• I saw a report on Douyin about an anti-corruption investigation in the Zhejiang financial sector. I had written about the prelude to financial corruption once before, but didn’t follow up on related reports afterward.
• I still check financial news every day, and previously I rarely saw any reports about financial corruption. However, there have been increasing reports of financial corruption over the past two years, with more and more senior executives from banks, securities firms, and other financial institutions being investigated. Financial Anti-Corruption Curtain Rise

The recent systemic anti-corruption storm in the Zhejiang financial sector is one of the most iconic events in China’s financial field in recent years. This anti-corruption campaign, which began in 2023, centered around the collective downfall of the former presidents of Zhejiang branches of four major state-owned banks, exposing long-standing issues of power abuse and collusion between government and businesses within local financial systems. The following outlines the event timeline, core problems, underlying causes, and subsequent impacts from four dimensions:

I. Event Timeline: From the Zhu Xiaoyu Case to the Collapse of the “Gang Leaders” of the Four Major Banks

1. The Spark: The Zhu Xiaoyu Case Unearths a Rotten Financial System Case
2. In May 2023, Zhejiang Provincial Vice Governor Zhu Xiaoyu was investigated, and his corrupt pattern of “eating off finance” became a breakthrough point. During his tenure, he obtained massive profits through interfering in corporate IPOs and loans, and formed an alliance of interests with financial institution executives. In November 2023, Zhu Xiaoyu was expelled from the Communist Party and public office, and the numerous clues provided during the investigation directly triggered subsequent seismic events within the financial system.
3. Anti-Corruption Storm Intensifies: Original Heads of Zhejiang Branches of the Four Major Banks Fall
   • April 2024: Guo XinGang, the former Chairman of the China Bank’s Zhejiang Branch, was investigated. After retiring, he made money through low-priced property purchases and equity premiums, abusing his authority in mineral loan approvals, resulting in significant losses of state assets.
   • April 2025: Gao Qiang, the former Chairman of the Construction Bank’s Zhejiang Branch, was investigated. During his tenure, he illegally approved loans leading to multiple projects going bankrupt and receiving “consulting fees” exceeding tens of millions of yuan.
   • May 2025: Feng Jianlong, the former Chairman of the Agricultural Bank’s Zhejiang Branch, voluntarily confessed, and during his tenure, he transformed the Zhejiang branch of the Agricultural Bank into a “family industrial business,” with relatives holding illegal positions and serious misconduct.
   • May 30, 2025: Shen Rongqin, the former Chairman of ICBC’s Zhejiang Branch, was investigated. After retiring, he controlled institutions such as Changtang River Jinran Academy through “political rotation,” forming a network of interests with eight private enterprises. Within 15 months, all the original heads of the four major banks’ Zhejiang branches fell, creating a closed-loop anti-corruption effort.

• Regulatory System Also Shakes
• In January 2025, Pan Guang’en, former Deputy Director of the Zhejiang Provincial Party Committee’s Financial Bureau, voluntarily confessed, using his privileged position to facilitate corporate equity reforms and investments, illegally receiving massive amounts of money. This marked a shift in the anti-corruption campaign from financial institutions to regulatory departments, revealing the deep entanglement of the “regulatory-financial institution-private enterprise” three-party interest chain.

II. Core Issues: Credit Corruption and Rotating Door Interest Chains

1. Misappropriation of Lending Power: The Core Tool of Corruption
2. All four former heads of the major banks utilized their lending power to transfer interests: Guo XinGang violated regulations by issuing mineral loans, Gao Qiang manipulated credit through “consulting fees,” Feng Jianlong’s family-style lending led to bad debts, and Shen Rongqin used the Golden Research Institute platform to channel funds to related enterprises. Data shows that 68% of individuals investigated within the banking system in 2024 were involved in illegal lending or loan approvals, highlighting a deeply concerning loss of control over lending power.
3. Rotational Corruption: Retirement is Not a Safe Deposit Box
4. All four individuals continued to wield power through “identity transformation” after retirement: Guo XinGang served as the president of an industry association to intervene in credit lending, Gao Qiang transitioned to a securities dealer director to manipulate capital, and Shen Rongqin established a “financial-academic-research” platform to connect with private enterprises. This “retire and continue” model allowed retired executives to evade regulation and form hidden interest chains. The 2024 Financial Anti-Corruption White Paper revealed that 68% of cases involved retired executives, with the Zhejiang case serving as a typical example.
5. Blurred Boundaries Between Government and Business: Interest Transfer from Banks to Private Enterprises
6. The Changtang River Golden Research Institute, led by Shen Rongqin, was established with investments from eight private enterprises including Zhentai and Chuanhua, ostensibly an academic institution but in reality a political-economic nexus. Through this platform, Shen Rongqin directed banking resources towards related enterprises, forming a “banking institution – private enterprise think tank” binding model. Similar models were also evident in the cases of Guo XinGang and Gao Qiang, exposing the deep distortion of political-economic relations within local financial ecosystems.

Three. Root Causes: Institutional Loopholes and Regulatory Failures

1. Long-Term Absence of Local Financial Regulation
2. As a major province for private economy, Zhejiang has been active in financial innovation, but the regulatory system hasn’t kept pace. Officials such as Zhu from Ju and Pan Guang’en have long dominated local financial policies, acting as both “athletes” and “referees,” leading to ineffective regulation. For example, during his tenure at the Financial Bureau, Pan Guang’en illegally interfered in corporate financing and share reform, but was not effectively restrained.
3. Failure of Internal Controls within Financial Institutions
4. The internal supervision mechanisms of the four major banks’ Zhejiang branches were essentially empty. When Feng Jianlong served as the chairman of Zhejiang Branch of Agricultural Bank, his relatives quickly rose through the system, and the “one-voice” credit approval phenomenon was prominent. Shen Rongqin’s “Employee Care Plan” ostensibly provided welfare, but actually consolidated power by controlling frontline employees to cover up corrupt behavior.
5. Weak External Supervision Mechanisms
6. The enabling of cross-provincial investigations (such as the Shen Rongqin case being handled by the Liaoning Provincial Supervisory Commission) demonstrated that local protectionism had severely hindered anti-corruption progress. Furthermore, the complex equity relationships between financial institutions and private enterprises (such as half of the top ten loan customers of Zhejiang Merchants Bank were real estate companies) made risk transmission hidden, making traditional regulatory measures difficult to penetrate.

Four. Subsequent Impacts: Regulatory Upgrading and Industry Restructuring

1. Normalization of Anti-Corruption and Systemic Plugging of Leaks

   • Cross-Provincial Supervision and Penetrating Regulation: The Central Commission for Discipline Inspection adopted remote case handling to cut through local protection networks, and extended the scope of scrutiny from on-duty behavior to interest chains after retirement.
   • Technological Anti-Corruption Implementation: Zhejiang piloted AI risk control models for credit approval, automatically identifying “people-based loans” and “political-business loans,” effectively curbing corruption at its source.
   • Restrictions on Departing Executives: Zhejiang Province is drafting the “List of Financial Executive Post-Employment Restrictions,” stipulating that bank chairpersons are prohibited from serving affiliated companies within three years after retirement, cutting off chains of power options.

2. Restructuring of the Financial Ecosystem

   • Systemic Risk Clearance in Banks: Institutions such as Zhejiang Business Bank and Hangzhou Bank were initiated internal restructuring due to the downfall of senior executives, and high real estate loan ratios (such as Zhejiang Business Bank’s real estate non-performing asset rate reaching 2.48%) forced business transformation.
   • Optimization of Financing Environment for Private Enterprises: Following anti-corruption actions, Zhejiang Province launched policies such as “Zheke Loan,” providing 450 billion yuan in loans to 32,000 technology SMEs in 2024, driving finance back to its original purpose of serving the real economy.

3. Social Warning Effect

   • The collective downfall of former branch managers of the four major banks in Zhejiang shattered the illusion of “safety after retirement,” conveying a signal of “zero tolerance and no blind spots” in financial anti-corruption. This event also provides a mirror for the entire Chinese financial system: only by strengthening power constraints and improving regulatory systems can we safeguard financial security.

Conclusion

The collapse of the Zhejiang financial circle was fundamentally a concentrated outburst of long-term loss of control over local financial power. This storm not only cleared out a number of “financial pests,” but also drove profound changes in regulatory models, institutional design, and industry ecosystems. In the future, how to balance financial innovation with risk management, and how to build “clean” government-business relationships will continue to be subjects of ongoing exploration for Zhejiang and even the entire Chinese financial sector.