Two "Financial Tigers" Caged as Xi Continues to Tighten Grip on China's "Purse Strings"

A-shares plummeting: China's middle class faces impoverishment as the CCP struggles to prevent an impending crisis. (Video screenshot)

People News - The internal strife within the CCP is driven by the pursuit of either power or money. The frequent emergence of “financial tigers” implies that the campaign to seize financial control is still ongoing.

On October 28, in a landmark court ruling, the former Secretary of the Party Committee and Chairman of China Everbright Group, Li Xiaopeng, faced charges spanning a 30-year period. He was found guilty of accepting bribes totaling 60.43 million RMB. Although this sum pales compared to the alleged 800 billion RMB embezzled by former central bank Vice Governor Fan Yifei, the outcome of Li Xiaopeng's sentencing has drawn significant attention. Observers speculate whether Li may have backing from influential figures or if, like Zhang Changgong, the former secretary of Huaxing Bank, he could provide "significant merit" by exposing other involved officials.

Li was charged by prosecutors with leveraging his roles in various banks from 1994 to his tenure at Everbright in 2017 to offer financing, loans, contracts, and employment opportunities in return for bribes. He was investigated in April 2023, though it is unclear if he was implicated by other former senior Everbright executives who had also fallen.

Far from “ever-bright,” Everbright Group has been marred by frequent corruption cases in recent years. In July 2023, former Secretary and Chairman Tang Shuangning was detained, and Li Xiaopeng succeeded him. Previously, in 2022, former Party Secretary and CEO of Everbright Holdings, Chen Shuang, was investigated, and Everbright Bank’s former Vice President Zhang Huayu was expelled from the Party. Additionally, in May, former President of Everbright Bank’s Nanning branch, Su Shude, was investigated.

News of more financial executives being imprisoned surfaces intermittently, suggesting that Xi’s CCP has yet to fully wrest control of financial assets from the Jiang Zemin and red aristocratic factions, leaving economic stability and financial security vulnerable to the risks of a “financial coup.”

Today, the news from mainland media points to more support for this concern. Former Huaxing Bank Secretary Zhang Changgong, arrested in 2021, reportedly implicated several high-profile financial figures and was found to have embezzled billions of RMB for stock speculation.

According to multiple sources and Huaxing Bank insiders, Zhang’s investigation began in 2021. The bank announced his resignation on September 12 of that year, and his profile and related activities have been removed from its website.

Today, Caixin reported that Zhang Changgong’s alleged bribes amounted to 300 million RMB, with additional embezzlement of over 600 million RMB, primarily involving funds misappropriated for asset management plans and stock speculation.

Born in 1965, Zhang held various positions, including bank manager and Party secretary. He served as president of the Industrial Bank’s Hangzhou branch in 2012, deputy president and committee member of Zhejiang Commercial Bank in 2015, and Party Secretary of Guangdong Huaxing Bank in October 2019.

Insiders suggest that due to the significant amount Zhang embezzled, he could face life imprisonment with the possibility of parole, as he reportedly provided “significant merit” by implicating other financial figures. Among them were former Zhejiang Commercial Bank Chairman Shen Renkang, former Zhejiang CPPCC Vice Chairman Zhu Congjiu (Li Keqiang’s cousin), former Xinhu Insurance Chairman Li Quan, and former Shanghai CBIRC Director Han Yi.

Since 2020, Xi’s administration has intensified financial anti-corruption efforts. In 2020, 15 officials from central-level financial units were investigated, rising to 39 in 2021, 56 in 2022, 75 in 2023, and 21 officials as of May this year.

Political analysts argue that the financial system in China has long been controlled by elite red aristocrats, and Xi’s sweeping purge in finance is politically rather than economically motivated.

Political commentator Li Linyi suggests that Xi initially sought control over financial assets held by the elites while consolidating his power. Although he reached a peak at the 20th Party Congress, Xi’s grip on power may be accelerating the regime’s path to decline. The increasing connection between financial anti-corruption campaigns, the economic downturn, and political instability indicates Xi’s urgency to consolidate social wealth as a hedge against sudden political shifts.