China’s top graft buster is turning its sights on the financial industry with plans to dig into organizations ranging from the world’s biggest bank to the regulator overseeing a volatile stock market.
The People’s Bank of China, the nation’s five biggest lenders, sovereign-wealth fund China Investment Corp. and the banking, securities and insurance regulators are among 31 entities that will be inspected for possible misconduct or corruption.
The Communist Party’s Central Commission for Discipline Inspection is set to carry out its first broad checks on the finance industry since President Xi Jinping became the party’s head in November 2012. Announced in a statement on Friday, the inquiries will add to post-rout probes that have snared executives executives from Citic Securities Co. and a senior official at the China Securities Regulatory Commission.
“It’s happening at a sensitive time,” said Zhu Lijia, a professor of public policy at the Chinese Academy of Governance, a government-linked institute, citing the imminent release of China’s next five-year plan for the economy.
“A corrupted financial system could threaten the nation’s economic security, which will be a growing concern as the downward pressure on the Chinese economy intensifies,” said Zhu. “The central leadership must have learned the problems from the market rout and realized it’s important to clean up the system before further reforms.”
Under Xi, corruption investigations have brought down top generals, a former top presidential aide, China’s retired security chief and senior executives from powerful state-owned enterprises.
Citic Group Corp., the conglomerate that is the parent of China’s largest brokerage, China Development Bank and the Shanghai and Shenzhen stock exchanges are also on the list. The banks to face checks include Industrial & Commercial Bank of China Ltd., the world’s largest by assets.
Zhang Yujun, an assistant chairman at the stock regulator, is under investigation on suspicion of “severe disciplinary violations,” the Communist Party’s disciplinary committee said Sept. 16, using language that often refers to corruption probes.