Beijing ramps up purge of military-industrial sector

Three military-industrial senior executives had their Chinese People's Political Consultative Conference (CPPCC) National Committee membership revoked during a Chairperson's Council meeting of the CPPCC this week.

This comes after several leaders of the People's Liberation Army (PLA) Rocket Force were removed, including Xu Zhongbo as political commissar and Li Yuchao as commander; the mysterious disappearance of Strategic Support Force commander Ju Qiansheng; and the removal of Li Shangfu as defence minister just a few months ago.

The three executives in question are Wu Yansheng, chair of China Aerospace Science and Technology Corp. (CASC); Liu Shiquan, chair of China North Industries Group Corp. Ltd. (Norinco); and Wang Changqing, deputy manager of China Aerospace Science and Industry Corp. Ltd. (CASIC).

Wu and Liu had influential roles as heads of mega-military national enterprises. The CASC is a Fortune Global 500 company, and the 60-year-old Wu has even won accolades as an "Advanced Individual" and "Outstanding Contributor" among others.

Chinese officials did not reveal why the three executives were stripped of their CPPCC membership, but the fact that they were removed concurrently is enough to prove that they are under suspicions of serious disciplinary and legal violations, and were likely embroiled in the PLA Rocket Force and Li Shangfu corruption case that had attracted much attention.

External observers believe that the number of people who have been "exposed" so far is most likely the tip of the iceberg, with more than a thousand high-ranking members belonging to the military and military-industrial sector subjected to investigations since mid-2023. This round of purge is targeted at the military-industrial sector, in particular those involved in procurement.

Li Shangfu, who has an academic disposition, was a poster child of the military-industrial sector. He has extensive experience in both the aerospace field and procurement. After graduating from the National University of Defense Technology in 1982, Li worked for nearly 31 years at the Xichang Satellite Launch Center and was in charge of several major aerospace launch missions.

In 2013, he was transferred to the equipment department, and was deputy chief of staff and subsequently chief of staff of the Equipment Development Department (formerly PLA General Armaments Department prior to military reform in 2015), and served a short stint at the Strategic Support Force, before being named the defence minister in March this year. He was subsequently removed from the post in October.

On 26 December, a day before the three executives had their CPPCC membership revoked, Hu Wenming, party chief and chair of China Shipbuilding Industry Co and dubbed as "the father of China's aircraft carrier", was sentenced to 13 years in prison for accepting bribes amounting to nearly 60 million RMB (US$8.5 million). Hu, who was the commander-in-chief of China's first domestically produced aircraft carrier, retired in 2019 and was subjected to investigations in May 2020. Hu was also in the upper echelons of the military-industrial sector.

This fierce and longstanding purge has sent shockwaves through the military-industrial sector. In China's political scene, the "military-industrial sector" is a broad concept that includes technocrats and scientific research and academic personnel from the aviation, aerospace, nuclear, shipbuilding and weapons sectors.

Over the past decade, China has invested a significant amount of resources into upgrading its military capabilities. The military-industrial sector is in a stage of explosive development, with the rapid launch of new warships, the successful development of various aircraft and missiles, and continuous technological breakthroughs in recent years.

During this period, the military-industrial sector has had its moment, with many technocrats from the sector entering the political arena and receiving significant attention. Some have even reached the central decision-making level; among the members of the current Politburo, Xinjiang party secretary Ma Xingrui, Chongqing party secretary Yuan Jiajun, and Vice-Premier Zhang Guoqing all have backgrounds in the military-industrial sector.

However, despite the rapid development of China's military-industrial sector, it does not eliminate the inherent risk of corruption arising from the highly centralised power structure. The more resources controlled by the military-industrial sector and the military, the greater the temptation and risk of corruption the leadership faces.

The Equipment Development Department - responsible for military procurement - as well as large state-owned enterprises involved in weapons development, and the rocket force, not only control crucial defence assets but are also high-risk areas for corruption.

Although state-owned military-industrial enterprises are "enterprises" in name, their primary goal is to serve the needs of the military, and they inevitably operate like a planned economy with controlled production. Amid a highly centralised power, vast resources and highly opaque internal operations, the risk of corruption cannot be underestimated.

The recent high-level purges, extending from the military to military-industrial enterprises, allude that the downfall of senior military figures like Li Shangfu is primarily due to economic issues rather than political reasons. This ongoing and extensive anti-corruption campaign reflects the severity of corruption in the military-industrial sector and underscores the urgent need for the establishment of a more effective anti-corruption model to supervise the exercise of power in China.

The research, development, production and procurement of military equipment are unique, require high levels of confidentiality, and cannot be openly subjected to public scrutiny - this applies to any country. In China, where oversight of power is already lacking and corruption persists, effective and sustained anti-corruption efforts in the military-industrial sector are even more challenging.

As for the development of military-industrial technocrats in Chinese politics, it requires consideration from both long-term and short-term perspectives.

In the long run, the military-industrial sector will inevitably remain an important source of cadres for the Chinese Communist Party. The elites from the sector have a combination of technological and economic expertise, and their abilities, honed through practical experience, as well as their special status in politics, make them well-suited to be taken into the bureaucratic system. The current anti-corruption storm is unlikely to affect former military-industrial figures who have been in politics for many years.

However, in the short term, the political ascent of elite figures from military-industrial enterprises is likely to be affected. On the one hand, the heads of CASC and military equipment manufacturer Norinco are both in trouble, indicating significant internal personnel turbulence, and the scope of the investigation will definitely go beyond these two organisations.

On the other hand, given that the military-industrial sector is currently a key focus of anti-corruption efforts, those within it, even if they have the potential for promotion, will probably have to wait until the action concludes and the dust settles to dispel doubts and gain full trust.

This article was first published in Lianhe Zaobao as "中国军工系塌方式腐败".

Related: China's never-ending battle against corruption | Leadership reshuffle spells trouble within China's military governance | China deepens purging of the military to prepare for battle