Report: Senior CSSC Finance Executive Under Investigation for Corruption
Another one of the senior executives working within China’s giant shipbuilding company China State Shipbuilding Corporation (CSSC) is reported to be under investigation for financial improprieties and other possible violations. Caixin Global, a Chinese media outlet known for its investigative journalism, is releasing a report dated June 5 saying that senior financial executive Li Chaokun is under investigation. It comes as Chinese shipbuilding is already under pressure as the U.S. is launching a trade investigation into the industry’s business practices.
The former chairman of one of the finance arms of the CSSC is reported by Caixin to be under investigation “on suspicion of serious violations of discipline and law.” Caixin explains that it is a common euphemism used by the Communist Party for corruption.
He headed in 2019 and 2020 Zhong Chuan Finance Co., a finance institution and subsidiary of CSSC. The company is responsible for helping to raise finances as well as loans and other financial transactions for the various shipyards within CSSC. It also handles foreign exchange transactions.
Li is reported to have last appeared in public in late April. The CSSC website shows him representing the company at a meeting with the Global Maritime Forum and Hong Kong Shipowners Association and others in his role as Secretary of the Party Committee of CSSC Shipping. He also presided over the naming ceremony of the newly built Hafnia Lillesand, a new LRII, LNG-fueled tanker.
Caixin reports that there is an ongoing crackdown and one element is especially focused on the ship finance leasing sector. The report says that several senior executives at CSSC have been investigated for allegations related to financial matters.
Last year, a Shanghai court sentenced the former chairman of China Shipbuilding Industry Company (CSIC), Hu Wenming, to 13 years in jail after a three-and-a-half-year investigation on charges of accepting bribes and abuse of power. He held various senior roles and was credited for helping to engineer the merger of CSSC and CSIC in 2019.
All of this comes as the United States has begun looking at the business of the Chinese shipbuilders. U.S. Trade Representative Ambassador Katherine Tai confirmed in April 2024 that her office would be launching an investigation into China’s shipbuilding industry. While Chinese officials quickly responded calling it an investigation lacking facts, the trade office was following a petition filed by several of the largest unions in the United States. It claims the use of unfair, non-market policies and practices, including in finances, to advance China's role in shipbuilding and reduce competition.
China has been moving aggressively to expand its leadership in global shipbuilding. This year they have grown their leadership over the South Korean shipyards with some months booking 70 percent of the global orders. The are reports that the Koreans have decided to focus on the high-value work as it was becoming too difficult to compete for basic tanker and bulker contracts. South Korea is attempting to build a lead in LNG carriers and emerging segments such as ammonia-fueled and autonomous shipping.