Xi's corruption crackdown targets finance sector

BEIJING

Xi Jinping's crackdown on official corruption has ripped through a secretive missile force, the Communist Party elite, the national football team, and now risks hammering a finance industry already grappling with an economic slowdown.

Since rising to power a decade ago, Xi has waged a constant campaign against deep-seated graft that has led to the punishment of at least 4.7 million officials, according to a 2022 report by the state-run Global Times.

The number of publicly disclosed investigations into senior-level officials rose by 40 percent last year compared with 2022, according to a tally by the Hong Kong-based news outlet South China Morning Post.

And Xi has lately vowed to root out deep-seated malfeasance in the finance, banking and state-owned sectors even as a property crisis, high local government debt and chronically low consumption sap economic vitality.

"Xi simply does not see economic stability as the prime concern, despite the fact that the party extensively relies on growth and development to control grievances and generate support," said Alex Payette, chief executive of Cercius Group, a consultancy specializing in Chinese domestic politics.

He said Xi was targeting a series of critical industries to cushion the impact of foreign sanctions and wrest the economy fully under party control.

For the Chinese leader, "most issues stem... from cadres being led astray from the correct ideological foundation of the party," Payette said.

"Degenerative corruption... directly results from market mechanisms and foreign ideas."

Meanwhile, Xi sees "no contradiction" between shoring up the economy and risking further turbulence in key sectors, said Victor Shih, an associate professor at the University of California, San Diego.

"He would like officials to behave in a clean and efficient way all the time [but] has reduced official pay and benefits to the majority of officials," Shih told AFP.

That, he added, "increases incentives to engage in corruption" and triggers a recurring sequence of arrests.

Xi this month urged "greater efforts" to solve "grave and complex" corruption problems.

Proponents say the campaign promotes clean governance, but critics counter that it also serves as a vehicle to purge political adversaries.

The drive has ensnared former officials at state-owned banks, the banking regulator and state-owned oil and tobacco firms in recent weeks.

China abruptly removed its foreign and defence ministers last year, as well as several members of a shadowy body running its nuclear arsenal.

No official reasons were given, but reports circulated that some cases were connected to corrupt practices.

Wedeman, of Georgia State, said the campaign "is like the American war in Vietnam: The body count keeps rising but we never get any closer to the light at the end of the tunnel."

It was likely to persist for the rest of his rule, Wedeman said, adding that Xi "cannot afford to lose."