Recenty, the investigation and handling of corruption cases in state-owned enterprises by the Chinese Communist Party’s disciplinary agencies have brought attention to the issue of officials engaging in “resignation to evade punishment” before being apprehended, sparking concerns about this practice.
The term “resignation to evade punishment” refers to the behavior of attempting to escape investigation by retiring or resigning in advance, or taking positions in companies within their original business jurisdiction to gain personal benefits.
On June 26th, former chairman of China Communications Construction Company, Wang Tongzhou, was taken away for investigation. That same evening at 9 pm, officials from the State-owned Assets Supervision and Administration Commission of the State Council held a meeting at the company, announcing a major leadership reshuffle – with Song Hailiang appointed as the Party Secretary and Chairman, and Zhang Bingnan as the Deputy Party Secretary and General Manager.
In a public notice issued by China Communications Construction Company on June 14th, it was mentioned that during a board meeting held through telecommunications on June 13th, director Wang Haihuai was on leave for personal reasons. Wang Haihuai was the former general manager of China Communications Construction Company, working alongside Song Hailiang. Both the former chairman of China Communications Construction Company, Liu Qitao, and the former chairman of its subsidiary, China Communications Construction Real Estate, Li Yongqian, could not be reached.
China Communications Construction Group Co., Ltd. is a centrally-owned enterprise mainly engaged in comprehensive infrastructure services. On August 5, 2024, China Communications Construction Group Co., Ltd. was ranked 63rd on the 2024 Fortune Global 500 list.
At the end of June, it was revealed by multiple sources that Zhang Yadong, former chairman of Greentown China, was intercepted at the Hong Kong International Airport departure gate by authorities. It was reported that Zhang Yadong was preparing to board a flight to Canada. Zhang Yadong had just resigned as an executive director and chairman of the board on March 27 this year.
China Communications Construction Group is the largest single shareholder of Greentown China, which is a mixed-ownership enterprise with a state-owned background.
Greentown China achieved a net profit attributable to shareholders of approximately 1.596 billion yuan in 2024, a sharp decline of 48.8% year-on-year. Despite an increase in revenue, Greentown China’s total debts have nearly reached 400 billion yuan.
Subsequently, the official website of the Central Commission for Discipline Inspection of the Chinese Communist Party and the National Supervision Commission emphasized closely monitoring “resignation to evade punishment” in state-owned enterprises, calling for a dense and solid institutional protective network.
This topic has sparked widespread discussions among the public in mainland China. Many netizens believe that the incidents involving Zhang Yadong being intercepted at the airport, major leadership changes at China Communications Construction Group, and the renewed calls from the Chinese Communist Party to closely monitor “resignation to evade punishment” in state-owned enterprises are not mere coincidences, indicating that these issues are interlinked.
“Resignation to evade punishment” first appeared in official reports in 2021, with many disciplinary cases involving officials resorting to this practice.
On July 13, an article by the media organization “Valley Trends,” known for its in-depth analysis of China’s macroeconomic trends, real estate trends, urban development, and overseas investments, pointed out that the recent emphasis on monitoring state-owned enterprises engaging in “resignation to evade punishment” by the central government signals something unusual.
Corrupt individuals continue to seek loopholes, constantly innovating corrupt practices that are becoming more covert and diverse. The methods of “resignation to evade punishment” include: 1. “Evasion-type,” where some leading cadres, faced with illegal and disciplinary behaviors during their tenure, attempt to retreat to avoid punishment and “land safely” through resignation; 2. “Option-type,” where they seek benefits for related parties during their tenure but defer them until after resigning or retiring, known as “receive benefits after leaving, not during service”; 3. “Profit-seeking type,” where they “build nests early” to convey benefits externally, and after leaving, they take up positions in companies within their original business jurisdiction to gain advantages.
The article mentioned how some corrupt individuals are eager to retire or resign early in an attempt to evade punishment for their wrongdoings.
State-owned enterprises, energy, tobacco, pharmaceuticals, and other key sectors are where power, funds, and resources are concentrated, making them a breeding ground for corruption due to the larger scope for power rent-seeking and historically pronounced issues in anti-corruption efforts.
Among them, state-owned enterprises, as pillars of the national economy, control a significant amount of critical assets and resources. However, in reality, some enterprises suffer from problems such as excessive concentration of power in the top leadership, inadequate oversight mechanisms, which may lead to embezzlement of state-owned assets and corrupt decision-making, posing a threat to the security of state-owned capital.
The article suggests the need to specify regulations on post-employment restrictions. It calls for clearly defining the scope of post-employment bans for leadership and key personnel in state-owned enterprises, especially in sectors with high corruption risks such as finance, energy, and infrastructure, and suggests establishing a system of “industry blacklists.”
Furthermore, it stresses the importance of strengthening approval management for post-employment changes and enhancing dynamic supervision by establishing a full-cycle warning and tracking system. It proposes creating electronic files for departing personnel to monitor their employment history, related enterprise registration information, fund flows, conducting routine post-employment follow-ups to prevent “surface resignation and covert manipulation.”