Shanghai Paine Energy Technology, hailed as China’s leading energy storage company, has recently seen its chairman, Wei Zaisheng, also chairman of Zhongxing Xin Communication, fall from grace. Zhongxing Xin has faced sanctions from the United States at least twice for providing support to Iran and Russia, and may be implicated in Jiang Mianheng’s hidden interest network. Analysts believe that this may be a prelude to the cleanup of Zhongxing.
On May 19, Zhongxing Xin, a large investment holding group with assets exceeding billions, announced that it had received a notice from the Supervision Committee of Yongqing County, Hebei Province, stating that their chairman, Wei Zaisheng, was under investigation and detention. Just a week earlier, Wei Zaisheng had been elected as the new chairman. It is unclear why the investigation and detention were conducted by the Supervision Committee of Hebei instead of Shenzhen, where Zhongxing Xin is based.
On May 20, staff from the securities investment department of Paine Energy Technology stated that they were unaware of the reasons behind Wei Zaisheng’s investigation and detention, while emphasizing that the company’s board of directors, board of supervisors, and the operations of its subsidiaries were proceeding normally. However, on that same day, Paine Energy Technology’s stock dropped significantly by over 13%.
Public records show that Wei Zaisheng, born in 1962, graduated with a bachelor’s degree in Mechanical Manufacturing Management Engineering from Xi’an University of Technology in 1988 and obtained a Master’s degree in Business Administration from Peking University in 2004. He held various positions at Zhongxing, starting from the finance department to eventually becoming a director.
Wei Zaisheng had been working with Zhongxing’s founder Hou Weigui for more than thirty years, serving in key financial roles within the Zhongxing group. Following Hou’s retirement, Wei Zaisheng took on the role of legal representative and chairman of Shanghai Paine Energy Technology in October 2019.
Regarded as a disciple of Hou Weigui, Wei Zaisheng held executive positions in several companies under the Zhongxing umbrella, including serving as chairman of companies like Shenzhen Xingwei Investment, Shenzhen Aviation Electronics Industry Equity Investment Fund, Shenzhen Zhongxing Cloud Services, Shenzhen Zhongxing Weixiantong Equipment, Hangzhou Sinan Equity Investment, Shenzhen Xinglian Digital Technology, and Hainan Xinghang Technology.
The trio of Paine Century, Paine Energy Technology, and Zhongxing New Materials was the trinity forming Hou Weigui’s energy storage empire. Among them, Paine Energy Technology had risen to become a leading player in the energy storage industry. Prior to the incident, Wei Zaisheng had been serving as the chairman of Paine Energy Technology and had also been a board member of Paine Century.
Just a week before the incident, on May 13, Wei Zaisheng was elected as the new chairman of Zhongxing Xin Communication, a large investment holding group with assets exceeding billions, marking his seventh year in the position.
Paine Energy Technology, established as a wholly-owned subsidiary of Zhongxing Xin Communication in 2009, primarily focuses on energy storage battery systems, specializing in iron-lithium phosphate core, modules, and energy storage battery systems. In 2020, Paine Energy Technology went public on the A-share market, earning the title of “top energy storage company.” Zhongxing Xin remains the largest shareholder, holding a 24.61% stake.
It is worth noting that when Paine Energy Technology was first listed, its IPO price was only 56 yuan (about $7.73), but by 2022, with the expansion of overseas energy storage business, the stock price soared to 509.51 yuan (approximately $70.32), reaching a market capitalization exceeding 90 billion yuan (about $124.22 billion).
Hou Weigui, the founder of Zhongxing, initially an engineer, graduated from Nanjing Wireless Industry School and once served as a technical director at the Aviation 691 Factory. In the early 1980s, he was sent to the United States to oversee technical introductions before returning to establish Zhongxing in Shenzhen.
In 1993, Zhongxing Xin Communication Limited was formally established with capital from China Aerospace Science and Industry Corporation, and in 1997, Zhongxing Communications Co., Ltd. was founded and listed. In 2004, Zhongxing was officially listed on the Hong Kong Stock Exchange as the first A-share listed company from China to be listed on the H-share market.
As a commercial giant, Zhongxing mainly focuses on the research, development, production, and sales of communication equipment, terminals, and solutions, particularly excelling in fields like 5G, Internet of Things, and cloud technology, positioning itself as a leading enterprise in the industry.
Zhongxing’s development trajectory was closely tied to the period when Jiang Zemin was in power. Political commentator Li Yanming believes that on one hand, Zhongxing has covert connections to the CCP’s military-industrial complex, and on the other hand, it is closely intertwined with the telecommunications system manipulated by Jiang Mianheng, the Chinese Academy of Sciences, and the Shanghai clique. Wei Zaisheng’s investigation could indicate the beginning of a cleanup within Zhongxing or even a milestone in eliminating the Shanghai clique.
Li Yanming noted that Jiang Mianheng previously served as the deputy director of the Chinese Academy of Sciences and a member of the board of directors of China Network Communications Co., Ltd. (CNC), known as the “Chinese Telecom King,” overseeing China’s power and energy sector. From its establishment to its development, Shanghai Paine Energy has been under Jiang Mianheng’s control, highlighting Wei Zaisheng’s crucial role as a bridge between Zhongxing and the Shanghai clique.
Public records reveal the close cooperation between Zhongxing and the Chinese Academy of Sciences. On December 25, 2017, Zhongxing Communications and China Academy of Sciences Holdings, along with the China Academy of Sciences Innovation Incubation Investment Co., Ltd., signed a strategic cooperation agreement in Beijing to collaborate on technology talent, scientific achievements, technology industry development, overseas innovation network layout, and quantum communication.
On April 16, 2018, the U.S. Department of Commerce announced a seven-year ban on American companies selling components, goods, software, and technology to Zhongxing Communications, citing violations of U.S. restrictions on selling American technology to Iran. The ban is set to remain in place until March 13, 2025.
In April of this year, U.S. Treasury Secretary Yellen and Secretary of State Blinken issued warnings to senior Chinese officials during their visit to China, urging the CCP to stop supporting Russia’s invasion of Ukraine. On May 1, the U.S. government imposed sanctions on nearly 300 companies and individuals, with over 20 of them being Chinese enterprises, including Zhongxing and Huawei, for providing defense technology to Russia.