Date
10 December 2018
As a highly capital intensive sector without effective oversight, the civil aviation industry in China has been a breeding ground for power-abuse and corruption. Representational image: Reuters
As a highly capital intensive sector without effective oversight, the civil aviation industry in China has been a breeding ground for power-abuse and corruption. Representational image: Reuters

Why is China’s aviation industry so ridden with corruption?

The Chinese Communist Party’s Shanghai commission for discipline inspection announced on August 6 that the chairman of the Shanghai Airport Authority, Wu Jianrong, has been suspended from office and placed under criminal investigation for suspected misconduct.

As Beijing has been getting tough on corruption in the civil aviation industry, it appears there are always some new “big tigers” for the authorities to catch.

And it is not difficult to explain why: as a highly capital intensive sector without effective oversight, the civil aviation industry in China has been a breeding ground for power-abuse and corruption over the years, making it extremely easy for aviation authorities, intermediaries, airlines and airports to form “corruption chains”.

Given that, Wu wasn’t the first major aviation official to have been brought down by corruption, and definitely won’t be the last one.

In fact before Wu’s downfall, just within a year between September 2015 and October 2016, the airport chiefs of Beijing, Guangzhou and Shenzhen were arrested for graft charges one after the other.

And if we look back to a little bit earlier, we can find that between 2005 and 2015, a total of 12 senior executives of China Eastern Airlines were removed from office for corruption.

In 2010, the then CEO of Shenzhen Airlines, Li Kun, was detained and investigated by authorities on suspicion of “economic crimes”. And before that, Li Zeyuan, a former senior adviser to Shenzhen Airlines, had been arrested for the same charges.

As one of the four leading airlines in the mainland, China Southern Airlines (CSA) currently owns more than 700 passenger as well as cargo planes, and is ranked Asia’s No.1 airline in terms of fleet size.

Despite the size, the company has also remained a notorious hotspot for corruption in the mainland aviation industry over the past decade.

CSA saw eruptions of major corruption scandals in 2006, 2010, 2013 and 2015.

On the New Year’s Day of 2015, its then chief financial officer Xu Jiebo was apprehended on graft charges. In October in the same year, another deputy general manager, Liu Qian, was also taken away by the authorities.

And it just got worse. In April 2017, Si Xianmin, the former general manager and board chairman of the CSA Group, was found guilty of accepting bribes, and was sentenced to 10 years plus 6 months in jail along with a fine of one million yuan.

According to data released by Intermediate People’s Court of Shenzhen, Si had accepted an estimated 7.89 million yuan in bribes between 2005 and 2014.

If anything, the series of graft scandals engulfing the CSA in recent years represented the tip of the iceberg as far as the overall scale of corruption in China’s aviation industry is concerned.

As the nation’s air travel market witnessed jaw-dropping growth over the past 20 years, so did corruption among top executives in the industry.

Given that Beijing’s escalating anti-graft crackdown in recent years has failed to deter airline and airport chiefs across the mainland from taking bribes, it suggests things may have gone seriously wrong not only with the people in charge, but also with the personnel and oversight systems governing the aviation industry.

This article appeared in the Hong Kong Economic Journal on Aug 11

Translation by Alan Lee

[Chinese version 中文版]

– Contact us at [email protected]

RC

Hong Kong Economic Journal contributor

EJI Weekly Newsletter

Please click here to unsubscribe