The lower-income population often falls victim to financial crimes perpetrated by officials of the Chinese Communist Party (CCP). On June 25, 2022, depositors from rural banks in Henan reported official misconduct to the Henan Banking and Insurance Regulatory Bureau after being unable to withdraw their funds. (Provided by interviewees)
[People News] As China's economy continues to struggle, particularly by 2026, the CCP's approach to punishing financial crimes has shifted from previous measures of 'fines and dismissals' to extreme actions such as 'political purges, asset confiscation, and physical elimination.' Despite this, the lure of money remains a powerful temptation for CCP officials, leading some to take risks with a sense of invincibility.
Liberty Times reported that on June 23, the National Audit Office of China published the 'Audit Work Report on the Implementation of the Central Budget and Other Financial Revenues and Expenditures for 2025,' which revealed tax violation issues related to China Bank in the financial risk section.
The report indicated that from April 2023 to August 2025, China Bank arranged for two of its subordinate financial institutions to serve as business channels, mobilizing a significant number of employees to contribute amounts ranging from 1 yuan to 100 yuan in a 'gathering heads' scheme. This allowed them to package 11 private equity funds as public fund products and exploit the tax exemption policy for public funds, resulting in a total tax evasion of 2.367 billion yuan.
In response, China Bank expressed its sincere acceptance of audit supervision, emphasized the importance of the issues raised in the audit, conducted a thorough analysis of the underlying causes, committed to immediate rectification, refined and clarified its measures, and actively promoted corrective actions.
Furthermore, the report from the National Audit Office of China specifically identified the Agricultural Bank of China, stating that from December 2021 to August 2025, its pre-loan reviews were lax, leading to the illegal issuance of loans totaling 11.066 billion yuan to non-high-standard farmland projects. Some of these funds were misappropriated for purchasing wealth management products and repaying debts, among other uses.
The report from the National Audit Office of China has undoubtedly set off a significant upheaval in the already unstable Chinese financial sector. As one of the four major state-owned banks and a key representative of the nation's credit image, the Bank of China (BOC) has shockingly taken the lead in engaging in underground money lending and local usury practices, employing the low-level scam of 'gathering heads' to assist specific interest groups in evading taxes totaling 2.367 billion yuan.
The Bank of China stands as the most internationalized flagship institution representing the country's financial image. The willingness of executives and staff within such a major institution to risk political repercussions by participating in this 'gathering heads' scam raises serious questions about the state of the system.
This situation reveals that even the most central officials within the financial system have lost all hope for its future. They are acutely aware of the Communist Party's local debts being a bottomless pit, the depth of unfinished real estate projects, and the fragility of the financial system's underlying assets. The survival instinct of these financial officials is simply to 'take what they can and escape with whatever they can.'
In recent years, the official stance on the cleansing of the financial sector has been characterized as 'tracing back twenty years' and thoroughly investigating 'financial insiders.' Statistics show that in recent years, dozens, even hundreds, of core officials and executives within the financial system have been dismissed each year. Recent high-profile cases of officials 'falling from grace' and the subsequent verdicts highlight the extent to which corruption within the Communist Party has infiltrated the financial system.
The Collective Downfall of the 'Top Leaders' of the Four Major Banks
The power center of the Chinese Communist Party's financial system—the four major state-owned banks and policy banks—has recently witnessed a significant number of former and current top officials being dismissed. The charges against them are often closely linked to 'blind expansion, leading to massive non-performing assets, and political disloyalty.'
In February 2024, Liu Liange, the former Party Secretary and Chairman of the Bank of China, was removed from his position due to allegations of bribery and illegal loan issuance, with the amounts involved being extraordinarily large, resulting in a public prosecution by the People's Procuratorate of Jinan City, Shandong Province.
The National Development Bank, which is responsible for financing major national projects, has also become a major area of corruption.
In May 2023, Zhou Qingyu, the former Vice President of the National Development Bank, was dismissed. In July 2023, former Vice President Wang Yongsheng was officially announced to be under investigation. Additionally, former Chairman Hu Huaibang and others were dismissed in succession. Several provincial branch presidents of the National Development Bank have also undergone a 'group-style' purge.
Furthermore, at China Everbright Group, the former chairmen Tang Shuangning and Li Xiaopeng were both dismissed in quick succession. The investigation into these financial magnates, who control trillions in assets, has caused a significant upheaval throughout the entire Everbright system.
In September 2023, Liu Lixian, the former Secretary of the Discipline Inspection Commission of the Industrial and Commercial Bank of China (ICBC), voluntarily surrendered, followed by the investigation of former Vice President Zhang Hongli and other key senior officials.
The central regulatory agency, which is responsible for rule-making and holds the power of financial approvals, is also facing a political purge.
Yao Gang, the former Vice Chairman of the China Securities Regulatory Commission (CSRC), and Zhu Congjiu, a former assistant to the chairman, have been dismissed from their positions. Recently, several former officials responsible for reviewing Initial Public Offerings (IPOs) have also been taken in for investigation.
The People's Bank of China (PBOC) has expelled former Vice Governor Fan Yifei from the Party and public office due to allegations of accepting substantial bribes and engaging in corrupt transactions, facing extremely severe legal penalties.
During the boom of economic bubbles, these financial officials recklessly issued loans, inflated the finances of real estate giants, and embezzled funds, leading to the creation of numerous "bad debt bombs." Now, as the Chinese economy enters a downturn, companies like Evergrande and Country Garden, along with various municipal investment bonds, are facing defaults, revealing a treasury filled with bad debts.
Financial executives serve as the 'white gloves' for red families.
Within the political and financial ecosystem of the Chinese Communist Party (CCP), there is a close and inseparable relationship between "high-ranking officials in the financial system" and "top-tier powerful families (red families)." While the authorities will not specify which red family these officials served as 'white gloves' in their announcements, extensive investigations by overseas journalists, financial intelligence agencies, and in-depth analyses of the CCP's high-level politics have already clarified a distinct chain of interests and indirect evidence.
Many of these dismissed financial executives essentially act as agents for powerful families in the financial sector, responsible for 'managing, laundering, and amplifying' their wealth. This serves as the most direct, indirect evidence. What rationale does an ordinary private enterprise or investment company have to easily secure hundreds of billions or even trillions in funding from state policy banks (such as the China Development Bank) or large state-owned banks?
The former chairman of the China Development Bank, Hu Huaibang, and former vice president Zhou Qingyu, among others, have been implicated in scandals involving major conglomerates such as "Hua Xin Energy" (Ye Jianming) and "Ming Tian Xi" (Xiao Jianhua). Investigations conducted overseas and in Hong Kong have confirmed that these conglomerates serve as public fronts for several families connected to members of the Politburo Standing Committee. Hu Huaibang and his associates ignored risks and unlawfully approved substantial state loans to these companies, effectively leveraging state power to benefit the elite families behind them.
One of the most infamous cases involves Liu Jinbao, the former deputy director of the Hong Kong and Macau Management Office of the Bank of China and president of Bank of China Hong Kong. He was removed from his position in 2003 and subsequently sentenced to death with a two-year reprieve in 2005.
In the lead-up to the 16th National Congress of the Communist Party of China in 2002, as Jiang Zemin was preparing to step down as General Secretary, data from international financial organizations, such as the Bank for International Settlements (BIS), revealed that a mysterious, ownerless fund amounting to billions of dollars had exited China. Liu Jinbao, who was in control of Bank of China Hong Kong and had significant authority over the allocation of overseas funds, quickly became the target of external scrutiny. Reports and investigations circulating abroad accused Liu Jinbao of using non-banking financial institutions and offshore accounts in the Caribbean (including the Cayman Islands) to facilitate the transfer of vast assets overseas for high-ranking families in a fragmented manner. The widely discussed mysterious fate of the "2 billion dollars" has since emerged as a key piece of evidence against the Jiang Zemin family, accused of privatizing state assets.
The Intersection Network of 'Financial Big Sharks' and 'Fallen Officials'
In 2017, Xiao Jianhua, the leader of the 'Tomorrow Group,' was brought back to the mainland from Hong Kong, along with Wu Xiaohui of Anbang Group (the former son-in-law of the Deng Xiaoping family). Both are recognized as top-tier facilitators in the financial sector.
As these big financial sharks are purged and their assets confiscated, the financial officials who have long been in collusion with them are bound to face repercussions. For instance, the recently ousted former president of China Merchants Bank, Tian Huiyu, and the former chairman of Everbright Group, Tang Shuangning, had highly intricate 'cross-shareholding' and 'interest transfer' relationships with these capital factions that have deep-rooted connections to the Communist Party during their tenures. The downfall of such officials often occurs when higher authorities target the economic lifelines of specific powerful families.
In the political landscape of the Chinese Communist Party, officials within the financial system are typically selected and promoted by specific political factions.
The modernization of China's financial system and the opening of its capital markets were primarily established during the leadership of Jiang Zemin and Zeng Qinghong, as well as Zhu Rongji's economic stewardship. Many of the recently fallen financial executives (including veterans from Everbright, Bank of China, and the central bank) can trace the origins of their careers and their protective power back to the red families of the Jiang-Zeng era.
As the leader on the high platform faces a severe fiscal crisis in 2026 and needs to 'absolutely control the purse strings,' the purging of these officials not only allows for the confiscation of their families' assets to replenish the treasury but also politically diminishes the remote control capabilities of powerful families like Jiang and Zeng over the nation's financial lifeline.
The 'special channel' for transferring assets overseas.
Many reports concerning fallen financial officials contain a recurring phrase: 'concealing and failing to report overseas assets' and 'engaging in power-money transactions abroad.'
For a bank president at the provincial or departmental level, laundering hundreds of millions or even billions of dollars overseas (to places like Switzerland, the Cayman Islands, or the United States) would be nearly impossible under strict foreign exchange controls without the aid of an 'offshore trust' or a 'transnational financial privilege channel' controlled by elite families. Their ability to successfully launder money stems from their role in assisting high-ranking families in managing overseas assets, while also taking a share for themselves.
However, in their pursuit of this 'share,' they ultimately become scapegoats, discarded by their masters. When political tides shift, or when the system itself causes economic collapse and depletes the treasury, the masters will need to deflect blame, calm public outrage, or, when factional struggles fail, this 'white glove' will be mercilessly thrown into the meat grinder, with their bodies destroyed and their assets confiscated to obscure the crimes of the powerful figures behind the scenes. These once lofty 'white gloves' ultimately become sacrifices to the party flag.
(First published in People News)
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