China launches anti-graft campaign in finance sector by inspecting banking regulator

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BEIJING (Businesshala) – China’s top anti-corruption watchdog has called off a nearly two-month oversight of the country’s banking and insurance regulator as part of a broader campaign to weed out corrupt Communist Party officials in the financial sector.

FILE PHOTO: The headquarters of the Central Commission for Discipline Inspection of the Communist Party of China is pictured in Beijing, China February 10, 2018. Image was taken on February 10, 2018. Businesshala/Jason Lee

The Central Disciplinary Inspection Commission (CCDI) is deploying teams across 25 financial institutions, including central banks, stock exchanges, banks and asset management companies, with orders to focus on their party committees.

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A statement issued late Monday by the China Banking and Insurance Regulatory Commission (CBIRC), the first body under investigation, said inspectors would look for any breach of political discipline – a party euphemism for corruption.

“Finance is the core of the modern economy, and is linked to development and security,” Yang Guozhong, the officer in charge of oversight of the CCDI, said in the statement.

“Inspection is political oversight, and a powerful and comprehensive means of governing the party in a strict manner,” Yang said.

“There should also be no systemic financial risk – this is the bottom line that we must defend strongly,” he said.

In late September, China’s top anti-corruption official Zhao Leizhi called for a thorough inspection to uncover political divergences in party organisations, as well as problems affecting the development of the financial sector.

On Monday, the CCDI said the former chairman and party chief of Chang’an Bank, located in the northwestern province of Shaanxi, had been expelled from the party and public office due to corruption.

Chinese President Xi Jinping is investigating ties that state banks and other financial institutions have developed with large private companies, the Wall Street Journal reported on Monday, citing people with knowledge of the plan.

In recent months, Chinese regulators have targeted sectors ranging from technology to education and property, targeting some of the country’s biggest firms such as Alibaba Group and Tencent Holdings.

Reporting by Ryan Woo; Editing by Simon Cameron-Moore

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