Chill spreads through PRC financial sector as bankers investigated, Eight-fold increase in China's exit bans, & Xi steps up war readiness with changes to military law -- China Boss News 5.08.23
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Chill spreads through PRC financial sector as bankers investigated
China's financial elites are in Beijing's crosshairs after the wife of a banker at China International Capital Corporation (CICC), a partially state-owned multinational investment firm, "flaunted" her husband’s $11k monthly paycheck on social media, the South China Morning Post reported. The woman’s online folly "quickly drew the ire of common folk and the attention of regulators," resulting in a swift pay cut that "quickly spread across the sector," news staff said.
SCMP:
“Many departments saw a pay cut or pay freeze,” said an employee of Citic Securities, China’s largest brokerage company, who did not want to be named. “People feel that we earn much more than average, and the tone became quite vicious after the CICC social-media incident.”
“Now the core message is to cut costs wherever we can, from allowances to salaries to travel benefits,” the employee said, adding the brokerage’s parent, CICC Group, has instructed staff to only fly economy class for travel times of less than five hours, while cutting or even denying staff bonuses for the last financial year.
Following the incident, the Central Commission for Disclipine Inspection, China's dreaded secretive agency in charge of investigating CCP members for corruption, “named the industry as a key area for anti-graft investigation,” SCMP said.
SCMP:
Hao Gang, a former deputy director of Beijing city’s financial regulator, was the latest to be put under investigation on Thursday.
Since Xi’s new cabinet took power in mid-March, at least 12 financial executives or regulatory officials have been investigated. These include former chairman of Bank of China Liu Liange, former chairman of China Everbright Group Li Xiaopeng, and others from China Investment Corp and China Development Bank.
The regulatory crackdown on the financial sector appears, for now, to be focused on state-owned brokerages in keeping with “Xi Jinping’s push for ‘common prosperity,’” analysts say.
New York Times’ Claire Fu noted that Beijing is also taking the opportunity to bring the industry further under state control by “deeply embedding party officials into state-owned financial institutions.”
NYT:
Mr. Xi and his deputies are using the disciplinary cases to force party loyalty on the financial system, said Wu Qiang, a current affairs writer and a political analyst in Beijing.
“They can only do it through the control of personnel changes, and run the party’s leadership through it,” Mr. Wu said.
For the rest of SCMP’s report, China’s crackdown on high-flying bankers sends jitters across brokerage industry, click here. For China Is Cracking Down on Bankers. Here Are Some of the Targets, click here.
Law and International Xi
Eight-fold increase in Chinese exit bans, report shows
“Analysis of Chinese court records shows eight-fold increase in cases mentioning exit bans between 2016 and 2022,” Reuters staff said last week, citing a report by Safeguard Defenders which says "[s]cores of Chinese nationals and foreigners have been ensnared" as a result of a recent barrage of new laws.
Safeguard Defenders:
Just last week, China approved new amendments to its Counter-espionage Law, that will allow exit bans on anyone under investigation (Chinese and foreigners) or on Chinese nationals if deemed a potential national security risk after leaving the country.
This means that between 2018 and July of this year, no less than five new or amended laws provide for the use of exit bans, for a new total of at least 15 laws.
In the absence of transparent official data and excluding ethnicity-based exit bans, which number in the millions, we estimate that at least tens of thousands of people in China are placed on exit bans at any one time. Many of these exit bans are illegitimate and violate the Universal Declaration of Human Right’s principle of Freedom of Movement.
Exit bans can also be applied in civil disputes to prevent foreigners from leaving China, the group said.
Safeguard Defenders:
Deliberately vague wording in the Civil Procedure Law means that individuals not even connected to the dispute can be trapped in China. Irish businessman Richard O’Halloran was barred from leaving China for more than three years (2019 to 2022) because the company he worked for was involved in a commercial dispute, even though he wasn’t even working for the firm when the dispute began.
For the rest of Safeguard Defenders’ report, New Report: Trapped - China’s Expanding Use of Exit Bans, click here. For Reuters’ coverage, China's exit bans multiply as political control tightens under Xi, click here.
Geopolitics
Xi steps up war readiness with changes to military service laws
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