Chinese government eyes the country’s vast financial sector as it kicks off a fresh round of its yearlong anti-corruption campaign.
Beijing’s top anti-corruption watchdog has commenced a nearly two-month inspection of over 20 institutions comprising the central bank, stock exchanges, the banking and insurance regulator, commercial banks, and asset management companies, in its first synchronized inspection of the sector since 2015.
According to the Wall Street Journal on Monday, Chinese President Xi Jinping is examining the connections that financial institutions including the state bank have developed with big private companies.
As per statements released by the Central Commission for Discipline Inspection (CCDI) on Tuesday, the checks entail a wide-ranging “political examination” of Party committees at the financial institutions and regulators.
CCDI inspectors will be on a hunt for any violation of political discipline.
Earlier in September, Beijing’s top anti-corruption official, Zhao Leji called for a comprehensive inspection at the Party organizations of 25 state financial institutions as well as regulators.
Since late 2020, the country has been advocating “the prevention of disorderly expansion of capital”, commencing a clampdown on technology giants and private education institutions.
The campaign has targeted preventing “savage growth” of some platform companies in an effort to deal with their unfair and monopolistic behaviors.
Partner of Plenum, an independent research firm Feng Chucheng said, “The latest central inspection … is certainly going to emphasize Xi’s call of preventing the disorderly expansion of capital”.
Feng added, “The Party leaders likely realized that they need a more comprehensive, top-down approach in managing systematic financial risks following the series of events since last year, including Ant IPO, Didi IPO, and the latest of the property market”.
When the sector was previously inspected in 2015, around a few hundred bankers and executives were censured and some even fired. Offenses entailed organizing prohibited internal banquets and accepting holidays from their clients.
In 2017, the former chair of China’s insurance regulator, Xiang Junbo, was terminated from his position following a probe of one of the most senior financial regulators in years. Xiang was 2020, sentenced to 11 years in jail.
Earlier in January, the country executed Lai Xiaomin, the former head of the embattled China Huarong Asset Management Co, as he was found guilty of taking bribes worth 1.79 billion yuan ($280m).
On Monday, the CCDI said that the former chairman and Party head at Chang’an Bank, was expelled from the Party and public office owing to charges of corruption.
In the last few months, Chinese regulators have also targeted sectors ranging from technology to property and education aiming at some of the biggest firms in the country, including the Alibaba Group and Tencent Holdings.
