Chinese defense minister under investigation for corrupt procurement

[September 15, 2023]  (Reuters) -Defense Minister Li Shangfu, who has been missing from public view for more than two weeks, has been placed under investigation by Chinese authorities, according to 10 people familiar with the matter.

The investigation into Li relates to procurement of military equipment, according to a regional security official and three people in direct contact with the Chinese military. Reuters was unable to obtain details on which equipment purchases were under scrutiny.

Eight senior officials from the Chinese military's procurement unit, which Li led from 2017 to 2022, are also under investigation, according to two of the people in direct contact with the military.

The probe into Li, who was appointed as defence minister in March, and the eight officials is being carried out by the military's powerful disciplinary inspection commission, those two people said.

Reuters' detailed examination of the allegations against Li and the timing of the probe is based on interviews with sources who interact regularly with senior Chinese political and defense leaders, and regional officials with close knowledge of Chinese politics.

A Chinese Foreign Ministry spokeswoman told reporters Friday that she was not aware of the situation. The State Council and the Defense Ministry did not immediately return requests for comment. Li could not immediately be reached.

The Financial Times reported on Friday, citing U.S. officials, that the U.S. government believes Li has been placed under investigation. The Wall Street Journal cited a person close to decision making in Beijing as saying he had been taken away last week for questioning.

The U.S. State Department didn't immediately respond to a request for comment on the media reports that U.S. intelligence officials believed Li was under investigation for corruption.

U.S. Ambassador to Japan Rahm Emanuel on Friday posed the question on X, formerly Twitter, whether Li was under house arrest. The U.S. embassy in Tokyo did not immediately have further comment.

Li was last seen in Beijing on Aug. 29 giving a key-note speech at a security forum with African nations. Earlier that month, he also visited Russia and Belarus.

The probe into the minister started shortly after his return from that trip, according to a person in direct contact with the military and two foreign security officials briefed on the case.

By Sept. 3, his ministry had cancelled a visit by Li to Vietnam for an annual defense meeting between the two countries scheduled for Sept. 7-8, according to a Vietnamese official. Beijing told officials in Hanoi that Li had a "health condition" when it postponed the event, two Vietnamese officials said.

Li's failure to attend that meeting, and talks with a senior Singaporean military official in China the same week, raised questions among regional diplomats and social media users about his whereabouts.

China’s Defence Minister Li Shangfu attends the 20th IISS Shangri-La Dialogue in Singapore June 2, 2023. REUTERS/Caroline Chia/File Photo

The probe into Li follows China's unexplained replacement of Foreign Minister Qin Gang in July after a prolonged absence from public view and a shake-up of the leadership of the People's Liberation Army's elite Rocket Force, which is responsible for conventional and nuclear missiles. Chinese officials initially said Qin's absence was also due to health reasons.

The moves have raised questions from some observers and diplomats about the abrupt changes in China's leadership at a time when its economy is struggling to recover from strict pandemic closures and its relations with the United States have further soured over a range of issues.

Both Li and Qin were seen by observers ok Chinese politics as handpicked by President Xi Jinping, making their absence after less than a year on the job particularly notable. The two men had prominent public-facing roles and also serve among China's five state councilors, a post outranking a regular minister.

"CLEAN UP" IN MILITARY PROCUREMENT

In July, the military's procurement unit took the highly unusual step of issuing a notice that it was looking to "clean-up" its bidding process. It invited the public to report irregularities dating back to Oct. 2017, when Li was at its helm. He ran the unit until October 2022.

When asked last month by reporters to comment about the whereabouts of two other former senior military leaders who had not been recently seen in public and if they were under investigation, a Defense Ministry spokesman said the military has "zero-tolerance for corruption", without denying the possibility that they were the subject of a probe.

"We must always blow the horn, investigate every case, punish every instance of corruption and resolutely win the hard and protracted battle against corruption," the spokesman said.

In 2016, Li was named deputy commander of the military's then-new Strategic Support Force - an elite body tasked with accelerating the development of space and cyber warfare capabilities. He was then tasked the following year with heading the military's procurement unit.

Li was sanctioned by the U.S. in 2018 over weapons purchases from Russia's largest arms exporter, Rosoboronexport.

Beijing has repeatedly said it wants those sanctions dropped to facilitate better discussions between the Chinese and U.S. militaries. U.S. Defense Secretary Lloyd Austin sought talks with Li during a defense conference in Singapore in June, but did not get beyond pleasantries, according to a Pentagon spokesman.

(Reporting and writing by Reuters newsroom; Editing by Katerina Ang and Daniel Flynn)

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