PLA soldiers undertake a training exercise at Stonecutter Island in Hong Kong. Photo: AFP / Anthony Wallace

China’s military is to tighten financial oversight following a number of scandals, the Defence Ministry said on Wednesday. From January 1, all of its financial dealings will have to be audited.

As head of the 2.3 million-strong armed forces, President Xi Jinping has made his fight against military corruption a top priority. Officers have warned that the problem is so pervasive it could undermine China’s ability to wage war at a time when Beijing has increasingly projected its influence in the region and surrounding seas.

The People’s Liberation Army is already reeling from Xi’s anti-corruption campaign, which has seen dozens of officers – including Xu Caihou and Guo Boxiong, both former vice chairmen of the Central Military Commission – investigated and jailed. Xu died of cancer before he could stand trial.

The Defence Ministry said in a short statement on its website that Xi had signed off on the new auditing rules.

“All economic activities of the People’s Liberation Army and People’s Armed Police and the economic responsibilities of leadership cadres must be audited and supervised,” it said, adding that particular focus will be put on senior officers who have left office or who work in the reserve forces.

Military auditors will get more authority to collect evidence, look at bank accounts and publicize their findings, and any cases of wrongdoing will be handed over to prosecutors for further investigation. Everyone will have responsibility to cooperate, to correct mistakes and wrongdoing, and to hold to account others found breaking the rules.

China’s military set up a new auditing unit in January as part of its fight against corruption. The anti-graft drive comes as Xi steps up efforts to modernize forces that are projecting power across the disputed waters of the East and South China Seas, although China has not fought a war in decades.