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Why Do State-Owned Enterprises Generate So Much Corruption?
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Why Do State-Owned Enterprises Generate So Much Corruption?

Wang Yong
Caixin, 2013
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Editorial Rating

8

Qualities

  • Analytical
  • Background
  • Inspiring

Recommendation

Chinese president Xi Jinping began an extensive anti-graft campaign in 2013. Its motto “killing tigers and swatting flies” communicated that the government would investigate high-ranking government officials (tigers) and local civil servants (flies) alike. So far, the government has looked into hundreds of thousands of civil servants and indicted more than 120 high-ranking officials – including senior officials at China National Petroleum Corporation (PetroChina), one of China’s largest state-owned enterprises (SOEs). Caixin columnist Wang Yong explains why state-owned enterprises are hotbeds for corruption and suggests ways to bring about change. getAbstract recommends this insightful article to anyone interested in the political and economic systems in China.

Take-Aways

  • Some officials and corporate leaders abuse their power and profit personally by exploiting China’s state-owned enterprises (SOEs), which benefit from massive amounts of government investments.
  • Chinese SOEs serve hidden political functions; for example, they serve as a vehicle to transport profit from the markets to the government and help conceal anomalous government expenses.
  • The patriarchal governance system that the SOEs use makes the individual executive so powerful that abuse and corruption are possible.

About the Author

Caixin columnist Wang Yong is a professor of civil and commercial economic law at the China University of Political Science and Law.

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