Qincheng Prison (video screenshot)
[People News] On the evening of July 24, 2026, the website of the Central Commission for Discipline Inspection and the National Supervisory Commission of the Communist Party of China reported that Fang Xinghai, the former member of the Party Committee and Vice Chairman of the China Securities Regulatory Commission, is under investigation for serious violations of discipline and law.
Two years after his retirement, this Stanford-educated economist, former World Bank official, and technocrat who once boldly claimed at Davos that "China is more democratic than the West" ultimately could not evade the Communist Party's iron grip.
Following the announcement, the comment section of A-share investors was filled with approval, but what truly warrants contemplation is not the Communist Party's slogan that "anti-corruption is always ongoing," but rather the harsh logic of power struggles within the Party's political machinery. Flattery and submission do not serve as a shield against accountability; technical expertise, professional distinction, international experience, and even the act of personally pledging loyalty to the supreme leader hold no value when faced with the whims of power.
Fang Xinghai's career path exemplifies the archetype of a 'returnee technocrat.' Born in 1964 in Leqing, Zhejiang, he completed his undergraduate studies at Tsinghua University before pursuing a PhD at Stanford University under the guidance of Nobel Prize-winning economist Joseph Stiglitz, earning his doctorate in 1993. He then joined the World Bank's headquarters in Washington, D.C. In 1998, at the age of 30, he was invited back to China by Zhou Xiaochuan, who was then the president of the China Construction Bank. Since returning, Fang has held several significant positions, including Deputy General Manager of Galaxy Securities, Deputy General Manager of the Shanghai Stock Exchange, and Director of the Shanghai Municipal Financial Office. In 2013, he became part of the Office of the Central Financial and Economic Leading Group, and in 2015, he was promoted to Vice Chairman of the China Securities Regulatory Commission, where he managed critical areas such as international relations, accounting, and issuance. He served in this capacity for nearly nine years until reaching retirement age in July 2024, and in 2025, he is set to become the Vice President of the China Financial Society. At first glance, his career trajectory appears to be a seamless ascent, characterized by a strong professional background, an international outlook, and extensive domestic experience, ultimately positioning him at the heart of financial regulation.
A polished resume may bring temporary fortune, but once ensnared in the CCP's crushing machinery, any political prestige will not guarantee lifelong benefits, nor will it provide immunity from repercussions. Fang Xinghai had early connections with Xi Jinping; when Xi Jinping took office as the Secretary of the Shanghai Municipal Committee in 2007, Fang was already part of the Shanghai financial system. More importantly, five years later, during the National People's Congress, he presented a letter to Xi Jinping stating, 'I wish to contribute to the development of the national financial sector!' Xi Jinping passed the letter to the department overseeing financial and economic matters, and Liu He, who was then the director of the Central Financial and Economic Leading Group Office, later invited him to help draft the financial reform proposal. This letter, which served as a self-recommendation, flattered those in power and demonstrated his willingness to align himself with the party, propelled Fang Xinghai to a position of significant influence within the CCP's financial realm, but it also set the stage for the dangers he faces today.
The previous leadership of the Securities Regulatory Commission underwent a near-total purge: Yi Huiman, Wang Jianjun, Wang Huimin, and Fang Xinghai were all removed. Following Yi Huiman's arrest, it is quite remarkable that Fang Xinghai has managed to remain in his position. Both hail from Wenzhou, with Yi Huiman serving as the chairman of the Securities Regulatory Commission from 2019 to 2024, and Fang Xinghai acting as his key deputy. During Yi Huiman's five-year term, over 1,900 new stocks were listed on the A-share market, and rumors circulated that the 'tea fee' for IPOs could reach hundreds of millions. The approval rate for small and medium-sized enterprises in the Zhejiang region remained notably high. As a crucial figure overseeing issuance, Fang Xinghai played a significant role in developing review standards and managing the issuance review committee. Additionally, there are rumors in the financial sector that Zhao Xuejun, chairman of Harvest Fund, has implicated Fang Xinghai; Fang has established close relationships with several quantitative institutions, and Li Cheng, the former market director of Liang Wenfeng's Huanfang Quantitative, has already been arrested. The funds utilized by Liang Wenfeng and others to 'harvest leeks' through quantitative strategies have become a sensitive aspect of the ongoing investigation. Liang Wenfeng is a notable figure in China's AI industry, appearing young and promising with vast potential, yet the political landscape of the Communist Party is highly unpredictable, leaving the inexperienced Liang Wenfeng facing numerous challenges ahead.
According to a report by Caixin, Fang Xinghai, who oversaw the issuance process, found the review standards to be inflexible and took it upon himself to participate in the review. He candidly remarked during an internal discussion, 'As a Stanford PhD, I have never encountered these standards before.' This comment effectively highlighted the underlying issue of the issuance review's 'professional barriers equating to rent-seeking moats,' further deepening his disagreements with Guo Xudong, the then deputy director of the issuance regulatory department. Guo, who had a strong personality and came from an accounting background, maintained a firm professional stance and did not respond to WeChat messages related to the issuance review, including those from Fang. In October 2025, Guo voluntarily reported herself amid controversies surrounding her retirement and future plans, with the official statement using harsh language: neglecting responsibilities, differential treatment, accepting equity, making calls, deceiving the organization upon resignation, and illegally accepting a notably large sum of property. During her time on the 17th issuance review committee, she reviewed 149 companies seeking to go public, with 105 receiving approval. The simultaneous downfall of the vice chairman in charge and the frontline review leaders suggests that this initiative is not merely about targeting individuals, but rather about examining the discretionary power within the issuance review process. The combination of concentrated power, professional barriers, and long tenures is currently being dismantled.
Caixin has also revealed that Fang Xinghai is more committed to Ant Group's IPO than the investment banks, actively leading his team around in a bid to create the world's largest IPO project. In 2020, when Ant was planning its public listing, he was responsible for the issuance department, and the criteria for reviewing the world's largest IPO became a breeding ground for corruption. The notion that he and Yi Huiman represent 'one from the sea and one from the land,' suggesting a tense relationship, is widely discussed: after an industry meeting, while dining in the cafeteria, Fang Xinghai attempted to engage Yi Huiman by mentioning his upcoming business trip, but Yi Huiman completely disregarded him, continuing to laugh and chat with others, which left Fang Xinghai to leave in disappointment with his tray. Such awkward moments of internal power struggles are commonplace in Chinese Communist politics; while they may appear to be disagreements over work, they fundamentally reflect the competition for factions, interests, and survival space.
The irony lies in Fang Xinghai's performance of 'kneeling and licking' before the authorities. At Davos, he openly stated that 'Western democracy has significant problems and needs political reform' and that 'China has more democracy than the West,' which elicited laughter from the audience, with a professor from Columbia University laughing uncontrollably beside him. Fang insisted, 'I am serious,' to which the professor replied, 'Yes, you are indeed serious.' While it is understandable to act for financial gain, such overt disparagement of the West and elevation of the Chinese Communist Party has turned into a joke among overseas elites, yet it is perceived as a sign of loyalty within domestic politics. The issue is that no matter how loud the signal is, it cannot fend off the predatory forces vying for power. There are rumors that after his retirement, he fancifully wished to return to the United States to continue his career at the World Bank, but this was blocked by the Communist Party's Organization Department. Wang Huimin was investigated six years after his retirement, and Fang Xinghai fell from grace two years later. Regardless of one's technical expertise and contributions, as long as you remain within the 'motherland,' a fall into the abyss is inevitable.
The Chinese Communist Party's anti-corruption campaign has never aimed at creating a transparent government, protecting the public, or regulating the exercise of power. Rather, it functions as a mechanism for the highest authority to eliminate dissenters, consolidate financial control, and intimidate potential political adversaries. During Xi Jinping's tenure, political purges have unfolded in successive waves, impacting the military, the judiciary, and the financial sector. The financial system, which wields control over resource allocation and capital market discourse, has naturally become a focal point for power struggles. When overseas technical experts were recruited, it was due to the necessity of their specialized skills to fill existing gaps; however, once they completed their designated tasks or became entangled in factional interests, they were either discarded or turned into pawns in higher-level purges. Fang Xinghai, who moved from a senior executive position at the World Bank to a domestic vice-ministerial role, enjoyed a successful career but ultimately lost his freedom in his later years. Had he remained in the United States, he might have avoided such a fate. The invitations from Zhou Xiaochuan, the recognition from Liu He, and the loyalty letter to Xi Jinping ultimately became tickets to Qincheng Prison.
For those overseas technical elites who still cling to illusions about the CCP, Fang Xinghai's outcome serves as a stark warning and a bitter lesson. Whether they are seasoned returnees or newcomers, in today's environment where Xi Jinping fervently calls for the capture of spies, they are constantly under scrutiny by the system. When the system requires your services, it can elevate you to positions of power and wealth, allowing you to shine on the international stage while proclaiming 'China is more democratic.' However, when you are no longer needed, or when you become a casualty of factional infighting, your professional background, displays of loyalty, and even political credentials become completely irrelevant. In the eyes of the CCP, you are merely a tool begging on your knees.
Fang Xinghai's arrest appears to be due to 'serious violations of discipline and law,' but it fundamentally highlights the brutal nature of power struggles within the Chinese Communist Party (CCP). Flattery towards the CCP has never guaranteed immunity from consequences. In this system, there is only absolute obedience and no absolute safety; only the relentless cycle of power struggles exists, with no lasting political achievements. Those who once thought that responding to the Party's call, returning to contribute, actively demonstrating loyalty, and aligning themselves correctly would secure their positions often end up realizing they have boarded the wrong ship. The CCP's political meat grinder does not differentiate between overseas returnees and local insiders; it only cares about whether you have been completely exploited and whether you have become an ignorant obstacle.
Fang Xinghai's narrative is not a triumphant tale of anti-corruption, but rather another illustration of the CCP's internal power struggles and infighting.
(First published by People News) △
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