China Launches New Anti-Graft Inspections Targeting Financial Sector

China launches anti-corruption inspections targeting major financial regulators and state-owned banks, highlighting Xi's efforts to stabilize the economy and curb systemic risks.

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Nimrah Khatoon
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China Launches New Anti-Graft Inspections Targeting Financial Sector

China Launches New Anti-Graft Inspections Targeting Financial Sector

China has launched a new round of anti-corruption inspections targeting some of its largest state-owned banks, the central bank, and key financial regulators. The inspections, which will last for three months, are being carried out by the nation's anti-corruption authorities and involve 17 out of the total 34 entities.

The inspections will target the Ministry of Finance, the National Financial Regulatory Administration, and the China Securities Regulatory Commission, as well as China's biggest state-owned lenders, including Industrial & Commercial Bank of China Ltd., and the main bourses in Shanghai and Shenzhen. The central bank and the securities regulator have announced the start of the inspections, with the CSRC chairman and the PBOC governor vowing to rectify any issues found.

This is the first broad probe since a round of inspections in 2021 that sent shockwaves through the industry. Similar inspections in 2021 led to sweeping arrests and penalties across the industry, with at least 130 financial officials and executives investigated or punished in 2023 alone.

Why this matters: The anti-graft inspections in China's financial sector highlight the Communist Party's strong focus on rooting out corruption among government officials and corporate executives as part of President Xi Jinping's broader efforts to stabilize the economy and prevent systemic financial risks. The outcome of these inspections could have significant implications for the stability and development of China's financial industry.

The Communist Party has placed a strong focus on rooting out corruption among government officials and corporate executives as part of President Xi Jinping's broader efforts to stabilize the economy and prevent systemic financial risks. Chinese Vice Premier Zhang Guoqing emphasized the importance of promoting the high-quality development of key industrial chains to strengthen the resilience and safety of the nation's industrial and supply chains, as well as enhance the core competitiveness of the manufacturing industry.

The anti-graft inspections come as several high-ranking officials in China have recently fallen under corruption probes. An ex-vice chairman of the Inner Mongolia autonomous region's top legislature, Du Zi, is being investigated for suspected violations of party discipline and law, which is a common euphemism for corruption. A former vice chairman of the government of the Guangxi Zhuang autonomous region in South China, Qin Rupei, has also fallen under a graft probe.

Key Takeaways

  • China launches new anti-corruption inspections targeting major state-owned banks and financial regulators.
  • Inspections will last 3 months, involving 17 out of 34 entities including the Ministry of Finance and CSRC.
  • Similar inspections in 2021 led to arrests and penalties of over 130 financial officials and executives.
  • Inspections aim to root out corruption and prevent financial risks as part of Xi's economic stabilization efforts.
  • Recent corruption probes have targeted high-ranking officials in Inner Mongolia and Guangxi Zhuang regions.