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Xi ramps up purge of former military-industrial chiefs

Anti-corruption campaign picks up ahead of next year's party congress

A picture of Chinese President Xi is seen behind soldiers of China's People's Liberation Army at a military base in Beijing.   © Reuters

BEIJING -- Chinese President Xi Jinping has been targeting former and sitting executives in the country's military-industrial complex, including those involved in the country's nuclear program and the development of aircraft carriers, under his anti-corruption campaign.

Last month, top anti-graft bodies for both the party and the state announced investigations into Yin Jiaxu, one-time chairman of China North Industries Group, and Liu Houcheng, an executive at China National Nuclear Corp. Both are suspected of engaging in "severe disciplinary and legal violations," the commonly used terminology denoting corruption.

The crackdowns are seen as part of Xi's attempt to cement his grip over the military ahead of the Communist Party congress slated for the fall next year.

Since taking the helm in 2012, Xi has vowed to crack down on both "tigers" and "flies," referring to senior and low-level officials who engage in corruption. The campaign reached a crescendo during the lead-up to the twice-a-decade Communist Party congress in the autumn of 2017, then petered out in recent years. The same cycle is expected to start up again this year.

Anti-graft authorities have not disclosed in detail the reason behind the investigations into Yin and Liu.

Yin served as chairman of China North Industries, the military contractor known as Norinco, between 2013 and 2018. He was previously deputy general manager at China South Industries Group, a maker of military equipment, from 2002 through 2010. While there, he was also head of group company Changan Automobile Group, which had joint ventures with both Ford Motor and Mazda Motor.

Yin Jiaxu, former chairman of defense contractor China North Industries Group, is under investigation for alleged "severe disciplinary and legal violations."

That investigators would go after a figure who has served as an executive of two leading military contractors came as a shock to the defense industry.

Some in the Chinese media have speculated that Yin was involved in malfeasance during his stint as Changan's CEO. Former executives at China South Industries Group also have reportedly used their powers for the benefit of family members.

Liu was previously an executive at an asset-management firm under China Nuclear Engineering & Construction Corp., which in 2018 merged with nuclear weapons developer China National Nuclear Corp., widely regarded as a critical piece of the military-industrial complex. After the merger, Liu was promoted to deputy chief economist at CNNC, managing costs in that capacity.

In January, authorities arrested Hu Wenming, former chairman of China Shipbuilding Industry Corp., over suspicion of taking bribes and abusing power. Hu oversaw the construction of China's first home-developed Shandong aircraft carrier.

The impact of the anti-graft probes has reached the People's Liberation Army itself, the buyer of the weapons. The standing committee of the National People's Congress announced last month that Song Xue, former deputy chief of staff of the navy, will forfeit his status as an NPC representative due to allegations of severe disciplinary and legal violations.

Because Song had been involved in aircraft carrier development, his ties with military contractors has been a subject of speculation.

The renewed crackdown comes against the backdrop of the power struggle currently in play. At the Central Military Commission, which Xi leads, a senior official in the arms equipment development department has been placed on investigation for suspected disciplinary violations. Many of those in the same department are considered close to former President Jiang Zemin.

Jiang stepped down as the general party secretary in 2002, yet remained head of the Central Military Commission for two more years, demonstrating his powerful influence over the armed forces.

The targets of the recent investigations, such as Yin and Hu, are believed to be deeply connected to Jiang and his inner circle. Xi's leadership could be moving to purge the Jiang faction.

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