China’s Xi Is Cracking Down on Bankers, Financial System

Customers leave a branch of the Industrial and Commercial Bank of China (ICBC) in Beijing in this undated photo. Frederic J. Brown/AFP/Getty Images

Since the start of 2023, dozens of senior banking executives in China have resigned or been under investigation. This phenomenon marks a reshuffling of the Chinese Communist Party’s (CCP) financial sector, with various factions within the regime battling for their own interests, according to a China expert.

This month, senior bank executives were frequently reassigned. Nearly 10 banks made significant personnel changes, including the Postal Savings Bank of China announcing the resignations of two vice presidents, according to Chinese news portal Sina.

On April 13, Zheng Guoyu, vice president of the Industrial and Commercial Bank of China (ICBC), resigned from the board of directors. ICBC is the largest bank in the world by total assets.

On April 17, four executives from Bank of China, China CITIC Bank, Jiangsu Suzhou Rural Bank, and Bank of Zhengzhou announced their resignations.

Amid the resignations, regulators investigated the banking sector. According to Chinese reports, dozens of banking executives are under investigation, and the alleged crimes involve bribery and unlawful loans.

The CCP owns the major banks, and the regional banks are usually owned by local governments under the central authorities. Some of the world’s largest banks by total assets are all from China, with four Chinese banks surpassing JP Morgan Chase and Bank of America.

China’s banking sector is rife with corruption. Various factions within the CCP compete against each other for financial and political control.

According to current affairs commentator Li Yanming, the Chinese banking sector has long been controlled by the factions of the late former CCP leader Jiang Zemin and Zeng Qinghong, former vice chairman. They are allegedly linked to shady practices in China’s stock market, real estate sector, and state-owned enterprises, Li said.

Although Jiang passed away last November, his close ally Zeng, second only to Jiang in the Shanghai Gang faction, still threatens Xi’s rule, and members of this faction are not loyal to Xi.

Li noted that the recent investigations in China’s big banks are happening while A-share company executives are collectively reducing their holdings to cash, and the stock market is plummeting.

He said that behind China’s economic crisis, the different factions within the CCP are battling for dominance in the banking sector.