Xi's Party Influence In China's Finance.pdf

Xi Jinping's report to the 20th Party Congress emphasizes strengthening party organs across all sectors, including the financial sector. The finance sector is at the forefront of forging new roles for the party in economic governance, using state-of-the-art regulatory approaches and party networks. The one million plus Chinese Communist Party members in the finance sector are instructed to align banking business with Xi Jinping's political commandments. Discipline inspectors, who triggered more impactful political activity among party members in banks after the 2015 stock market volatility, now have a broad mandate to enforce a new discourse. Bankers must vow their commitment to follow the CCP's guidance in everyday operations, submitting to the party's open-ended authority. Inspections also enforce formal institutional change, revising corporate charters to enshrine the party committee's prerogative to deliberate crucial decisions. Party and business hierarchies are aligned, and career evaluation systems build in new incentives for bankers to distinguish themselves through innovative party-building projects. Inspections enforce politicised credit allocations, supporting Xi's anti-poverty campaign and investing in the real economy. State-owned banks lead the way in politisation, but private firms in the finance sector are also targeted. Foreign companies must know how to deal with pressure to engage in party-building, and governments could help by identifying and disseminating best practices.