China plans more banking Crackdown

Chinese authorities have warned top executives of six state-owned banks that the crackdown on the country’s $60 trillion financial industry is not yet over, even as they announced the probe of the most senior state banker in nearly two decades. Bank of China’s former Chairman Liu Liange is suspected of “serious violations of discipline and law.” Officials from the China Banking and Insurance Regulatory Commission and the Central Commission for Discipline Inspection called in executives to address the probe. They said they would deepen the crackdown on corruption in the financial industry, and that bankers should draw lessons from Liu.

This warning adds to evidence that President Xi Jinping’s anti-graft campaign is still ongoing. At least 20 financial executives have been probed or penalised since February, and star banker Bao Fan, chairman of China Renaissance Holdings Ltd., disappeared almost two months ago. The CCDI said last week it would begin fresh checks at over 30 state-owned companies, including a “look back” at five financial companies previously targeted. Meanwhile, Chinese officials are wooing private and foreign businesses to restore confidence in the country’s economy.

The financial industry has been rocked by a clampdown that began in late 2021 and shows no signs of abating. The dragnet has become the most extensive ever and dovetails with a broader government shakeup as Xi embarked on a third term in office. The CBIRC and the CCDI have not yet commented on the latest warning. In addition to the investigation of Liu, Huang Xianhui, former general manager and party chief at China Huarong Asset Management’s Beijing branch, is also being probed on suspicion of serious violation of law.

Xi has tightened his grip over the industry, announcing a broad overhaul of the financial regulatory regime as he began his third term. A long-disbanded Central Financial Work Commission will be revived to guide party building in the sector, including personnel arrangement and anti-corruption. While it is not unusual for authorities to call bankers in at short notice after a high-profile probe, the latest warning suggests that China’s anti-corruption campaign is still gaining momentum.