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Sylvia Ma

China’s anti-corruption campaign in the financial sector may not immediately boost confidence given the prevailing uncertainties, an analyst has warned.
However, it is believed that over time the drive could put the country on a cleaner governance path and help to attract overseas investors.
Beijing’s intensified anti-corruption drive has seen high-profile figures like Yi Huiman, the former head of China’s securities watchdog, placed under investigation.
He is being investigated by the Communist Party’s disciplinary unit as Beijing’s long-standing campaign extends from banking to the stock market.

Alfred Wu, an associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy, said the move catered to the “clean government” demand from international institutions and corporations entering a foreign market.
“Corruption is actually a form of ‘insider knowledge’. A better environment helps these companies take root without having to worry about bribery,” he said.
“From this perspective, in the long run, this will be beneficial for China in attracting foreign investment.”
Yi served as chairman of the China Securities Regulatory Commission from January 2019 to February 2024. He is under investigation for serious violations of discipline and law, the party’s Central Commission for Discipline Inspection (CCDI) said on Saturday. It did not provide further details.
Yi is not the only senior securities watchdog official – sitting or former – to face disciplinary action in recent months.
Several high-profile officials have come under scrutiny since April last year, when the CCDI launched investigations into China’s top financial regulators. They include Wang Jianjun, then vice-chairman of the CSRC, and Wang Huimin, the former head of the CSRC’s disciplinary office.
These cases form part of Beijing’s broader efforts to clean up the financial system and build a “financial superpower”, under a blueprint laid out by President Xi Jinping in January last year.
The blueprint focuses on the real economy while stressing that financial workers must stay honest and trustworthy, righteously pursue profits, and not seek quick success or benefits.


The heightened scrutiny reflects a broader transformation in the financial sector in recent years, characterised by shrinking profitability and widespread pay cuts amid ongoing economic challenges, including a prolonged slump in the property market.
Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis, expressed concern over the business climate, suggesting it might make industry professionals too “cautious” to foster the kind of innovation seen in the manufacturing sector.
Wu said that although the deeper clean-up drive might not directly boost market confidence in the short term, it could signal China’s “determination” to overseas investors in the long run, thereby serving as a driving force.
But he added that the challenge lay in how the campaign could create real deterrence, rather than simply driving the corruption “deeper underground”.
“Institutional and legal safeguards are essential for lasting anti-corruption [impact], but decisive action against individual officials remains an important part of enforcement.”


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‘No soil for corruption’: China’s Chen Weijun latest among Xinjiang officials investigated

Corruption in China

China’s financial anti-corruption drive will boost confidence in the long term: analyst

China aims to clean up the financial system and build a “financial superpower”, under a blueprint laid out by President Xi Jinping in January last year. Photo: Reuters

Yi Huiman was chairman of the China Securities Regulatory Commission from January 2019 to February 2024. Photo: Reuters

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China

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Challenge lies in how the campaign can create real deterrence, rather than drive the corruption ‘deeper underground’, observer says


Challenge lies in how the campaign can create real deterrence, rather than drive the corruption ‘deeper underground’, observer says.


China’s financial anti-corruption drive will boost confidence in the long term: analyst

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Challenge lies in how the campaign can create real deterrence, rather than drive the corruption ‘deeper underground’, observer says

Challenge lies in how the campaign can create real deterrence, rather than drive the corruption ‘deeper underground’, observer says