China's graft-busters target SOEs ahead of reform

The State-owned Assets Supervision and Administration Commission (SASAC), the ministry-level body that directly oversees 112 central government industrial and service conglomerates, is expected to publish the reform plans before the end of March.

"Currently the anti-corruption fight at central SOEs remains severe and complicated," SASAC Chairman Zhang Yi said at an internal meeting last year, according to a post on the CCDI’s website earlier this month.

The SASAC needs to be the "eyes" of the Party and stand in the "vanguard" to curb the spread of corruption, Zhang said.

On Tuesday, Xi told a meeting of anti-graft authorities that they must step-up supervision, inspection and audits of state-owned enterprises and strengthen the Party's control over those firms.

"State-owned assets and resources are hard-earned, the shared wealth of the people of this country," Xi said, according to the official People's Daily.

"We must complete the state asset supervision system to toughen oversight of departments and positions that are rich with power, capital and resources," he said.

Anti-corruption efforts at China's most strategic conglomerates are likely to be part of an ongoing campaign rather than a one-time event, the state industry source said.

Avoiding losses

Anti-graft authorities have sent inspection teams into 36 central government-owned state conglomerates over the last two years, placing 21 executives under investigation for wrongdoing, according to statistics compiled by Reuters.

In December, the SASAC held a general meeting to discuss a key document concerning the role of company insiders and avoiding the loss of state assets during SOE reforms, the government body said in an online statement early this month.

Those plans are expected to encourage the separation of business from politics through the appointment of independent company management and boards of directors, answerable to independent state asset managers.

The government is expected to promote "mixed ownership" by backing the sale of enterprise stakes to portfolio and private investors.