By Ben Blanchard and Megha Rajagopalan
BEIJING (Reuters) - As tensions spike between China and other countries in Asia's disputed waters, serving and retired Chinese military officers as well as state media are questioning whether China's armed forces are too corrupt to fight and win a war.
A slew of articles in official media in recent months have drawn parallels with the rampant graft in the People's Liberation Army and how a corrupt military contributed to China's defeat in the Sino-Japan War 120 years ago.
The concerns are striking given the rapid modernization of the PLA, from the development of stealth fighter jets to the launch in 2012 of China's sole aircraft carrier. Backed by a budget that is second only to the United States, China's military is projecting power deep into the South and East China Seas, unsettling the region as well as Washington.
But two scandals have shone the spotlight on deeply rooted graft in the PLA - a key target of President Xi Jinping's sweeping anti-corruption drive.
China said in June it would court-martial General Xu Caihou, who retired in 2013 as vice chairman of the Central Military Commission, the top military decision-making body, for taking bribes.
Earlier this year authorities charged one of his proteges, Lieutenant-General Gu Junshan, with corruption. Gu was the deputy head of the PLA Logistics Department until he was sacked in 2012. Sources have told Reuters that Gu stands accused of selling hundreds of military positions, raking in millions of dollars from a position that gave him sway over appointments and development contracts for military-owned land.
What worries some generals and other Chinese experts is that the buying and selling of senior jobs - long an open secret in China - has led to those with talent being cast aside.
"However much you spend on the military, it will never be enough if these corrupt officials keep appearing," retired Major-General Luo Yuan, one of China's most widely read military figures, told Shanghai-based online news portal The Paper last week.
"The money sucked up by corrupt officials like Xu Caihou and Gu Junshan is hundreds of millions or billions of yuan. How many fighter jets could you build with that? If corruption is not excised we will be defeated before we even go into battle."
Reuters has not been able to reach either Xu or Gu for comment. It is not clear whether they have lawyers.
The Defense Ministry did not respond to a request for comment on the corruption in the PLA.
BLOODY NOSE FROM VIETNAM
Xi has demanded that the 2.3 million strong armed forces, the world's largest, become more combat ready, although the government stresses it wants peaceful ties with its neighbors.
Chinese forces were last seriously tested in 1979, when the army invaded Vietnam as punishment for Hanoi's ousting of Cambodia's China-backed leader Pol Pot. The PLA, however, was beaten back by Vietnam's battle-hardened troops.
China stepped up a crackdown on corruption in the military in the late 1990s, banning the PLA from engaging in business. But the military has gotten involved in commercial dealings in recent years due to a lack of checks and balances, sources say.
For officers who pay bribes to be promoted, corruption is a way to make a return on their investment, military experts say. Examples of graft include leasing military land to private business, selling military license plates, illegally occupying PLA apartments or taking kickbacks when buying food or equipment.
Underscoring his resolve to tackle such graft, Xi is set to promote General Liu Yuan, a whistleblower whose accusations in 2012 paved the way for the corruption charges against Xu and Gu, to the Central Military Commission, sources told Reuters this month. Liu is currently political commissar of the PLA's Logistics Department.
"Corruption in the military absolutely must be eliminated, this is imperative for the development of our armed forces," a retired senior officer told Reuters, speaking on condition of anonymity due to the sensitivity of the matter.
WARNINGS FROM THE PAST
The growing concern within China over military corruption has coincided with the 120th anniversary of the start of the Sino-Japan War, which ended with the signing over of Taiwan to Japanese control a year later, a national humiliation that resonates in China to this day.
Ties with Tokyo, long strained over Japan's occupation of parts of China before and during World War Two, have worsened because of an increasingly ugly spat over the ownership of uninhabited islets in the East China Sea.
Coastguard ships and fighter aircraft from both sides routinely face off around the islands, fuelling fears an accident could spark a clash.
Chinese newspapers have focused on how military corruption was a key reason for China's defeat to Japan in the waning years of the Qing dynasty, a theme taken up last week in the weekly paper the Study Times, published by the Central Party School, which trains rising officials.
"In the late Qing dynasty .... the military (was) unbearably degenerate with lax discipline, superficial training, gambling, frequenting brothels, smoking opium and other wantonness running rampant," it wrote.
It is an issue being discussed at length by China's military establishment.
"Military corruption is at a dangerously unprecedented level," Major-General Kun Lunyan, an influential military commentator, wrote in May in the Global Times tabloid.
"Do we want this historic tragedy to be repeated by our people's army?" Kun wrote, noting that soldiers today "abhor" the practice of only being able to get promoted if they "rely on cash to buy their way up".
China's Communists don't have to go back 120 years to understand the importance of having a clean military.
The party is aware that one reason the Nationalists lost the Chinese civil war and were forced to flee to Taiwan in 1949 is because of rampant corruption.
Writing about that period last month, the official Xinhua news agency reminded its readers that "corrupt elements" were executed by firing squad as Mao Zedong plotted his revolution in the caves in northeastern China in the 1930s and 1940s.
"History proves time and time again that the biggest threat to the military is not the test of gunfire and smell of gunpowder, but the encroachment of corruption into the ranks," it said.
(Additional reporting by Beijing newsroom; Editing by Dean Yates)