Chinese leader Xi Jinping is increasing scrutiny on the connections between China’s state banks and other major financial players, and large private-sector firms, widening the crackdown on “capitalist forces” in the economy, reports The Wall Street Journal. Mr. Xi, who started the clampdown late last year with a regulatory assault on private technology giants, is launching a sweeping round of inspections of financial institutions.
People with knowledge of the plan told the WSJ that the inspections, announced in September with few details, focus on whether state-owned banks, investment funds and financial regulators have become too friendly with private firms. Including some that have recently landed in Beijing’s crosshairs, such as property giant China Evergrande Group, ride-hailing company Didi Global and financial-technology firm Ant Group.
The examination, which is led by China’s top anti-corruption agency and centers on 25 financial institutions at the heart of the Chinese economy, is part of his broad effort to steer China towards a system with “common prosperity.”