Combat-Ready China Military Seen as Xi’s Goal in Graft Battle

Photographer: Lam Yik Fei/Getty Images

While it has the second biggest military budget in the world, the 2.3 million-strong Peoples' Liberation Army (PLA) has fought few real battles since China invaded Vietnam in 1979. Close

While it has the second biggest military budget in the world, the 2.3 million-strong... Read More

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Photographer: Lam Yik Fei/Getty Images

While it has the second biggest military budget in the world, the 2.3 million-strong Peoples' Liberation Army (PLA) has fought few real battles since China invaded Vietnam in 1979.

China President Xi Jinping’s first public move to combat corruption in the People’s Liberation Army is the biggest step in his campaign to build it into a combat-ready force after decades in which the military served partly as a money-making vehicle.

Former Lieutenant-General Gu Junshan, 57, previously deputy head of the army’s General Logistics Department, faces charges including embezzlement, bribery and abuse of power, according to the official Xinhua News Agency. Chinese media has reported that Gu amassed a fortune from kickbacks and accumulated a string of properties and even a solid gold statue of Mao Zedong.

The case against Gu, the highest-ranking officer to be tried by a military court since 2006, indicates Xi’s anti-graft campaign is reaching further into the ranks of the world’s largest army by headcount. Xi, who took over as head of the Central Military Commission when he became Communist Party secretary in November 2012, is seeking to weed out corruption as he calls on China’s military to upgrade standards so it’s capable of fighting wars.

“If they really get serious and defense structural reforms are successful it would make them a very potent fighting force,” Christopher Johnson, Freeman Chair in China Studies at the Center for Strategic & International Studies, said by phone from Washington. Xi “knows he has to create that sense of existential challenge or urgency in order to push through these reforms because there’s such strong resistance from the people who have benefited from the current system.”

Source: AFP/Getty Images

The residence of Former Lieutenant-General Gu Junshan stands in Puyang, Henan province on Jan. 17, 2014. As investigators raided his house they found cases of Moutai wine and a solid gold statue of Mao Zedong, said financial magazine Caixin. Close

The residence of Former Lieutenant-General Gu Junshan stands in Puyang, Henan province... Read More

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Source: AFP/Getty Images

The residence of Former Lieutenant-General Gu Junshan stands in Puyang, Henan province on Jan. 17, 2014. As investigators raided his house they found cases of Moutai wine and a solid gold statue of Mao Zedong, said financial magazine Caixin.

Endemic Corruption

While it has the second biggest military budget in the world, the 2.3 million-strong PLA has fought few real battles since China invaded Vietnam in 1979. Even after the party ordered the military out of the business arena in the late 1990s under then-President Jiang Zemin, PLA land deals and construction projects enabled a lot of corruption to continue, said Johnson, a former senior China analyst at the Central Intelligence Agency.

An indication of problems that remain within the armed forces was reported by the PLA Daily yesterday, which said inspectors had found issues with construction projects, land transfers and low-income housing in the Beijing and Jinan military area. Inspections of army units were ordered by the Central Military Commission last year.

Retired General Xu Caihou, 70, a former vice-chairman of the commission and member of China’s elite politburo until 2012, is also being investigated for corruption, the South China Morning Post reported March 20. In 2006 Wang Shouye, a deputy commander in the PLA Navy, received a suspended death sentence for taking bribes worth 160 million yuan ($25.8 million), according to state media.

‘Go Higher’

“Xi wants to return to the ideals of the original People’s Liberation Army,” said Ni Lexiong, a professor at the Shanghai University of Political Science and Law who specializes in military affairs. “There is great determination. This is likely to go even higher. There can’t only be one Gu Junshan.”

Gu was under investigation for two years, financial magazine Caixin reported Jan. 16. He owned more than 10 flats near the Second Ring Road in central Beijing on land that used to be owned by the military. A parcel of land that sold for more than 2 billion yuan in Shanghai for commercial development by the military earned Gu a 6 percent kickback, it said.

As investigators raided his house in the city of Puyang in Henan province they found cases of Moutai wine and the gold Mao statue, the magazine said.

Two telephone calls to the office of Geng Yansheng, spokesman at the Ministry of Defense, weren’t answered during office hours. Gu wasn’t contactable for comment.

Tigers, Flies

Since Xi became party secretary he has vowed to take on both “tigers,” or high-level officials, and “flies,” meaning lower-ranking cadres. Some of those under investigation or facing charges have links with former security chief Zhou Yongkang, who headed a state oil company and ran Sichuan province in the southwest before he joined the Politburo Standing Committee, the highest body of party power, in 2007.

Investigators have questioned a number of senior officials with links to Zhou, 71, who was also in charge of China’s domestic security apparatus. Authorities seized assets worth at least 90 billion yuan from relatives and associates of Zhou, Reuters reported March 30, citing unidentified people.

There have been no official statements about Zhou, who would be the highest-level official probed for corruption since the Communists took power in 1949. Premier Li Keqiang vowed to extend the fight against corrupt officials, in a March 13 speech to mark the end of the annual meeting of the national legislature.

Mafia Gangs

“No matter who he is and how senior his position is, if he violates party discipline and the law of the country, he will be severely dealt with and punished to the full extent of the law,” Li said. The premier didn’t refer directly to the case of Zhou.

A trial of the former Sichuan Hanlong Group Co. chairman Liu Han and 35 others on charges of murder and running mafia-like gangs opened in central Hubei province March 31, the court said on its official Weibo account. Liu, who was born in the city of Guanghan in Sichuan, had previously done business with Zhou Bin, acknowledged by state media to be the son of Zhou Yongkang, Caixin reported on March 13.

Signs are emerging that Xi’s anti-corruption campaign could be creating a backlash among former leaders.

Former Presidents Jiang and Hu Jintao warned Xi not to expand his anti-corruption drive too far, the Financial Times reported yesterday, citing three people familiar with the matter. Further escalation of the campaign could hurt their interests, the paper said.

Defense Spending

China’s military serves the party rather than the country or state. The central government will boost defense spending 12.2 percent this year as the navy extends its reach into neighboring waters at a time of escalating territorial tensions in both the East and South China Seas.

At the same time, the PLA is considering revamping its official evaluation system to focus on competence, clean conduct, political reliability and trustworthiness, Xinhua reported Feb. 17. It will also audit military personnel before deciding to promote them or let them retire, Xinhua reported in September.

Many in the PLA think there are big reforms ahead, according to Andrew Scobell, a senior political scientist at the Rand Corporation who has studied China’s military.

“It seems that Xi Jinping is more serious than many people thought,” he said. “Yet it is one thing to go after some big fish, and another thing to change the culture.”

To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Neil Western

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