Heads Roll Among China’s Top Financial Executives as Xi’s Purge Continues

As part of a broad ‘anti-corruption campaign,’ more than 100 executives were investigated or punished in the past year, with some being handed death sentences.

A pedestrian walks past the People's Bank of China, in central Beijing, on Aug. 9, 2007. Teh Eng Koon/AFP via Getty Images

As Chinese leader Xi Jinping’s sweeping anti-corruption campaign continues, the new year ushered in another wave of casualties in the financial sector. In January, more than a dozen financial executives fell from grace. Political analysts say the campaign is less about corruption and more about weakening the power of rival interest groups within the Chinese Communist Party (CCP).

A Jan. 25 release by China’s Discipline and Supervisory Commissions announced the latest executives to fall under suspicion: Wang Zhibin, president of the Industrial and Commercial Bank of Hubei, and Yu Zeshui, president of Shandong Development Bank.

Both men were loyal party members. Mr. Wang served as deputy director of the CCP’s finance and economy committee for Hubei Province. Mr. Yu was the secretary of the Shandong provincial party committee and served as the president of the Shandong International Chamber of Commerce for Cultural Industries. He was last seen in public on Nov. 20 in that role.

The two bank executives joined ten other officials from major state-owned banks and finance institutions across China who were the subject of probes in January, including local branches of Construction Bank, China Banking Research Institute, China Development Bank, Pacific Life Insurance Company, and Postal Savings Bank.

In addition, it was announced last month that Wang Yongsheng, a former member of the party committee and deputy governor of China Development Bank, and Liu Lixian, the former discipline chief at the Industrial and Commercial Bank of China (ICBC), had been expelled from the CCP and handed over for prosecution.

In a related case, the former head of China’s state-owned Everbright Bank was arrested Jan. 15 on suspicion of taking bribes and embezzlement. The current head of the bank had been arrested on similar charges in October.  And Tian Huiyu, who was removed as head of China Merchants Bank in 2022, was handed a suspended death sentence on Feb. 4, for a variety of offenses including taking $29 million in bribes.

According to statistics, more than 100 senior executives in the financial arena have been investigated or punished in the past year. The list includes government regulators and executives from the banking and insurance industries, as well as the securities and trusts sectors.

Significantly, 40 individuals caught up in anti-corruption probes—57 percent of the banking officials investigated—were senior executives at China’s five major state-owned banks.

Officials in the banking sector, who used their positions to grant loans and were involved in power and money transactions, were the most affected by the recent purge, according to U.S.-based current affairs commentator Tang Jingyuan.

Although billed as an anti-corruption campaign Xi’s purge of the financial system is primarily about weakening the economic power of party factions, eliminating rivals, those who are politically unreliable and disobedient, and scapegoating for China’s economic problems, Mr. Tang told The Epoch Times.

Banking industry insiders surmise that the current wave of removals is far from the end of the purge, and see more turmoil looming in the Chinese banking and financial system.

Amid Banking Revamp, Younger Executives Take Charge

As bank executives continue to fall from grace, senior personnel changes are the order of the day, and executives are trending younger and younger.

Pedestrians stroll by a newly opened branch of the Industrial and Commercial Bank of China, in Madrid, Spain, on Jan. 25, 2011. Jasper Juinen/Getty Images

Several state-owned banks have announced the resignation or hiring of senior officials in recent months. The announcements highlight the trend of younger management at China’s banks.

On Jan. 20, 57-year-old Liao Lin, the former president of ICBC, was promoted to party secretary and chairman of the bank, which is the world’s largest, considering total assets. Mr. Liao, who holds a Ph.D. in management, is a senior economist who comes from a long career in banking.

On Jan. 13, Guan Wenjie became the party secretary and chairman at Beijing Rural Commercial Bank Co., after resigning from his positions as executive director and president of Huaxia Bank. The 53-year-old takes the helm at a bank worth billions.

Also in January, 51-year-old Xie Taifeng took over as executive vice president of China Development Bank. Meanwhile, a relative youngster, 38-year-old Yang Xuan, was named vice president of Guiyang Bank.

Doubling Down on Financial Control

In recent years, China’s sluggish property market, mounting local debt, and bad bank debts have drained the country’s economy. Mr. Tang, the current affairs commentator interviewed by The Epoch Times, feels that the financial crisis is at the root of the recent scrutiny of China’s financial sector. Fearing that financial risks threaten the regime itself, the CCP staged a cascade of purges.

Meanwhile, the CCP has doubled down on financial supervision through a variety of initiatives, including financial seminars, increased censorship, and state security intervention.

A finance-themed seminar for leading CCP cadres at the provincial level was held at the CCP’s Central Party School on the afternoon of Jan. 19. An array of party officials were present, including, in an unusual move, the minister of public security.

(L-R) Delegates Wang Yang, Wang Huning, and Cai Qi attend the opening of the first session of the 14th National People's Congress at The Great Hall of People in Beijing, on March 5, 2023. Lintao Zhang/Getty Images

Significantly, Cai Qi—China’s number 5 official and Xi’s chief of staff—made a concluding speech at the seminar. Mr. Cai is now China’s top official focused on national security. His speech conveyed a clear message to the outside world that finance is directly supervised by the CCP, Mr. Tang said, as opposed to oversight from government arms like the State Council.

Similarly, the title of China’s twice-a-decade financial policy conference was changed last October. The National Financial Work Conference became the Central Financial Work Conference, heightening its status. CCP top brass at the conference in Beijing emphasized the centralized leadership of the party over finance. Shortly after the conference, a post by China’s Ministry of State Security on its WeChat account claimed that short speculators were attempting to shake foreign investors’ confidence and cause financial turmoil in the country. The WeChat post equated short selling with a national security risk, stressing the need for national security forces to intervene in the financial sector. In a series of posts, the Ministry of State Security urged citizens not to be swayed by “false narratives.”

Beijing has also ramped up censorship of economic and financial topics. The party’s propaganda body has instructed Chinese people to “sing the bright theory of China’s economy,” and has vigorously censored online content by financial commentators and critics, even removing news articles about people experiencing financial struggles.

Mr. Tang emphasized that China’s current financial turmoil is the result of a vicious cycle, however. CCP reforms resulted in the financial sector being carved up by various powerful and influential interest factions, who colluded with the local government and entrepreneurs, he said. Therefore, he added, no amount of centralized control can solve a problem that is inherent in the communist system.

“It is the CCP system that has led to today’s systemic financial risks, so China’s financial crises cannot be avoided, no matter which CCP functional organ dominates the situation,” Mr. Tang said.