{"id":151573,"date":"2024-10-11T00:06:23","date_gmt":"2024-10-11T00:06:23","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/10\/11\/how-xis-crackdown-turned-chinas-finance-high-flyers-into-rats\/"},"modified":"2024-10-11T00:06:23","modified_gmt":"2024-10-11T00:06:23","slug":"how-xis-crackdown-turned-chinas-finance-high-flyers-into-rats","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/10\/11\/how-xis-crackdown-turned-chinas-finance-high-flyers-into-rats\/","title":{"rendered":"How Xi\u2019s crackdown turned China\u2019s finance high-flyers into \u2018rats\u2019"},"content":{"rendered":"
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\"GettyGetty Images<\/span><\/div>\n<\/div>\n

China has cracked down on businesses including real estate, technology and finance<\/figcaption><\/p>\n<\/figure>\n
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\u201cNow I think about it, I definitely chose the wrong industry.\u201d<\/p>\n

Xiao Chen*, who works in a private equity firm in China\u2019s financial hub, Shanghai, says he is having a rough year.<\/p>\n

For his first year in the job, he says he was paid almost 750,000 yuan ($106,200; \u00a381,200). He was sure he would soon hit the million-yuan mark.<\/p>\n

Three years on, he is earning half of what he made back then. His pay was frozen last year, and an annual bonus, which had been a big part of his income, vanished.<\/p>\n

The \u201cglow\u201d of the industry has worn off, he says. It had once made him \u201cfeel fancy\u201d. Now, he is just a \u201cfinance rat\u201d, as he and his peers are mockingly called online.<\/p>\n

China\u2019s once-thriving economy, which encouraged aspiration, is now sluggish. The country\u2019s leader, Xi Jinping, has become wary of personal wealth and the challenges of widening inequality.<\/p>\n

Crackdowns on billionaires and businesses, from real estate to technology to finance, have been accompanied by socialist-style messaging on enduring hardship and striving for China\u2019s prosperity. Even celebrities have been told to show off less online. <\/p>\n

Loyalty to the Communist Party and country, people are told, now trumps the personal ambition that had transformed Chinese society in the last few decades.<\/p>\n<\/div>\n

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Mr Chen’s swanky lifestyle has certainly felt the pinch from this U-turn. He traded a holiday in Europe for a cheaper option: South East Asia. And he says he \u201cwouldn\u2019t even think about\u201d buying again from luxury brands like \u201cBurberry or Louis Vuitton\u201d.<\/p>\n

But at least ordinary workers like him are less likely to find themselves in trouble with the law. Dozens of finance officials and banking bosses have been detained, including the former chairman of the Bank of China<\/a>.<\/p>\n

The industry is under pressure. While few companies have publicly admitted it, pay cuts in banking and investment firms are a hot topic on Chinese social media.<\/p>\n

Posts about falling salaries have generated millions of views in recent months. And hashtags like \u201cchanging career from finance\u201d and \u201cquitting finance\u201d have gained more than two million views on the popular social media platform Xiaohongshu.<\/p>\n

Some finance workers have been seeing their income shrink since the start of the pandemic but many see one viral social media post as a turning point.<\/p>\n

In July 2022, a Xiaohongshu user sparked outrage after boasting about her 29-year-old husband\u2019s 82,500-yuan monthly pay at top financial services company, China International Capital Corporation.<\/p>\n

People were stunned by the huge gap between what a finance worker was getting paid and their own wages. The average monthly salary in the country’s richest city, Shanghai, was just over 12,000 yuan.<\/p>\n

It reignited a debate about incomes in the industry that had been started by another salary-flaunting online user earlier that year.<\/p>\n

Those posts came just months after Xi called for \u201ccommon prosperity\u201d – a policy to narrow the growing wealth gap.<\/p>\n

In August 2022, China\u2019s finance ministry published new rules requiring firms to \u201coptimise the internal income distribution and scientifically design the salary system\u201d.<\/p>\n

The following year, the country’s top corruption watchdog criticised the ideas of \u201cfinance elites\u201d and the \u201conly money matters\u201d approach, making finance a clearer target for the country\u2019s ongoing anti-corruption campaign.<\/p>\n<\/div>\n

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\"GettyGetty Images<\/span><\/div>\n<\/div>\n

Shanghai is a financial hub and China’s richest city<\/figcaption><\/p>\n<\/figure>\n
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The changes came in a sweeping but discreet way, according to Alex*, a manager at a state-controlled bank in China\u2019s capital, Beijing.<\/p>\n

\u201cYou would not see the order put into written words – even if there is [an official] document it\u2019s certainly not for people on our level to see. But everyone knows there is a cap on it [salaries] now. We just don\u2019t know how much the cap is.\u201d<\/p>\n

Alex says employers are also struggling to deal with the pace of the crackdown: \u201cIn many banks, the orders could change unexpectedly fast.\u201d<\/p>\n

\u201cThey would issue the annual guidance in February, and by June or July, they would realise that the payment of salaries has exceeded the requirement. They then would come up with ways to set up performance goals to deduct people\u2019s pay.\u201d<\/p>\n

Mr Chen says his workload has shrunk significantly as the number of companies launching shares on the stock market has fallen. Foreign investment has decreased in China, and domestic businesses have also turned cautious – because of the crackdowns and weak consumption.<\/p>\n

In the past his work often involved new projects that would bring money into his firm. Now his days are mostly filled with chores like organising the data from his previous projects.<\/p>\n

\u201cThe morale of the team has been very low, the discussion behind the bosses backs are mostly negative. People are talking what to do in three to five years.\u201d<\/p>\n

It\u2019s hard to estimate if people are leaving the industry in large numbers, although there have been some layoffs. Jobs are also scarce in China now, so even a lower-paying finance job is still worth keeping.<\/p>\n

But the frustration is evident. A user on Xiaohongshu compared switching jobs to changing seats – except, he wrote, \u201cif you stand up you might find your seat is gone.\u201d<\/p>\n

Mr Chen says that it’s not just the authorities that have fallen out of love with finance workers, it’s Chinese society in general.<\/p>\n

\u201cWe are no longer wanted even for a blind date. You would be told not to go once they hear you work in finance.\u201d<\/p>\n

*The names of the finance workers have been changed to protect their identities.<\/i><\/p>\n<\/div>\n<\/div>\n


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Getty Images China has cracked down on businesses including real estate, technology and finance \u201cNow I think about it, I definitely chose the wrong industry.\u201d Xiao Chen*, who works in a private equity firm in China\u2019s financial hub, Shanghai, says he is having a rough year. For his first year in the job, he says […]<\/p>\n","protected":false},"author":2,"featured_media":151574,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/www.bbc.com\/bbcx\/grey-placeholder.png","fifu_image_alt":"","footnotes":""},"categories":[604],"tags":[7940,1343,1934,119533,26249,11156,9853],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/151573"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=151573"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/151573\/revisions"}],"predecessor-version":[{"id":151575,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/151573\/revisions\/151575"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/151574"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=151573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=151573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=151573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}