(People News report) Disillusioned Chinese bankers and fund managers are abandoning their careers in finance as government actions and regulations cloud the future, making even fields like education and stand-up comedy appear more attractive.

According to a report by Voice of America, increasing scrutiny of transactions, financing, and deals, combined with a sluggish economy leading to a sharp decline in stock trading volumes, drying up of private equity and venture capital, and fewer opportunities for IPOs, have resulted in slashed salaries and job cuts.

After three years of uncertainty in the capital markets, Xu Yuhe (name transliterated), a partner at Deepwater Fund Management, shifted to a more predictable business: helping students study abroad.

Xu said, "Promises of economic stimulus may have recently boosted the stock market, but investors are fickle, so this bullish sentiment may be short-lived." He emphasized, "Educational services are a more stable business." He is capitalizing on the growing trend of people seeking to study or immigrate to Hong Kong or Singapore, which are wealthy, culturally similar, and close to China.

The $67 trillion financial industry has been hit hard, particularly by the "common prosperity" campaign launched in 2021, which aimed to reduce income inequality by implementing measures such as capping salaries and reclaiming bonuses. Currently, the hedge fund industry is under attack for quantitative trading, which regulators believe may be unfair to retail investors.

Official data shows that actions to identify vulnerable hedge fund operators led to the closure of thousands of funds last year.

Many hedge funds even failed to benefit from the record stock market rebound, as data-driven strategies could not predict unexpected policy changes, leading to losses in short positions.

Jason Tan, a director at Shanghai-based recruitment firm Refinitiv, said, "Market-supporting stimulus measures are very short-term and aimed at winning over retail investors."

"I’ve spoken with enough bankers to know that 'common prosperity' is the new norm, and the era of high-paying banking jobs is over. Banking talent is already seeking overseas positions or turning to less regulated industries."

Salary Caps

Fund consultancy Z-Ben Advisors noted that the $4.4 trillion public fund industry is also seeing a "significant movement" of fund executives and portfolio managers as companies focus on salary reviews and cost control.

Reuters reported last month that China Merchants Fund Management, one of China's top 10 asset management companies, had asked executives to return compensation exceeding new "common prosperity" salary caps from the past five years.

A Z-Ben report from early September stated, "The widespread implementation of salary caps will determine whether there will be more movement within the industry or if key employees will leave fund management altogether."

A former investment banker who resigned last year and moved abroad said that increasing risks of bankers being arrested and detained, combined with falling compensation, have made the business increasingly risky.

This former banker said that many employees at state-owned banks are restricted from traveling abroad, as authorities may one day investigate certain business activities.

Surplus of Bankers

Regulators have tightened the review process for companies applying to go public, partly to ensure that capital flows to strategic sectors favored by the government, such as semiconductors, which has reduced opportunities for traders.

This has nearly halted domestic IPOs—fundraising from IPOs in the first half of this year plummeted by 75% compared to the same period last year, according to KPMG. Additionally, growing geopolitical tensions, particularly between China and the U.S., have made overseas listings less appealing for companies.

Reflecting the surplus of bankers, nearly half of the 8,000 registered IPO sponsors have not completed a single transaction this year, according to records from the Securities Industry Association.

Given these prospects, former senior banker at Zheshang Securities, Gu Zaifeng (name transliterated), voluntarily became a village party secretary in rural Shandong Province earlier this year.

The Nanjing University Alumni Association stated that Gu voluntarily gave up his high-paying job in Shanghai to return to the countryside and re-establish his grassroots roots. Gu has yet to comment on this decision, and the media has not been able to interview him.

Across the broader securities industry, nearly 15,000 employees have left their jobs since the end of 2022, and this trend is expected to continue as regulators push for consolidation in this fragmented industry.

Experts point out that more investment banking jobs will be cut as major brokerage firms are likely to consolidate following last week’s largest-ever merger in the industry.

Venture capitalist Wu Shichun remarked during a stand-up comedy show broadcast via his WeChat account in June: "Nowadays, in every corner of this industry, you’ll encounter investors on the verge of bankruptcy and entrepreneurs struggling for survival."

Wu, the founding partner of Plum Ventures, is now better known as a stand-up comedian: "I’m thankful for this difficult era because it gives me material for my performances."