As the Chinese economy tackles a debt-bearing evergrande and a deteriorating power crisis, the Chinese Communist Party (CCP) is stepping up its anti-corruption efforts against state-owned banks and insurance institutions.
From October 10, the Central Commission for Discipline Inspection (CCDI) has sent a special team to 25 national support organizations in the financial sector to conduct inspections for about two months, according to a series of statements on the official website. ..
“The inspection is a political oversight,” Zhao Leji, head of the CCP’s anti-corruption group, publicly stated at a meeting on September 26 that he had mobilized and deployed a team for the inspection of the new round. .. report..
Mr. Zhao urges the party to “thoroughly investigate” the “political deviations” between the leaders of each organization and strengthen the party’s leadership in fiscal activities.
The 25 financial institutions under scrutiny include national banks and insurance regulators, stock exchanges, major state-owned banks, and wealth management and insurance companies in which the state owns a majority stake.
CCDI said Monday that the former chairman and leader of Chang’an Bank, based in northwestern Shaanxi, had been expelled from the party and public office for corruption.
Beijing News of State Media report On Monday, the party’s anti-corruption agency began investigating nearly 30 senior party executives in the financial sector this year on various frauds.
The announcement was made after the embarrassed real estate giant Evergrande missed a third bond coupon payment, raising concerns about a broader crisis.
Evergrande, which owns 1,300 projects in more than 280 cities, is working on more than $ 300 billion in debt. Investors are vigilant because they are concerned that the possibility of default could be another moment in Lehman. The idea is that the crisis of a large company could send a shock wave around the world. When Lehman Brothers filed for bankruptcy in 2008, it had a contagious effect on other major financial institutions, causing the worst economic disaster in the United States since the Great Depression and the collapse of the global market.
Meanwhile, more than half of China’s states are in the midst of a power crisis that disrupted the daily lives of tens of millions of people, crippled industrial production and disrupted the world’s supply chains.
Power shortages brought about by tight coal supply and Beijing’s energy consumption restrictions are putting further pressure on the country’s economy.
As a result, Nomura, Goldman Sachs and Fitch have lowered their forecasts for China’s economic growth this year.
In recent months, Chinese regulators have targeted some of the country’s largest companies, including Alibaba Group and Tencent Holdings, in sectors ranging from technology to education and real estate.
Reuters, Eva Fu and Annie Wu contributed to this report.