China’s new leaders exert control over oil company

BEIJING  — China’s new leaders are asserting their authority over the country’s oil giant with a corruption investigation that has netted five former and current top oil executives, including the latest — the former chairman of the company.

The Ministry of Supervision on Sunday announced an investigation into Jiang Jiemin, former chairman of the country’s biggest oil company, China National Petroleum Corp. It’s the latest high-profile corruption case since China’s new leader Xi Jinping took power in November with promises to fight corruption that fuels public anger.

The investigation into Jiang, who was named in March to head the Cabinet commission that runs state companies, comes after similar probes were announced over the past week into four executives at CNPC.

News reports also say China’s top leaders have taken the unusual step of endorsing a corruption investigation into Zhou Yongkang, a former security czar and CNPC general manager with a power base in the oil industry. It would be the first time in decades that a current or retired member of the ruling Communist Party’s inner circle of power, the Standing Committee, faced such action.

Ahead of a key Communist Party meeting in November due to produce a new economic blueprint, Xi and Premier Li Keqiang appear to be making a stab at tackling the powerful state-owned industries and their allies, who reformers say have hamstrung the government.

The state industries benefit from monopolies, low-cost bank loans, free land and other favors — and are therefore opposed to the market reforms that experts say China needs to prevent growth from stagnating.

The crackdown on CNPC — the world’s second-most valuable oil producer after Exxon Mobil Corp. — shows the new administration’s determination to exert control, said Cheng Li, a Brookings Institution scholar.

The leadership wants to show “that they’ve got a certain degree of consensus in the party’s highest levels. That’s not so easy to get, but they did,” Li said. “There’s also a clear message that Xi Jinping and Li Keqiang want to undermine these vested interest groups therefore to pave the way for more market-oriented reform.”

Chinese authorities said Sunday that Jiang is being investigated over suspected serious disciplinary violations. The vague term is often shorthand in official Chinese announcements for allegations of corruption by a government official or manager of a state company. Jiang left his post as chairman of CNPC in March to head the Cabinet’s Assets Supervision and Administration Commission.

“The leadership is acutely aware that they must reel in the opposition or disarm it. They have gone on a concerted anti-corruption quest, which appeals to the general public, but is also a way of eliminating the opposition,” Lombard Street Research said in a report. “A lot of the big state firms’ senior managers sit on the Central Committee and they will need to be brought into line or discredited.”

Jiang is the first full member of the ruling Communist Party’s Central Committee, which includes the country’s top 200 officials, to be investigated since the ruling party’s once-a-decade handover of power to younger leaders in November. Two other officials who are also under investigation were alternate members of the committee.

Authorities have announced a series of investigations into senior and lower level officials following Xi’s promise to fight corruption and extravagant, wasteful work styles.

A general manager at state-owned phone company China Mobile was detained last month in connection with suspected discipline violations.

In July, former railways minister Liu Zhijun was given a suspended death sentence for bribery and abuse of power.

Last Monday, a high-profile corruption trial wrapped up for Bo Xilai, former party boss of the megacity of Chongqing.