Recently, the Chinese Communist Party (CCP) has put forward a solicitation draft regarding the “Whistleblower Reward for Securities and Futures Violations,” renaming informants as whistleblowers and raising the maximum reward for each case to 1 million yuan. Experts point out that due to the lack of independent and fair judiciary and effective social supervision within the CCP system, whistleblowers face significant political risks, making the whistleblower system difficult to operate effectively.
According to CCP state media, building upon the 2020 “Interim Provisions on Reporting Illegal Acts in the Securities and Futures Markets” by the China Securities Regulatory Commission and the Ministry of Finance, the CCP has released the “Provisions on Whistleblower Rewards for Securities and Futures Violations (Draft for Solicitation of Opinions)”.
The document includes major cases that seriously disrupt the order of securities and futures markets, endanger financial security, and infringe upon the legitimate rights and interests of investors within the scope of rewardable cases. The conditions for rewardable cases have been raised from a penalty amount of 100,000 yuan to 1 million yuan. Anonymous whistleblowers who provide relevant supplementary information as required, as well as whistleblowers who play a minor or assisting role in illegal activities, may also be eligible for rewards.
The provisions also increase the reward amount from 1% to 3% of the penalty amount for each case. For providing significant clues on illegal activities, the maximum reward has been raised from 100,000 yuan to 500,000 yuan. If the case clues provided have a significant impact nationwide, involve particularly large amounts, or the whistleblower is an insider, the maximum reward per case has been raised from 300,000 yuan or 600,000 yuan to 1 million yuan.
Professor Sun Guoxiang of the Department of International Affairs and Business at South China University of Technology told The Epoch Times that the authorities have introduced the whistleblower system as a preemptive measure, reflecting their high level of anxiety about financial stability. Additionally, amidst slowing economic growth and increasing local fiscal pressures, combating financial crimes to obtain substantial fines can serve as a supplementary means to support public finances. Furthermore, in the political environment of the CCP, the whistleblower system theoretically can be used to target specific capital groups or political adversaries.
Chinese affairs expert Wang He told The Epoch Times that whistleblower systems exist internationally, and this move by the CCP aims to align with global standards, including changing the name of the documents to whistleblowers from informants. The direct background to this action is the financial crisis faced by the CCP, as the authorities require stable securities and financial markets to provide an opportunity for the economy to recover from its current challenges.
Sun Guoxiang also noted that the official regulations focus primarily on rewards, with limited emphasis on the personal safety and professional careers of whistleblowers, as well as how their families will be protected. In an environment lacking an independent judicial system and news supervision, whistleblowers are extremely vulnerable, particularly given the CCP’s tendency towards selective law enforcement. If the reported individuals are protected insiders, the clues provided could easily be ignored, leaving the whistleblower vulnerable to accusations of false reporting and subsequent hardship.
Wang He also mentioned the brutal extent of internal power struggles within the CCP, where being a whistleblower entails constant danger. Ensuring the safety of whistleblowers requires an independent and fair judiciary and effective social supervision, both of which are absent in CCP society.
“With each case involving conflicting interests among various factions, and potentially personal interests of those in power, whistleblowers are drawn into a whirlpool where their fate remains uncertain. China currently lacks basic political ethics, and the entire political operation is controlled by the elite. Within the current framework of the CCP, the whistleblower system is unlikely to operate effectively,” he said.
Some overseas netizens have drawn parallels to Dr. Li Wenliang, the whistleblower of the COVID-19 pandemic, who was subsequently targeted by authorities, leading to his untimely death.
Sun Guoxiang stated that Dr. Li Wenliang was undoubtedly a broader type of whistleblower, as he sounded the alarm about the new infectious disease to the outside world and faced reprimand, highlighting the significant political risks that whistleblowers face within the CCP system.