Reshuffle of Officials in Shanghai State-Owned Financial System Points to CCP’s Purge of Regional Power

Paramilitary policemen stand guard at the entrance of the World Expo near China Pavilion in Shanghai, China, on April 19, 2010. Feng Li/Getty Images

The Chinese Communist Party (CCP) has employed a revamp of Shanghai’s state-owned financial system, with a cluster of senior officials and executives being investigated or removed.

Some analysts believe that this indicates the Shanghai Gang, former CCP leader Jiang Zemin’s fraction that held the megacity as its main bastion, is being cut off from the economic veins of the rest of the party.

On Nov. 28, the Shanghai State-owned Assets Supervision and Administration Commission (SASAC) announced that He Qing was to be its new CCP secretary and director—the position has been vacant for the past two months after the previous director Bai Tinghui was arrested on Sept. 14. The Shanghai disciplinary watchdog issued a notice the same day. According to reports, Mr. Bai was under investigation.

Mr. Bai has led Shanghai SASAC for over four years since February 2019; he was also a delegate to the 20th CCP Congress last year.

Zhu Jian, former president of the Bank of Shanghai, succeeded He Qing’s previous position as chairman of Guotai Junan Securities.

Shanghai SASAC’s six affiliated financial institutions—Guotai Junan Securities, Bank of Shanghai, Shanghai Pudong Development Bank, China Pacific Insurance, Haitong Securities, and Shanghai Rural Commercial Bank—also conducted a string of personnel adjustments within a month.

Kong Qingwei, former CCP secretary of the China Pacific Insurance Company, stepped down and was replaced by Fu Fan, former general manager and deputy secretary, according to a company release on Dec. 6.

On Nov. 17, Shanghai Pudong Development Bank declared that its board of directors had elected Zhang Weizhong, former business director of China Construction Bank, as its chairman. Former chairman Zheng Yang, and vice chairman and president of the bank Pan Weidong, were both removed from their positions in September.

U.S.-based Chinese political analyst Li Yanming told The Epoch Times on Dec. 14 that the officialdom in Shanghai was almost packed with officials from Jiang Zemin’s interest group, also known as the “Shanghai Gang.” The former Communist Party leader had a long tenure in Shanghai, and even though he has been dead for more than a year, his Shanghai gang still has deep roots in the area, influencing its economic and policy decisions.

“Shanghai SASAC had long been heavily controlled by Jiang Mianheng, son of Jiang Zemin,” Mr. Li said, citing that Shanghai SASAC oversees 45 large enterprises spanning all sectors in this international economic hub. Shanghai Industrial Group, Shanghai Pharmaceutical Group, Shanghai International Port Group, and Shanghai Electric Group are all owned or directly supervised by Shanghai SASAC.

“The extensive restructuring of Shanghai’s state-owned financial system indicates that the battle for treasury finance has been fought at the top of the Communist Party, and the turf of Jiang Zemin’s faction has become a target for cleansing,” Mr. Li added.

A panel of National People's Congress (NPC) Deputies from large and medium state-owned enterprises take questions 11 March in the Great Hall of the People in Beijing from journalists on the deepening reform of China's state-owned sector: (L-R) moderator, Chairman and CEO of Yanbian Aodong Pharmaceutical Group Li Xiulin, Chairman and CEO of Anshan Iron and Steel Group Liu Jie, Chairman of Zhejiang Zhenhai Oil-Refining Chemical Ltd. Zhang Jiaren, Chairman of Shanghai Lansheng Group Zhang Lansheng and Deputy CEO of Shaanxi Qinchuan Enterprises Li Chengbo. STEPHEN SHAVER/AFP via Getty Images

Along with removing key officials from the financial system, central CCP authorities have seized part of the public property held by the Shanghai Gang, such as the Bank of Shanghai, according to Mr. Li.

In November, the Bank of Shanghai was fined 13.8 million yuan (about $1.95 million) by the regulator for 32 violations in non-performing loans, investment asset management, and registration of information on financial products. Earlier in April, the Bank of Shanghai was also fined 98.544 million yuan (about $13.9 million) for various violations.

The bank’s largest shareholder is Shanghai Union Investment Co., a wholly state-owned limited company subordinate to the Shanghai SASAC, founded in 1994. Its founder, chairman, and legal representative is also Jiang Mianheng, who used the company to extend his control over key infrastructure, high-tech, agricultural, and real estate projects, as well as other related projects in Shanghai.

Purged CCP Officials 

At least 90 senior financial officials have fallen from grace since central CCP authorities launched an anti-corruption campaign targeting the financial sector throughout China early this year.

Chiefs and executives in Shanghai under investigation this year also include: Zhou Zhengjun, president of Shanghai Industrial Group; Pan Deqing, vice president of Shanghai Pharmaceutical Group; Yan Jun, president of the Shanghai International Port Group; Xiao Xing, vice president of China Pacific Insurance Company; and Lu Yachen, vice president of the Shanghai Electric Group, who was sentenced to a 20 imprisonment.

Besides the financial sector, a number of officials in Shanghai’s other areas have been dismissed this year, including Cheng Feng, deputy general manager of Shanghai Newspaper Group, who was “double expelled” from the party and his post on Dec. 13; and Dong Yunhu, party secretary and director of the Standing Committee of the Shanghai Municipal People’s Congress, who was “double expelled” on Dec. 12.

Earlier, Shen Hongze, party secretary and chairman of Bright Real Estate Group; Chen Yang, secretary of the disciplinary committee of Shanghai Natural Gas Pipeline Company; and Qu Jianping, party secretary and chairman of Shanghai Fengxian Transportation and Energy Group, were all investigated one after another.