China punishes rail officials as corruption crackdown intensifies

China's high-profile crackdown on corruption intensified yesterday with the punishment of senior railway officials amid reports President Xi Jinping has set up a special unit to investigate the scandal surrounding retired leader Zhou Yongkang.

The ruling Communist Party's central commission for discipline inspection said it had punished eight people at the state-owned China Railway Construction Corporation for spending more than €73 million on hospitality last year.

The corporation is China’s second-largest infrastructure manufacturer and it has more than two million employees in over 60 countries and regions.

Mr Zhou is the former national security chief who ruled over the police and other law enforcement agencies for nearly a decade. An investigation into a Politburo Standing Committee member – retired or sitting – is extremely rare and none has been investigated for economic crimes since the end of the Cultural Revolution in 1976.

The new anti-graft group to investigate Mr Zhou will bypass the Communist Party's internal disciplinary apparatus, and will be headed up by Beijing police chief Fu Zhenghua, who will report directly to Mr Xi, the South China Morning Post reported.

Mr Fu is the first person in the party’s history to also hold the concurrent posts of head of Beijing’s armed police, the standing committee member of the party’s Beijing municipal committee and deputy minister of public security.

Mr Xi has made a crackdown on graft part of the central plank of his government, pledging to tackle the problem from the powerful "tigers" of the elite to the "flies" at the bottom of the Communist Party.

In July, former railways minister Liu Zhijun was given a suspended death sentence for corruption and abuse of power. He was accused of accepting bribes of more than 64 million yuan (€7.7 million) over 25 years. In China, a suspended death sentence usually implies life in prison.

The once-mighty railways ministry was abolished in March after a raft of safety scandals and accusations of fraud.

China's top anti-corruption cadre, Wang Qishan, ordered that the case be dealt with severely, the Xinhua news agency reported, asking that supervisors "sign and endorse the investigation report so as to strengthen supervision and a sense of responsibility".

He ordered that the bloated hospitality costs “must be dealt with severely”, adding that 57 others were criticised, with one person facing prosecution.

Qiang Weidong, the official in charge of disciplinary affairs of the state-owned assets supervision and administration commission of the state council, or cabinet, found multiple problems with the way expenses were being filed and with accounting.

So far the crackdown on corruption has netted some big fish. The biggest is Bo Xilai, the former party boss in Dalian and Chongqing who was purged last year, and is serving a life sentence for corruption and abuse of power.