Beijing: China's financial sector is facing an unprecedented exodus of top executives, with over a thousand senior leaders resigning in the past month alone. The wave of departures includes chairmen, presidents, vice presidents, and other high-ranking officials from A-share listed companies, banks, insurance firms, and state-owned enterprises. Citing personal reasons, these resignations come amid an intensified government crackdown on the industry, sparking concerns about financial stability and growing political risks.

The mass resignations follow the abrupt exit of Liu Jin, vice chairman and president of the Bank of China, in late August. According to Chinese state media, the resignations reflect growing unease within the industry as Beijing tightens its grip on the financial sector. By mid-September, at least 67 senior finance officials had been investigated, disciplined, or expelled from the Chinese Communist Party (CCP) this year, according to the Central Commission for Discipline Inspection.

Experts believe that the mass resignations indicate a declining confidence in the economy. Du Wen, a former Chinese official, and economist Li Hengqing point out that these senior executives, many of whom are deeply embedded in the CCP, are anticipating increased political risks as the crackdown escalates. However, resignations in such high-ranking positions require CCP approval, making these departures highly significant.

Government Reluctance to Approve Resignations
Despite the wave of resignations, sources suggest that the central authorities are reluctant to approve many of them due to fears of destabilizing the financial system. Financial leaders reportedly face pressure to remain in their roles, exposing them to the risks of interrogation or worse, as part of ongoing financial investigations. Experts warn that these probes could result in severe legal and political repercussions, including purges.

Investment bankers are particularly vulnerable, as they possess insider knowledge of the financial system’s weaknesses, including bad debts, falsified accounts, and manipulated audits. To prevent any leaks of sensitive information, the CCP has implemented strict measures, including requiring some executives to surrender their passports and restricting their ability to travel abroad. Several firms have also suspended resignation reviews, effectively trapping executives in their current roles.

One financial leader described the sector as an "unfriendly environment" experiencing one of its worst cycles, with significant "uncertainty about the future." This growing climate of fear and instability has been exacerbated by the government's relentless anti-corruption campaign, targeting financial professionals and executives in state-owned enterprises.

Anti-Corruption Campaign Sweeps Financial Sector
The CCP’s crackdown on corruption in the financial sector has intensified in recent months, with high-profile punishments meted out to executives involved in bribery and insider trading. One of the most notable cases involved Tian Huiyu, the former president of China Merchants Bank Co., who received a suspended death sentence in February. Tian was convicted of bribery and insider trading and was expelled from the CCP, with all his personal property confiscated.

In another case, a former deputy general manager of Haitong Securities attempted to flee China in July but was captured and deported back the following month. His case was highlighted by Chinese state media as part of Beijing’s "Skynet" operation, aimed at capturing corrupt officials who attempt to escape abroad.

Financial Sector Under Pressure
The financial system, once the backbone of China’s economic rise, is now under immense pressure due to a combination of factors, including massive local debt, property market instability, shadow banking, and repayment crises. Experts warn that high-income earners in leadership positions are especially vulnerable, with many fearing they will be scapegoated as the financial market teeters on the edge of collapse.

Economist David Huang compared the situation to "a volcano on the brink of eruption," with executives eager to distance themselves from the sector before it implodes. Despite the CCP’s efforts to retain these leaders, the growing unrest among financial professionals reflects deeper concerns about the health of China’s economy.

China’s stock market continues to slide, with the CSI 300 Index plummeting to a record low of 3,159.92 in mid-September, down significantly from its peak of 5,807.72 in February 2021. This decline highlights the broader challenges facing China’s economy as it grapples with the fallout from the COVID-19 pandemic and strict government-imposed quarantine measures.

As Beijing intensifies its crackdown on the financial sector, the mass resignations of senior leaders signal mounting uncertainty and instability, raising questions about the future of China’s financial institutions.