China’s financial elite is leaving overseas one after another. This is because the authorities have criticized relatively high-wage financial workers as a ‘luxurious group’, and their salaries have decreased significantly over the past year or two, and authorities’ regulations, including arrests, are being strengthened day by day. There is an analysis that this is related to President Xi Jinping’s policy of emphasizing ‘common wealth (living well together)’ and supporting Alibaba, some large corporations, and famous celebrities.
On the 27th, Bloomberg News reported that the authorities have recently cracked down on the financial industry, claiming that it has “fallen into hedonism,” and that talent in this field is leaving. According to British job information company Morgan McKinley, about 80% of China’s major financial companies and financial services companies have lost key employees in the past six months. Grace, who works at an investment bank in Shenzhen, Guangdong Province, the economic center, said, “Salaries were frozen and annual bonuses were also reduced by 60%. “He will go to Hong Kong and look for a job.”
China International Capital Corporation (CCIC), a large investment bank, recently reduced executive bonuses by more than 40%. CITIC also reduced the basic salary of some employees by 15%.
The Discipline and Supervision Commission, the highest inspection body of the Chinese Communist Party, announced in February last year, “We must destroy the wrong ideas of the financial elite and correct the trends of hedonism and luxury.” Since then, last year alone, more than 100 financial figures were arrested on charges of corruption. A representative example is investment industry magnate Bao Fan, chairman of China Renaissance. He suddenly disappeared from public appearances early last year. Earlier this month, a year after his disappearance, he resigned as chairman. It was also known belatedly that he had been investigated by the authorities.
In March last year, the authorities strengthened direct control and supervision at the Communist Party level by establishing the Central Financial Committee and the Central Financial Operation Committee. The reason Alibaba founder Jack Ma is facing repeated regulatory withdrawals from the authorities is because he criticized the authorities’ financial regulations in October 2020, calling them ‘pawnshop operations’. Zou Chen, professor of finance at the University of Hong Kong, expressed concern that “China will get closer to the ‘planned economy’ system it had before implementing the reform and opening policy in 1978.”
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.