Titans of Chinese Justice Vow Crackdown on Financial Crimes: Bolstering Market Stability

Intensifying Efforts Against Financial Crimes with the Supreme People’s Procuratorate (SPP)

Beijing — In a rare public announcement, Zhang Xiaojin, head of the Fourth Procuratorial Office of China’s top judicial body, the Supreme People’s Procuratorate (SPP), shared plans to significantly increase efforts against financial crimes. This comes as the Chinese government is seeking to strengthen regulatory oversight and reinforce market stability.

Cracking Down on Financial Criminals

According to Zhang, financial offenses such as illegal fundraising, loan fraud, money laundering, prohibited foreign exchange trading, virtual currency-related crimes, and activities damaging the capital market order or eroding the interests of listed companies will be under intense scrutiny. Offenses like securities and futures fraud, misappropriation of listed companies’ assets, insider trading, and market manipulation are also high on the radar.

Impact of Financial Crimes

These criminal activities, according to Zhang, harm the financial system by eroding investor confidence and jeopardizing economic and financial security.

China’s New Financial Regulatory Landscape

In 2021, the Chinese Communist Party (CCP) took charge of the country’s financial oversight with the establishment of the Central Financial Commission. This development signifies an emphasis on tightening sectoral supervision amid an increasingly emphasized need for risk management.

Role of the Chinese Communist Party (CCP)

At a high-level party meeting last month, Chinese President Xi Jinping emphasized the importance of an effective and robust regulatory presence to address corruption and moral hazard during risk management processes. Xi maintained that combating and preventing financial risks is an “eternal theme” for the Chinese government.

SPP’s Role in the Prevention and Resolution of Financial Crimes

In December 2021, the SPP launched a guideline outlining its role in the prevention and resolution of financial crimes.

Addressing Market volatility

In response to a plunging stock market, Premier Li Qiang convened a cabinet meeting to discuss invigorating market sentiment and attracting long-term capital to stabilize share prices. Vice-Premier He Lifeng recognized the importance of listed firms as a crucial economic foundation and urged officials to boost confidence, promote capital market stability, and prioritize high-quality economic development.