Since the beginning of 2024, a wave of anti-corruption has swept through the banking system in China. According to a compilation based on reports from the website of the Central Commission for Discipline Inspection of the Communist Party of China, announcements from public prosecutors, and reports in official media, it has been found that as of May this year, dozens of senior and mid-level bank managers have been under investigation for suspected violations of discipline and law. This crackdown has reached across various levels of the banking sector, including state-owned major banks, policy banks, local city commercial banks, and rural credit cooperatives, with positions ranging from vice-presidents to grassroots branch managers across more than ten provinces.
Analysts point out that this round of anti-corruption differs from previous targeted investigations, showing characteristics of a systemic cleanup. Several financial industry insiders interviewed by Epoch Times believe that this is not only a continuation of the Chinese Communist Party’s financial rectification, but also a move to establish barriers for preventing financial crisis risks.
Public data shows that almost every week since 2024, bank officials have been under investigation. Just in April of this year, at least seven officials from the Henan Province branch of China Construction Bank, including the former branch manager Shi Tingfeng and former vice president Lu Jianhua, were investigated. Shi Tingfeng previously served as the branch manager of the Henan Province branch, later transferred to be the chairman of the Postal Savings Bank of China Henan Branch and deputy director of the Construction Bank Research Institute, where he had been actively involved within the Construction Bank system for a long time.
Since last year, senior executives from Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, Bank of Communications, and Postal Savings Bank of China have also been investigated. According to statistics from the Central Commission for Discipline Inspection of the Communist Party of China as of the end of April this year, 90 financial industry professionals have been investigated, with 63 individuals from the banking system, including 34 from the six major state-owned banks. Specifically, Industrial and Commercial Bank of China had 6 individuals, China Construction Bank had 10, Agricultural Bank of China had 7, Bank of China had 7, Bank of Communications had 2, and Postal Savings Bank of China had 2.
Regarding policy banks, the China Development Bank, Export-Import Bank of China, and Agricultural Development Bank of China have also seen high-level officials being investigated, totaling 11 individuals, with the Agricultural Development Bank of China having the highest number of personnel involved, which amounts to 5 individuals.
Additionally, rural credit cooperatives and regional banks have also become focal points of this anti-corruption storm. According to data, 14 individuals come from regional rural credit cooperatives and city commercial bank systems, with a total of 5 individuals investigated in the rural credit cooperatives in Guangdong, Sichuan, Shandong, Yunnan, Hubei, among other regions. Regional banks such as Sichuan Bank, Guizhou Bank, Jiangxi Bank, and Chongqing Rural Commercial Bank have also seen multiple officials being investigated.
This anti-corruption campaign has exhibited a “top-to-bottom” approach, with those investigated ranging from “deputy department-level” executives of state-owned major banks to grassroots branch managers in remote cities. Peng Desheng, a policy advisor at Bank of Beijing, told Epoch Times that this “vertical penetration” rectification method reflects the central government’s intention to reshape the governance structure of the financial system through the anti-corruption campaign. Appointment of officials in the future is likely to lean towards “technocratic bureaucrats,” gradually breaking away from the old network of interests based on political and business backgrounds.
Sun Tao, a scholar specializing in Chinese financial law at Shandong University, stated in an interview with reporters that this round of anti-corruption is not an isolated incident but a result of the coordinated efforts of central inspections and audits: “The Central Commission for Discipline Inspection previously initiated a special inspection of the financial system, combined with the National Audit Office’s thorough audit of policy banks and local debt issues. The officials being investigated are mostly concentrated within the financial system previously covered by inspections, indicating that the problems had been accumulating for a long time.”
Several industry insiders have indicated that the downfall of high-ranking bank officials reflects the long-standing existence of a “quid pro quo” chain under the pressure of local lending. A retired individual from a state-owned bank branch in Guangdong, Mr. Guo, revealed in an interview: “Internally within our system, we have known for a long time that risks have been accumulating significantly. Many local branch managers were cajoled into lending by ‘tasks’, as they would not be able to meet targets if they did not lend. Some branch managers arranged corporate loans through intermediaries, took a cut, and transferred the money overseas to buy houses. Many of those under investigation now are ‘old bank personnel’ who climbed up the ranks through political and business connections. There has been immense pressure over the past couple of years, and it was only a matter of time before things went wrong.”
Mr. Guo disclosed: “Officials from several local banks in Zhejiang and Jiangsu had already earned money and transferred it to Australia and Japan for property investments as early as 2015, if not earlier. Some of them have already been placed under border control and cannot leave the country; these properties may have been abandoned.”
Yao Liming, a policy consulting advisor familiar with financial regulation in Beijing, told reporters, “Looking at the current list of fallen officials, it is not only the heads of provincial branches who have been investigated but also branch managers from remote cities being purged. This ‘vertical penetration’ anti-corruption approach is both political purification and a means to clear obstacles for financial reform. Future appointments are likely to favor ‘technocratic bureaucrats’ and those with backgrounds in risk control.”
An individual in Shanghai who is a leader in a financial technology company, speaking on condition of anonymity, told reporters, “The financial system has long been a stronghold controlled by the privileged, where banks have been used to facilitate local finances, even serving the financing and flight of capital for local elites. The current anti-corruption efforts have concentrated on addressing issues accumulated over the past decade.”
The individual added, “Many bad debts in local banks cannot be written off and can only rely on new loans to ‘borrow new to pay old’. Regulatory authorities are aware of this, and this anti-corruption wave is both a purge and a way to make room for the next financial restructuring.”
According to previous reports from the Central Commission for Discipline Inspection of the Communist Party of China, most of the investigated bank officials were implicated in irregularities such as improper loan disbursements, bribery, quid pro quo arrangements, and profiteering through the use of urban investment platforms, with individual cases also involving money laundering through intermediaries and assets being transferred overseas.