Former Chinese central bank chief 'helping graft probe': Report

2015-04-09

Former Chinese central bank governor Dai Xianglong, April, 2014. Xinhua via AFP.

Reports that former central bank chief Dai Xianglong is being investigated by the ruling Chinese Communist Party's graft-busting body are credible, but it is too early to say how the probe will develop, analysts told RFA.

Dai, who headed the People's Bank of China (PBoC) from 1995-2002, is cooperating with investigators from the party's Central Commission for Discipline Inspection (CCDI) and has not been accused of wrongdoing, Bloomberg News quoted unnamed sources as saying.

The investigation will take in Dai's actions during his governorship of the PBoC, as well as his term as mayor of the northern port city of Tianjin and his leadership of a national social security fund, which ended in 2013, the report said.

Dai had a reputation for strong leadership at the helm of the PBoC during the 1997 Asian financial crisis, and is credited with implementing sweeping reforms to China's state-owned banks, then seen as relics of the command economy.

Dai allowed massive state-run banks to hive off their bad debts into separate asset management companies, before listing them on the Hong Kong stock exchange.

Wu Kegang, chief China adviser to the British Chamber of Commerce, said it is too early to judge whether Dai will prove to be the next "tiger" netted in President Xi Jinping's nationwide anti-corruption drive, although questions remain over the listing of state insurance giant Ping'an.

"If there were secret dealings going on there, then of course these should be investigated," Wu said. "It should be possible to get to the bottom of it."

Beijing-based lawyer Xie Yanyi said Xi's entire anti-graft campaign, in which he vowed to go after high-ranking "tigers" and low-ranking "flies" alike, has been revealed gradually via rumors and unconfirmed media reports.

"There's an online joke that say that rumors are actually the first sign of what is to come," Xie said. "A rumor that is eventually confirmed becomes the truth; becomes a fact."

No transparency

Xie said corrupt officials are themselves the victims of a dictatorial regime with no transparency.

"In a situation where the last shreds of humanity are corrupted, they lose themselves," he said. "They are completely swallowed up by the dictatorship."

"Dai Xianglong is a technocrat from a specialist background and a member of the elite," Xie said. "There is nothing that he doesn't understand, whether it be finance or the law."

According to Wu, corruption isn't necessarily an indicator of total incompetence in China.

"You have to distinguish carefully between high-ranking officials accused of corruption," he said. "They may have been corrupt, but they still achieved some good things."

But Xie said the current campaign is incapable of solving the problem at its roots.

"The only way to eradicate it is to take the peaceful path towards democratisation," Xie said. "Power needs to be curbed, and that's the only way to fight corruption."

"They wouldn't need these strong-arm corruption campaigns if they set up a clean political system in the first place," he said.

Critics have said Xi's anti-corruption campaign, launched after he came to power in November 2012, is highly selective, and is widely seen as a form of political purge, with the president's allies protected from exposure.

Beijing in February ordered a probe into deaths of its officials from "unnatural causes" following a rise in the number of reported suicides among them, which some attributed to strong-arm tactics used by party graft investigators.

Government departments and agencies have been ordered to compile data on deaths, including place, circumstances, and apparent causes of death, as the number of apparent suicides in officialdom rises.

Reported by Yang Jiadai for RFA's Mandarin Service. Translated and written in English by Luisetta Mudie.

Link to original story on RFA website