Chinese banks and insurance companies have recently become the focus of a full-scale fight against corruption, which ensnares high-ranking officials and can grate the already sensitive nerves of investors and entrepreneurs.
The Communist Party’s main anti-corruption agency, the Central Commission for Discipline Inspection (CCDI), has been investigating a dozen senior executives at the country’s top financial institutions this year, according to an analysis of CNN statements published on the CCDI website.
According to the CCDI, three big names at the top of China’s financial system are under investigation, including Li Xiaopeng, former chairman of China Everbright Group – one of the country’s oldest and largest public finance conglomerates.
Reportedly, Li had “serious transgression of law and discipline;” officials are investigating him, the commission said in a brief statement on Wednesday.
Everbright said in an announcement that it “fully supports” the party’s agreement and will “fully cooperate” with the inquiry into Li, who led the bank for four years until his resignation in March 2022.
On Friday, authorities launched a similar investigation into Liu Liange, former president of the State Bank, China, the country’s fourth-largest lender. Liu resigned last month, citing “work adjustment,” as requested by the bank.
Other people are involved too
And in January, domestic prosecutors accused Wang Bin, who ran China’s life insurance company from 2018 to early 2022, of taking bribes and hiding foreign savings. The CCDI first reviewed him in January 2022.
Analysts say Bao Fan might also be part of the chase. He is a famous investment banker and tech sector name who disappeared in February.
Last week, the CCDI announced that it would inspect more than 30 large public companies. These include financial giants like China Investment Corp, a sovereign wealth fund, the China Development Bank, which finances key government projects; and the Agricultural Bank of China, another major sovereign lender.
Actions against corruption
This year, the raid focused on the country’s booming financial sector. Feng said there could be two reasons for this “escalation.”
“The financial industry is the last of three key areas where Xi can gain full control after the military and domestic security apparatus,” Feng said, adding that there were “bags of money” at the party.
Xi must also centralize industry control to deal with China’s worsening economic and financial crisis; and prepare for a financial war with the United States.