Zhang Xiaojin, head of the Fourth Procuratorial Office of the Supreme People’s Procuratorate (SPP), which is in charge of economic crimes, has vowed to ramp up a crackdown on financial crimes in the year ahead. He said efforts would be made to “provide strong rule-of-law guarantees to serve and safeguard high-quality financial development”. Targets would include illegal fundraising, loan fraud, money laundering, proscribed foreign exchange trading, as well as crimes related to the use of virtual currencies to transfer assets abroad. Prosecutors would also target crimes that damage the order of the capital market and the interests of listed companies, he told SPP’s affiliated media. Zhang said the crackdown would “provide strong support for accelerating the construction of a standardized, transparent, open, dynamic and resilient capital market”.
Crimes in the field of securities and futures “seriously undermine the basis for the operation of the capital market, infringe upon the legitimate rights and interests of investors, and endanger economic and financial security”, he said. According to Zhang, financial fraud, misappropriation of listed companies’ assets, insider trading and market manipulation will all be on prosecutors’ list of targets. Last year, the Communist Party became the country’s top financial regulator, with the establishment of the Central Financial Commission. President Xi Jinping also stressed the importance of preventing systemic financial risks during a high-level meeting last month at the Central Party School in Beijing, attended by dozens of provincial leaders. Xi said “financial regulation must have teeth” and pledged further moves against corruption, noting that “in the process of risk management, corruption must be resolutely punished and moral hazard must be strictly prevented”. At the central finance work conference in late October – the twice-a-decade policymaking gathering – Xi said that preventing and resolving financial risks must be an “eternal theme” for the Chinese government. The Supreme People’s Procuratorate issued a guideline in December noting its duties in relation to tackling and preventing financial crimes.
China is also dealing with an ailing stock market, prompting Premier Li Qiang to convene a cabinet meeting last month to discuss ways of reviving sentiment and enticing long-term capital to put a floor under plunging share prices. “More vigorous and effective measures should be taken to stabilize the market and confidence,” the cabinet agreed, according to a statement released after the meeting. Vice Premier He Lifeng recently urged a nationwide teleconference of party officials from all regions to support listed firms, calling them a critical “micro-economic bedrock”. He said confidence, capital market stability and economic development must be promoted, and stressed the importance of high-quality development in the economy, the South China Morning Post reports.