Shi Xiongliang's trial began in the Yingjiang District Court in Anqing, Anhui province on May 8. He has been charged with accepting over 1.9 million yuan (US$306,000) in bribes from suppliers and retailers as vice general manager of Maanshan Iron and Steel (Masteel).

Shi, who retired in July 2013, was listed as a suspect on May 9, 2014 and indicted on bribery charges by Anqing prosecutors, who were investigating allegations of corruption in the state-run steel company, reports Shanghai's China Business News.

Shi's case is not unusual in China's steel production industry. "It's common practice for the staff in the quality and procurement departments (of steel companies) to take kickbacks... when they're ordering raw materials," according to a source in the steel industry.

In 2010, four executives of the state-run Anyang Iron and Steel Group in Henan province were convicted on charges of accepting bribes. Two years later, over 10,000 tons of mineral powder purchased by the steel manufacturer was found to be substandard.

In a district court trial, it was revealed that suppliers had bribed several quality control executives in the company, who were in charge of raw material procurement and personnel, which allowed the suppliers to sell low-end iron ore concentrates to the enterprise under the guise of a high quality product.

"Do not think that trade dealings between steel producers and suppliers are a normal relationship under which cheap and high-quality supplies can be easily sold to the factories," the source said. "The dynamics between the factories' procurement departments and other enterprises are complex. It's not just a matter of selling whenever you want.

The links to the right people at state-run enterprises determine whether suppliers receive payment for products sold to those companies, the source said. "In most big steel companies, procurement managers would feel inferior if they were not taking kickbacks," the source said.

For the Chinese public, the good news is that the government's anti-corruption campaign has reached the steel industry, said the report.

In the first five months of the year, executives of several companies, including Shanghai Baosteel Group, Wuhan Iron and Steel, Jiuquan Iron and Steel, and Shandong Iron and Steel, were being investigated on suspicion of corruption, the report said.

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