China is ratcheting up oversight of the nation’s $54-trillion U.S. financial sector in order to root out corruption.
A team led by the Central Commission for Discipline Inspection will start a two-month anti-graft check of the China Banking and Insurance Regulatory Commission and accept complaint reports from whistleblowers until December 15 of this year.
China’s government said the move is a reflection of the Communist Party’s focus on financial regulation. The latest investigation zeroes in on entities including the People’s Bank of China, the China Securities Regulatory Commission, the Shanghai and Shenzhen stock exchanges, the biggest state-owned banks, as well as bad-debt managers including China Huarong Asset Management Co.
The Chinese government’s latest move underscores the party’s increasingly tough stance on corruption among corporate executives. More than 1.5 million government officials have been punished in the years-long campaign, most recently including the execution of Lai Xiaomin, the former chairman of Huarong, and life imprisonment of Hu Huaibang, the former chairman of the nation’s biggest policy bank.
Chinese financial stocks were mixed at the close Tuesday in Shanghai, with Agricultural Bank of China slipping 0.3% and Industrial & Commercial Bank of China adding 0.2%. Bank of China was little changed.
The banking scrutiny also comes as Chinese authorities are cracking down on everything from fintech platforms to property developers to limit financial risks.
Global investors have been unnerved by the regulatory onslaught from Beijing targeting its biggest technology companies and other industries as well as a push by President Xi Jinping to create “common prosperity,” a campaign to narrow the wealth divide.