Tuesday, October 12, 2021
“Political review” planned
China is putting the banking sector on the curb
The Chinese Communist Party repeatedly starts campaigns against corruption. Now it is again the turn of banks and asset managers to be searched carefully for irregularities. Previous actions show: Even executives can be sentenced to death.
China’s Communist Party wants to tighten the country’s financial sector. This month she ushered in a new round in her campaign to expose corruption, bribery and illegal activities. The Central Disciplinary Commission of the Communist Party (CCDI) announced that it was about a comprehensive “political review”.
As part of around two-month inspections, the party’s top corruption hunters want to screen more than 20 institutions, including China’s central bank, banking and insurance regulators, stock exchanges, as well as commercial banks and asset managers.
China’s head of state Xi Jinping wants to examine the connections that state banks and other financial institutions have entered into with large private corporations. This was reported by the Wall Street Journal on Monday, citing people familiar with the plans. The CCDI’s corruption hunters are supposed to be on the lookout for violations of political discipline – which in party jargon is used to describe corruption cases. China’s chief corruption hunter Zhao Leji called for thorough investigations at 25 state financial institutions and regulators at the end of September.
Top bankers executed in January
The financial sector was last extensively scrutinized in 2015. Hundreds of bankers and managers had been reprimanded or dismissed at the time. The offenses included organizing banned internal banquets or customer-sponsored vacations. The first consequences of the new campaign have already become public: The CCDI announced on Monday that the former chairman and party leader at Chang’an Bank in the Chinese province of Shaanxi had been expelled from the party and from public office for corruption.
Four years ago, the former head of insurance supervision, Xiang Junbo, was forced to vacate his post after an investigation. In 2020 he was finally sentenced to eleven years in prison. In January of this year, former top banker Lai Xiaomin was executed in China. The former head of the finance company China Huarong Asset Management was found guilty, among other things, of accepting 1.79 billion yuan (the equivalent of around 240 million euros) in bribes.