On November 16, 2024, former deputy governor of the Industrial and Commercial Bank of China (ICBC), Zhang Hongli, stood trial in Hangzhou. International media on the same day revealed the cooperation between Houpu Investment Management Company Chairman Fang Fenglei, who has connections with Zhang Hongli, and Goldman Sachs. They also disclosed the involvement of former Chinese Vice President Wang Qishan in these dealings. The official report on Zhang Hongli’s previous misconduct indirectly referenced the scandal of foreign investment banks recruiting princelings for personal gain.
According to information released by the Chinese Communist Party on November 14 of this year, from 2011 to 2022, Zhang Hongli, utilizing his position as a member of the ICBC Party Committee and vice president, provided assistance in loan financing, job arrangements, and other matters to relevant units and individuals, illegally receiving goods totaling more than 177 million yuan.
Zhang Hongli, a native of Heilongjiang, was implicated in various wrongdoings including using private jets without authorization, obtaining a fake doctoral degree, abusing power for personal gain, and violating post-employment regulations. He was accused of cultivating political clout and engaging in favoritism in hiring and personnel adjustments.
Regarding the violation of post-employment regulations, it is believed that Zhang Hongli departed ICBC in 2018 and took on the role of partner and co-chairman at the private equity investment fund, Houpu Investment.
Born in 1952, Fang Fenglei, chairman of Houpu Investment Management, has held various high-ranking positions in the financial sector before co-founding Houpu in 2007. He notably collaborated with Wang Qishan in establishing China International Finance Limited, the country’s first Sino-foreign joint venture investment bank.
It is reported that after leaving ICBC, Zhang Hongli briefly joined Houpu at Fang Fenglei’s invitation, but an internal strife ensued leading to Zhang Hongli’s swift exit and investigation.
Taiwanese financial expert Huang Shicong commented that Zhang Hongli’s involvement with Houpu Investment after leaving Deutsche Bank indicates troublesome connections with influential figures, possibly prompting authorities to scrutinize the origin of funds linked to these elites and princelings as Zhang Hongli’s relations could pose a potential risk.
As Zhang Hongli faces trial, reports from the Financial Times regarding his association with Fang Fenglei and Wang Qishan are drawing significant attention. These connections highlight deeper issues within the Chinese political and financial circles.
Chinese affairs expert Wang He mentioned that without insider revelations, foreign media would struggle to access such sensitive information, describing these leaks as reflections of internal power struggles within the Chinese Communist Party.
Gong Xiangsheng, Deputy Researcher at the Taiwan Institute for National Defense, stated that the recent crackdown on figures linked to Wang Qishan’s faction signals a shift in the focal points of investigation within the Chinese authorities. However, Wang Qishan’s close relationship with Xi Jinping may shield him from direct repercussions, affecting the sequence in which figures will be targeted for scrutiny or “harvesting” by the Xi leadership.
Wang Qishan retired as Chinese Vice President in 2018, and incidents involving two key members of the finance sector being investigated post-retirement, along with online speculations about his own alleged detainment, have raised concerns. Nevertheless, Wang Qishan’s recent public appearances at official events indicate his continued influence despite these controversies.
Rare mentions in official reports by the Chinese Communist Party highlight Zhang Hongli’s involvement in favoritism and personnel adjustments.
Reports in 2019 had indicated that Deutsche Bank had employed numerous inexperienced individuals with influential backgrounds, including relatives of high-ranking officials, in branches in China and Hong Kong. Zhang Hongli played a significant role in orchestrating these placements, involving figures like Liu Yunshan’s son and relatives of prominent party members. Allegations suggested leaders like Jiang Zemin, Wen Jiabao, and Wang Qishan had received gifts from Deutsche Bank.
In recent years, the Chinese government’s crackdown on high-ranking officials in the financial sector has intensified, resulting in a growing number of individuals being investigated annually.
Wang He emphasized that the Chinese Communist Party has been actively targeting corruption within the financial sector, especially in uncovering connections between princelings and overseas entities. Zhang Hongli, portrayed as a scapegoat without significant backing, is being used as a deterrent to those with deeper ties. By bringing Zhang Hongli’s case to light, Xi Jinping aims to ease tensions with veteran officials, sending a signal that though aware of their activities, he has chosen not to target them directly.