BEIJING - China’s top anti-corruption agency will inspect dozens of state-owned companies, from China Investment Corp to PetroChina, suggesting the government may be expanding its push to boost profits at some of the country’s biggest and most important state firms.
The Central Commission for Discipline Inspection (CCDI) said late on Monday that it will carry out checks on more than 30 companies, also naming China Petroleum & Chemical Corp or Sinopec, China Everbright Group and China Development Bank.
Anti-graft checks in China usually follow five-year cycles, with fresh rounds kicking off after the twice-a-decade party congress concludes.
Last year’s 20th congress handed President Xi Jinping a norm-breaking third term as party leader, while the rest of the top ranks were stacked with Mr Xi’s allies.
The agency’s announcement did not provide specifics on how the probe will play out.
But the campaign “can be interpreted as a move to step up the quality and management” at state-run companies, said Mr Jiang Liangqing, managing director at Zhuhai Greenbamboo Private Fund Management.
The move shows a “serious intention” to increase returns and deal with corruption in ways that will make market optimism over state-run companies “more sustainable”, Mr Jiang added.
China has been pushing for state-owned enterprises to improve their efficiency and profitability for years.
Such companies are expected to turn over a portion of their returns to the public budget, so as to replenish government coffers after years of massive tax cuts and beef up the national pension fund.
So far, efforts by those state-owned firms have fallen short of official goals.
The government in 2013 set a target for state companies to submit 30 per cent of their profits to the public budget.
By 2022, though, the ratio was roughly 13 per cent or lower, according to Bloomberg calculations of government data.
A gauge of the largest government-backed stocks was up slightly in Tuesday trading.
The index has gained nearly 5 per cent so far in 2023, compared with the 3.7 per cent gain in the benchmark CSI 300 Index.
The latest inspections also come as China tries to mount an economic rebound in 2023, while controlling risks in its US$60 trillion (S$80 trillion) financial sector.
Growth was battered in 2022 by the zero-Covid policy and turmoil in the property market, with gross domestic product expanding just 3 per cent.
The new probe also includes a “look back” at five financial companies that had been previously targeted in a round of anti-graft checks that began in 2021, according to the CCDI.
That effort – which ensnared at least two dozen financial regulators, state-run banks, insurers and bad-debt managers – was the first systemic review of the sector since 2015, and it has probed or penalised dozens of officials in the past year or so.
Last June, Mr Xi claimed victory in that broad probe, but this investigation and other signs suggest he is not ready to let up on the financial sector just yet – especially when he is seeking to restore economic growth and defuse major risks.
Earlier in March, for example, Beijing announced sweeping changes to the financial regulatory system.
That included the creation of a new body that absorbs the banking and insurance watchdog, as well as some functions from the central bank. BLOOMBERG
