The power struggle for the next generation of top leaders in the Chinese Communist Party has begun. Former Vice Chairman of the China Securities Regulatory Commission (CSRC), Fang Xinghai, was recently taken down, with Chinese media revealing his involvement in the Ant Group’s listing case. The Zhejiang Financial Group where Fang Xinghai belongs to is currently being targeted for a cleanup by the leader of the Fujian Gang, He Lifeng. Analysts believe that Fang Xinghai and the current Premier Li Keqiang are old acquaintances from Wenzhou. The explosion of the Zhejiang financial scandal and the resurfacing of the Ant Group listing case may impact Premier Li Keqiang’s position at the 21st National Congress of the CCP.
On July 24th of this year, former CSRC Vice Chairman Fang Xinghai was taken down.
Public records show that Fang Xinghai is a Ph.D. graduate from Stanford University and had worked at the World Bank. In August 1998, he was invited back to China by then President of the China Construction Bank, Zhou Xiaochuan. He later served as the head of the China Construction Bank Group Coordination Committee Office, Secretary-General of the Galaxy Securities Regulatory Commission, Deputy General Manager of the Shanghai Stock Exchange, and Director of the Shanghai Financial Services Office. In 2013, Fang Xinghai self-recommended himself to Xi Jinping and was appointed as the Director of the International Economic Bureau of the Central Financial and Economic Affairs Commission, and later as Vice Chairman of the CSRC.
Independent commentator Du Zheng wrote in Taiwan’s “Up Media” on August 22nd that in today’s Chinese officialdom, Xi Jinping’s rise to power has brought his old cronies, known as the “Xi family army,” including the Zhejiang Gang and the Fujian Gang. The highest-ranking figure in the Zhejiang Gang is Premier Li Keqiang. Within the Zhejiang Gang, there is a financial group, and both former CSRC chairman Yi Huiman and Fang Xinghai, who have fallen from grace, are members of this group. Yi and Fang, along with Li Keqiang, share a hometown connection in Wenzhou, with Yi being from Cangnan County and Fang from Yueqing, while Li Keqiang hails from Ruian.
Du Zheng cited information from the Zhejiang officialdom, stating that Fang Xinghai fell due to internal strife with Yi Huiman, with each holding leverage against the other. Fang Xinghai had reported Yi Huiman, who later fell from power and implicated Fang Xinghai.
“Caixin Online” previously reported information suggesting that Fang Xinghai and the then CSRC Chairman Yi Huiman had a tense relationship. During a meeting of the CSRC, after which participants and senior CSRC officials dined together in the cafeteria, Fang Xinghai had approached Yi Huiman mentioning his upcoming business trip in an attempt to engage with him. However, Yi Huiman ignored him completely, continuing to chat and laugh with others, leaving Fang Xinghai feeling embarrassed as he walked away with his tray.
Additionally, Yi Huiman was taken down in September last year, reportedly due to internal conflicts within the Zhejiang Financial Group.
On November 19, 2024, former Deputy Governor of Zhejiang Zhu Congjiu was sentenced to life imprisonment. Zhu had previously held senior positions in the CSRC and as the General Manager of the Shanghai Stock Exchange, before serving as Deputy Governor of Zhejiang for a decade, overseeing finance.
Chinese media reported that Yi Huiman’s investigation was not sudden but was brought about by a near-death confession from Zhu Congjiu. It was said that Zhu’s confession implicated branch managers of six prominent banks in Zhejiang, involving dozens of platform funds and private securities companies. Leaders of China Jin Capital had collectively gone missing, and even Yi Huiman was implicated.
Fang Xinghai got entangled in a trouble with Alibaba’s founder Jack Ma a few years ago.
According to Caixin Online, during the Ant Group’s IPO in 2020, which was approved during Fang Xinghai’s tenure as head of the issuance department, Fang Xinghai was determined to make it the largest IPO globally, being more concerned about Ant’s listing than the investment banks, accompanying the Ant team everywhere. However, on the eve of Ant Group’s listing on the Shanghai Stock Exchange, the process was suddenly halted.
On October 24, 2020, Jack Ma publicly criticized the Chinese regulatory system at the Shanghai Bund Financial Summit, and in November, the Ant Group’s IPO was abruptly suspended right before the formal listing. Subsequently, Alibaba was heavily fined, the Ant Group restructured its business, cutting ties with Jack Ma. Jack Ma even went overseas to avoid the spotlight.
The “Wall Street Journal” reported that at that time, Beijing’s investigation of Jack Ma did not end with the Ant Group being forced to undertake a rectification, but instead shifted focus to investigating the officials behind Jack Ma – how was the Ant Group’s listing rapidly approved by officials. Jack Ma’s relationship with relevant leaders was part of the investigation.
The article specifically mentioned the current Secretary of the Shanghai Municipal Party Committee of the CCP, Li Keqiang. Li Keqiang had previously served as the Governor of Zhejiang, the stronghold of Jack Ma’s business empire, and had always supported Alibaba Group and Jack Ma himself. During Li Keqiang’s tenure from 2017 to 2022 as the leader in Shanghai, the Shanghai government and Ant Group, Alibaba Group had signed strategic cooperation agreements in 2018 and 2020.
Du Zheng noted that as a confidant of Xi Jinping, Li Keqiang faced obstacles before the 20th Congress of the CCP, possibly due to leaks from his political opponents. However, with Xi’s support, Li Keqiang managed to pass through the challenges, ascend to the Political Bureau Standing Committee, and became the Prime Minister.
After the 20th Congress of the CCP, internal conflicts within the Xi family army intensified, with Vice Premier He Lifeng of the Fujian Gang holding the financial power.
Du Zheng indicated that in recent years, there has been a massive cleanup in the financial sector, with the Zhejiang Financial Group becoming a target, orchestrated by He Lifeng. Many officials of the Zhejiang Financial Group experiencing turmoil have had close ties with Li Keqiang during his time in Zhejiang. These related cases may have adverse effects on Li Keqiang.
The author suggested that Li Keqiang, upon assuming office, automatically secured his position as “Xi Jinping’s lackey,” making him the “weakest Prime Minister in history.” After serving as Prime Minister for over three years and facing a stumbling economic recovery in China, he may ultimately bear the consequences of the “Xi-style economy,” be unable to continue as Prime Minister, nor transfer to other positions like Chairman of the National People’s Congress, Chairman of the Chinese People’s Political Consultative Conference, or Vice President, leading to his ignominious exit. Furthermore, the resurfacing of the old Ant Group listing case may further add pressure and influence his trajectory.