Beijing Investigates Top China Investment Company Executive

Xu Zuo is under investigation for alleged ’serious violations of discipline and law.’
Beijing Investigates Top China Investment Company Executive
Two men chat next to the offices of CITIC Pacific in Hong Kong, on April 8, 2009. (Philippe Lopez/AFP via Getty Images)
Mary Hong

Beijing is investigating a top executive of the state-owned investment company China International Trust Investment Corporation (CITIC) Group, which was originally founded with the support of former Chinese Communist Party (CCP) leader Deng Xiaoping.

Xu Zuo, a deputy general manager at CITIC, is under investigation for alleged “serious violations of discipline and law,” according to the Central Commission for Discipline Inspection (CCDI) website on June 9.

Mr. Xu, aged 59, is a senior economist with over 20 years of experience in expanding international markets and overseas acquisition and restructuring.

As of April 17, the CCDI dispatched over a dozen inspection teams to 34 economic departments and financial units, including its central bank and financial regulators, for a three-month-long investigation, the CCDI’s website reports.
The stationing in April of the regime’s corruption watchdog in several financial syndicates run by the party’s princelings signified a shift in the dynamics of the CCP’s internal struggle, according to Pinnacle View, a Chinese-language NTD program providing analysis and commentary on China. In particular, the inspection seemed to target princeling-centered enterprises in Beijing, such as CITIC and China Poly Group Corporation (Poly Group).

Princelings are descendants of prominent CCP leaders and officials who exert substantial political and economic power through their influential family ties. They are also known as the second Red Generation.

China affairs expert Shi Shan believed it signals that the party’s leadership is attempting to “root out the princelings’ influence.”

The CITIC Group was established in 1979 by Rong Yiren, the vice president of Communist China from 1993 to 1998, with the support of the late Mr. Deng. The company underwent a structural reform and became a state-authorized investment institution in 2002, and restructured into a wholly state-owned company in 2011.
In mid-April, CITIC posted on its website that an inspection team led by Shi Kehui, a former associate of Chinese leader Xi Jinping and former Vice President Wang Qishan, was stationed at CITIC for a three-month investigation into “violations of political and organizational discipline.” The investigation is due to end on July 12.
Meanwhile, overseas media revealed on April 18 that Deng Xiaoping’s grandson, Deng Zhuodi, was the supervisor of CITIC Finance.

Political commentator Li Yanming told the Chinese language edition of The Epoch Times that the current inspection team, led by close associates of Xi Jinping and Wang Qishan, indicates the high level of importance the Chinese leader places on the matter.

Mr. Li indicated that Wang Jun, known as the “wealthiest princeling,” had long held a position as chairman at CITIC Group.

Mr. Wang was the son of Wang Zhen, the vice president of the Chinese communist regime between 1988 and 1993.

“Along with the recent exposure of Deng Zhuodi’s role in CITIC Group, it indicates that the internal power struggle within the CCP has shifted towards veteran families like Deng Xiaoping and Wang Zhen,” Mr. Li said.