Rocket-Powered Corruption: Why the Missile Industry Became the Target of Xi’s Purge
The People’s Liberation Army is experiencing yet another wave of purges by Chinese leader Xi Jinping. Since July 2023, about 15 military and defense industry officials have been taken down by Xi, including defense minister Li Shangfu, the commander and commissar of the Rocket Force, and several high-ranking officers and civilian leaders in the defense industry. On Dec. 27, the Standing Committee of the National People’s Congress expelled nine senior cadres from the country’s nominal law-making body without explanation, further adding to the suspicion that a large-scale corruption scheme that democratically touched many levels of the military and the Chinese defense industry had been discovered by Xi. Just a week after Xi’s New Year speech to the People’s Liberation Army that stressed “fighting the uphill and protracted battle against corruption,” Bloomberg reported that Xi’s purge was likely due to rampant corruption found within the Rocket Force, citing alarming stories from U.S. intelligence such as mishandling of missile fuel and silo lid malfunctions that could prevent the launch of inter-continental ballistic missiles. While some sources contested the “water-filled missile” story, as liquid-fueled missiles are normally empty to prevent accidents, any corruption at the level of compromising Chinese missile readiness adds to the growing suspicion that the deep-rooted corruption has eroded the Chinese military’s combat readiness and its potential to conduct large-scale operations in the near future.
It should not be surprising to see high levels of corruption in China’s secretive custodian of nuclear-tipped ballistic missiles. This is not only because bribery, rent-seeking, and graft are commonplace in the loosely supervised Chinese military and its defense acquisition systems. Large, politically salient, yet rarely tested systems like nuclear missiles are also magnets of bad behavior. These systems are indispensable as instruments of strategic power, given large budgets to maintain and operate, and are seldom practically tested for readiness. Moreover, the fact that the hand-picked top brass of the military and the defense industry are found to be egregiously corrupt could indicate widespread disbelief among senior cadres that the People’s Liberation Army will need to fight in the near future.
This calls into question whether Xi could accurately assess his military’s actual readiness to fulfill their historical mission when called upon. The removal of so many senior cadres in a matter of months and a retroactive anti-corruption probe into the acquisition system suggest that Xi must deal with a problem that is bigger than greed: institutionalized corruption and perhaps a lack of faith in his vision of a modernized, politically reliable, ready-to-go military. This might prompt Xi to prioritize personal loyalty and obedience from officers over everything else, including operational competence and leadership records. This will only make Xi’s plans for Taiwan less predictable to the outside world.
The Corruption Sweet Spot
The current wave of purge distinctively targets corruption within the high-cost acquisition programs, most notably the ones in the missile industry. Over half of the 15 officials removed without official explanation were senior cadres leading the Rocket Force, with several more previously responsible for the Equipment Development Department of the Central Military Commission. These include former top brass Zhou Yaning, Zhang Zhendong, the recently removed Rocket Force commander and commissar Li Yuchao and Xu Zhongbo, and former Equipment Development leaders Li Shangfu and Rao Wenmin.
A closer look at all 15 fallen cadres reveals that their careers in the People’s Liberation Army military and defense industry have one thing in common: Rockets. Aside from the military officers who commanded missile brigades, manned space programs, or weapons acquisition programs that include missiles (Air Force Gen. Ding Laihang seems to be the only exception), the three civilian cadres whose removal was announced on Dec. 27 were also rocket specialists in their careers. Liu Shiquan, a former executive at China Aerospace Science & Industry Corp and the chairman of China North Industries Group Corp before his removal, began his career as a missile engineer. He led several ballistic missile research programs and wrote a book on ballistic missile defense penetration in 2003. Before taking the helm at the China Aerospace Science & Industry Corp, he directed the 4th Institute (航天四院, also known as the Academy of Aerospace Solid Propulsion Technology), which worked on the solid fuel technology that powers the DF-31 inter-continental ballistic missile and the JL-2 submarine-launched ballistic missile. Wu Yansheng and Wang Changqing, the other two civilian industrial executives who led the China Aerospace Science & Industry Corp, were also rocket engineers. Wu spent a decade in the manned space program before being elevated to leadership. Wang led the China Aerospace Science & Industry Corp 3rd Institute, which works on missile research, among other military aerospace technologies. Based on these cadres’ career trajectory and influence in the Chinese defense industrial base, the series of removals in the past few months seemed to be laser-focused on cleaning out rot within the missile industry.
Why missiles and rockets, then? At first glance, it may be counterintuitive to see jaw-dropping corruption in the area in which the Chinese military has seen numerous successes. The People’s Liberation Army currently operates the largest land-based ballistic missile fleet in the world and has achieved dazzling successes with advanced missile technologies such as the hypersonic DF-17, a fractional orbital bombardment system, and the DF-21D anti-ship ballistic missile, which boosted long-range precision-strike capabilities against American surface assets. However, corruption is more intuitive if one considers it a rational calculus that balances the gain from corruption against the risks of being caught. First, the missile industry, monopolized by state-owned enterprises and state research institutions, is among China’s most well-funded defense portfolios. While the exact budget for this industry is unclear, China Aerospace Science & Industry Corp, the primary research and manufacturing entity for ballistic missiles, publishes its financial report, revealing its operations’ gross revenue. In 2017, the state-owned corporation earned approximately 2.35 billion RMB, almost doubling its revenue in 2015. The number rose to just under 4.44 billion RMB in 2020. The China Aerospace Science and Technology Corporation, a parallel aerospace state-owned enterprise that is primarily responsible for the manned space program and the CZ-series rockets, cleared 2.42 billion RMB in 2020, though the number was substantially greater in 2017 (5.80 billion RMB). Considering China’s greater purchasing power parity, the funding for missile programs is more than abundant in China, leaving plenty to line the pockets of many actors involved. Indeed, corruption in equipment development has been noticed by the party. In 2012, the Legal Daily (法制日报), the official newspaper of the Chinese Communist Party Central Political and Legal Affairs Commission (政法委), warned that some military representatives (军代表), officers who were sent to the weapons manufacturers to ensure the quality of the products, received bribes from the manufacturers. In 2018, the People’s Liberation Army Daily also reported that the system of military representatives (军代表系统) has a “weak link薄弱环节” in enforcing discipline at the lower level.
Second, the risks of being exposed by verifiable testing or examination are low for missiles reserved for nuclear missions. This is particularly true for the inter-continental ballistic missiles that are going to fill China’s 320 newly constructed silos. Strategic deterrence weapons like the liquid-fueled DF-4s and DF-5s and the solid-fueled DF-31s and DF-41s serve their deterrence mission by their perceived readiness. Given China’s longstanding commitment to no-first-use, the level of day-to-day readiness for these systems is low in China, reducing the need to test these systems for their readiness constantly. Also, unlike the U.S. Minuteman III, which is test-launched regularly to demonstrate effective deterrents, the Chinese inter-continental ballistic missiles are primarily tested to gather data for new technologies. The DF-41, for instance, has been tested about 7–10 times since 2012, all of which were to test new technologies such as multiple independent reentry vehicles and rail-mobile canister ejection. The DF-31 was test-launched only a few times, and so were the older liquid-fueled DF-5B/Cs since 2000. The most recent known DF-5C test was in 2017, before the construction of the new silos. This means that a full-scale test launch is unlikely once the missile enters the production and deployment phases. Therefore, the combination of the missile’s high prestige, large budget, and slight chance of being launched for readiness verification reaches a corruption sweet spot.
This seems a plausible explanation for the missile-related corruption reported by Bloomberg. The water-filled missiles are presumably the liquid-fueled DF-5s that are going to fill about 30 of China’s new missile silos if the Bloomberg story is indeed true. One can imagine the acquisition and operations officers involved in the scandal reassuring themselves that since test-launching a DF-5 is such an unlikely event, no one will be the wiser if the missiles are not operationally ready. Meanwhile, a steady stream of substantial funds was funneled regularly through the missile industry, providing ample opportunities and incentives to line the pockets of everyone involved. In comparison, the more “verifiable” systems within the aerospace industry, like the frequently used jet fighters and drones, rarely see publicized corruption directly compromise system readiness, though kick-backs and graft in the acquisition process likely existed. The high states of readiness for these systems increase the chance of showing a significant failure that could lead to an investigation into the procurement process, potentially capping the scale of corruption in these systems.
Corruption as a Symptom of Peace Disease
The severe corruption in the Chinese rocket industry points to another problem that may be as endemic as corruption itself: The disillusion that the People’s Liberation Army will never be tasked to fight a war soon. If members of the force, from service branch commanders to company-grade officers, firmly believed that the party’s mission to reunify with Taiwan must be carried out soon, the Chinese defense industry would have at least some resistance against the rampant and self-destructive corruption, like stealing fuel from a military fuel depot. It is not that the People’s Liberation Army was incapable of self-reflection and criticism. In fact, in 2005, the People’s Liberation Army Daily wrote a story about a missile brigade commander, Sen. Col. Jiang Xueli, and praised him for refusing to accept the silo lids when he found that a silo lid would not open due to the product being too heavy. Considering that China is currently building over 300 silos, failures of this type could not have gone unnoticed. However, if the senior leaders decided to look the other way because they believe that war is unlikely, so the lids will probably stay where they are, there would be nothing to stop corruption like this from taking place.
Indeed, the People’s Liberation Army is aware of the mental laxity and disbelief that it will be subjected to combat. The People’s Liberation Army Daily called this a mentality that “there will never be a war; even if there is one, it won’t be me to fight it仗打不起来, 打起来也轮不上我.” From his sweeping reforms to boost military modernization and his upbringing as one of the Chinese Communist Party princelings, Xi is likely aware of how pervasive the “peace disease” has been. He called out officers for having low self-discipline at the 2014 Gutian conference, voiced his discontent at the military’s various inadequacies like the “Five Don’t Know,” and instructed the People’s Liberation Army to adopt less scripted realistic training. Perhaps to his dismay, the Rocket Force corruption scandal showed that years of anticorruption campaigns failed to reach the core of the peace disease, pointing to an institutionalized corruption that even his hand-picked loyalists cannot resist or overcome.
Conclusion: Xi’s Mistrust and Danger of Institutional Corruption
Xi’s purge of the Rocket Force has effectively shown a “crisis of confidence” that can generate concerning implications for both the Chinese military and the international security landscape. Unlike previous high-profile purges that Xi launched, which often targeted political rivals and those deemed loyal to his predecessors, the 2023 round of housecleaning seems to focus on rooting out corruption within his military inner circle and his precious Rocket Force. Xi’s military reform and relentless efforts to consolidate power allowed him to hand-pick military leaders who were considered politically reliable due to prior association, proven loyalty, and family background. These trusted individuals include the disappeared defense minister Li Shangfu, who was the son of Maj. Gen. Li Shaozhu, the deputy commander of the Railway Force (铁道兵), along with other purged cadres whom Xi almost certainly personally vetted. The fact that Xi sees a fire in his backyard may prompt him to prioritize personal loyalty and obedience over all else on matters of promotion, as with the appointment of complete outsiders like Vice Adm. Wang Houbin, an aviator turned career staff officer, to lead the Rocket Force. Naturally, this will further exacerbate the information challenge faced by authoritarian leaders. Installing extraordinarily loyal generals or “yes men” without the relevant expertise repeats the same process that led the purged generals into leadership positions in the first place, only this time without the benefit of putting an established leader in charge.
Furthermore, while a leadership shakeup may halt the most egregious forms of graft, such as selling military assets, using naval ships for smuggling, and wasteful banquets, it is powerless to correct what sustained the pervasive corruption now being uncovered. Corruption as egregious as the kind plaguing the People’s Liberation Army stems from an institutional source. The domination of state-owned enterprises in defense procurement, the lack of transparency and oversight that led to the previous practice of buying promotions, and even the backward compensation system for mid to lower-ranked officers and their families could all elevate corruption to the point it becomes not merely a reflection of bad discipline or greed but a necessary form of currency or lubricant to keep the system going. Abruptly choking off the flow of dirty money without addressing the underlying issue may only further deflate morale and loyalty and sow the seeds of greater grievance. Consider the recent incident in Beijing where families of retired officers were forcibly removed from assigned apartments, presumably to make space for other officers. Perhaps the real question for Xi is to what extent the corruption has affected the military’s ongoing modernization and, more importantly, how much of the modernization progress can be sustained in the absence of the illicit practices that have been inextricably fused with the Chinese defense community.
Elliot Ji is a Ph.D. candidate in international politics at Princeton University. He was a member of the 2023 class of the Nuclear Scholar Initiative of the Center of Strategic and International Studies’ Project on Nuclear Issues. From 2022–2023, he served as the director of the Strategic Education Initiative at Princeton University’s Center for International Securities Studies.
Image: Wikimedia Commons
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