STRENGTHENED SCRUTINY

China’s top disciplinary watchdog launched an anti-graft campaign against regulators and company managers in the financial sector

By He Bin

Xiang Junbo

Photo by cfp

Financial Corruption

On May 5, 2017, the State Council, China’s cabinet, announced the removal of Xiang Junbo from the post of the chairman of China Insurance Regulatory Commission. Xiang is being investigated for alleged “serious violations of the Party’s code of conduct,” a euphemism for corruption, according to an early announcement made by the top anti-graft authority on April 9.

At the same time when the announcement was made on April 9, China’s official government website released the full text of Premier Li Keqiang’s speech delivered during the clean governance conference held on March 21 in which he vowed to strictly crack down on financial corruption. The pledge came as the world’s second largest economy continues to deepen reforms in pursuit of steady economic growth.

Li pointed out that it is crucial to prevent financial risks and corruption and crack down on violations by banks, such as fraudulent loans, insider trading in the securities market and insurance fraud. He added that the authorities will relentlessly punish internal supervisors and company managers who collude with big players in the market to steal and sell secret information.

“Financial supervisors who violate the law must be punished to serve as a warning to others and maintain the proper order in the financial sector,” Li said in his speech. Financial insiders and anti-graft experts noted that this was a strong signal that the country has started a new round of anti-graft campaigns in the notoriously corrupt financial sector.