China targets financial sector in new anti-corruption drive

China’s ruling Community Party this month turned its eyes to the country’s vast financial sector, launching a new round of a year-long campaign to expose corruption and illegal transactions.

The country’s top anti-corruption watchdog has begun a nearly two-month-long inspection of more than 20 institutions, including central banks, banking and insurance regulators, stock exchanges, commercial banks and asset management companies, in its first coordinated inspection of the sector. 2015.

The Wall Street Journal reported on Monday, citing people with knowledge of the plan, that Chinese President Xi Jinping is investigating ties that state banks and other financial institutions have developed with large private companies.

According to statements released by the Central Disciplinary Inspection Commission (CCDI) on Tuesday, there is a broad “political examination” of party committees in financial institutions and regulators.

CCDI inspectors will look for any breach of political discipline – a party euphemism for corruption.

China’s top anti-corruption official Zhao Leizhi calls for more investigations into financial institutions [FILE: Jason Lee/Reuters]

In late September the inspections were conducted by China’s top anti-corruption official, Zhao Leizhi, in party organizations of 25 state financial institutions and regulators for a thorough inspection.

Since the end of 2020, Beijing has been advocating for “prevention of disorderly expansion of capital”, thereby cracking down on technology giants and private education firms.

The campaign focuses on curbing the “barbaric development” of certain platform companies to combat monopolies and unfair competition practices.

“The latest central oversight … certainly emphasizes Xi’s call to halt the disorderly expansion of capital,” said Feng Chucheng, partner at Plenum, an independent research firm.

Fang said, “Party leaders probably realized they needed a more comprehensive, top-down approach in managing systematic financial risks after the series of events of last year, which included the Ant IPO, Didi IPO and the latest asset market share.” Huh.”

When the area was last inspected in 2015, at least a few hundred bankers and officials were condemned and fired. Offenses include holding prohibited internal banquets and accepting holidays from customers.

In 2017, Jiang Junbo, the former chairman of China’s insurance regulator, was ousted from his post following an investigation by one of the most senior financial regulators in years. Jiang was sentenced to 11 years in prison in 2020.

In January this year, Lai Xiaomin, the former head of China Huarong Asset Management Company, was executed after being found guilty of accepting a bribe of 1.79 billion yuan ($280 million).

On Monday, the CCDI said the former chairman and party chief of Chang’an Bank, located in the northwestern province of Shaanxi, had been expelled from the party and public office due to corruption.

In recent months, Chinese regulators have also targeted sectors ranging from technology to education and property, targeting some of the country’s biggest firms, such as Alibaba Group and Tencent Holdings.