China’s Defence Minister Under Investigation for Corruption

Anti-corruption authorities in China have allegedly opened an inquiry into Defence Minister Li Shangfu, over the procurement of military equipment. Li has been missing from public view for over two weeks.

According to a regional security officer and three persons in direct contact with the Chinese military, the inquiry into Li is about procuring military equipment. Reuters was unable to get information on which equipment purchases were under investigation.

According to two persons in close contact with the military, eight senior officers from the Chinese military’s procurement unit, which Li oversaw from 2017 to 2022, are also under investigation.

According to the two persons, the military’s powerful disciplinary inspection board is investigating Li, appointed defense minister in March, and the eight officials.

Reuters’ extensive investigation of the allegations against Li and the timing of the investigation is based on interviews with people who routinely engage with senior Chinese political and defense authorities and regional officials with an intimate understanding of Chinese politics.

A spokeswoman for China’s Foreign Ministry told reporters on Friday that she was unaware of the situation. The State Council and the Defence Ministry did not respond to calls for comment immediately. Li was only available after some time.

The Financial Times reported on Friday, citing US officials, that the US government believes Li is under investigation. According to the Wall Street Journal, he was whisked away for interrogation last week by a person close to decision-making in Beijing.

The US State Department did not immediately respond to a request for comment on media allegations that US intelligence agencies suspected Li of corruption.

On Friday, US Ambassador to Japan Rahm Emanuel asked on X, formerly Twitter, whether Li was under house arrest. The US embassy in Tokyo did not immediately respond to a request for comment.

Li was last spotted in Beijing on August 29, giving a keynote lecture at an African security event. He had previously visited Russia and Belarus earlier in the month.

According to a person in direct communication with the military and two foreign security officials briefed on the situation, the investigation into the minister began immediately after his return from that trip.

According to a Vietnamese official, his ministry had canceled Li’s visit to Vietnam for the two countries’ annual defense summit on Sept. 7-8. Two Vietnamese officials said Beijing informed them of Li’s “health condition” when it postponed the event.

Li’s absence from that meeting and meetings with a top Singaporean military officer in China the same week prompted regional officials and social media users to speculate about his whereabouts.

The investigation into Li comes after China’s unexplained replacement of Foreign Minister Qin Gang in July after a protracted absence from public view and a shake-up in the leadership of the People’s Liberation Army’s elite Rocket Force, which is in charge of conventional and nuclear missiles. Chinese officials initially said Qin’s absence was due to illness.

Some experts and diplomats have questioned China’s rapid changes in leadership when its economy is trying to recover from severe economic closures, and ties with the US have deteriorated further on various concerns.

Both Li and Qin were considered selected by President Xi Jinping, making their absence after less than a year on the job all the more remarkable. The two men have major public responsibilities and are also members of China’s five state councilors, a position that ranks higher than a regular minister.

In July, the military’s procurement unit announced its intention to “clean up” its bidding process. It asked the public to report any abnormalities from October 2017, when I was in charge. He was in charge of the unit until October 2022.

When asked last month by reporters about the whereabouts of two other former senior military leaders who had not been seen in public in a while and whether they were under investigation, a Defence Ministry spokesman said the military has “zero tolerance for corruption,” without denying that they were under investigation.

“We must always sound the alarm, investigate every case, punish every instance of corruption, and resolutely win the difficult and protracted battle against corruption,” stated the spokesman.

Li was chosen as deputy commander of the military’s then-new Strategic Support Force in 2016, an elite force tasked with speeding the development of space and cyber warfare capabilities. The next year, he was assigned to lead the military’s procurement unit.

The United States sanctioned Li 2018 for purchasing weapons from Russia’s top arms exporter, Rosoboronexport.

Beijing has repeatedly stated that it wants the restrictions lifted to promote improved negotiations between the Chinese and American military. According to a Pentagon official, US Defence Secretary Lloyd Austin attempted to meet with Li during a defense conference in Singapore in June but only got within niceties.

China Blacklists Northrop Grumman

Meanwhile, China’s foreign ministry announced that China will blacklist US aerospace and military corporations Northrop Grumman (NOC.N) and Lockheed Martin (LMT.N) for supplying weapons to Taiwan.

According to ministry spokesperson Mao Ning during a regular news briefing, China’s Anti-Foreign Penalties Law is imposing the penalties.

“We urge the United States to effectively adhere to the one-China principle… cease US-Taiwan military liaison and stop arming Taiwan, or else it will face a resolute and forceful retaliation from the Chinese side,” she added.

Mao identified Lockheed Martin Corp.’s Missouri division as the prime contractor directly involved in an arms transfer to Taiwan on August 24 and stated that Northrop Grumman had previously cooperated in selling weapons to Taiwan.

China has already imposed penalties on US firms for providing weapons to Taiwan, and it is unclear how they function or what they are supposed to achieve, given that neither company sells to China.

According to a report to Congress, US President Joe Biden authorized the transfer of up to $80 million in funding to Taiwan under the Foreign Military Financing program last month.

The restrictions were imposed following a week of intense military activity surrounding Taiwan’s democratically-governed island, during which a Chinese naval formation led by the aircraft carrier Shandong passed within 60 nautical miles (111 km) of the island’s southeast.