterprises, and the scope of the investigation surely extends beyond these two companies. On the other hand, as the military-industrial complex is currently identified as a key target for anti-corruption efforts, individuals within it, even those with the potential for promotion, are likely to have doubts that can only be dispelled after the dust settles and full trust is restored. (Lianhe Zaobao)

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