The financial family behind the “clean reformers”: how Zhuangqi died, and how the equity capital grew along with China’s marketization

On August 12, the Central Committee of the Communist Party of China, the Standing Committee of the National People's Congress, the State Council, and the National Political Council issued an announcement announcing that Zhuangki died in Beijing at 11:06 p.m. on the same day, aged 98.The official assessment focused on reform, economic governance and Communist Party political loyalty; and overseas media discussed the political heritage of state-owned enterprise reform, joining the World Trade Organization and large-scale departure.

However, bringing Zhuongki back to China’s political and economic environment in the 1990s by merely discussing whether he is a “reformist prime minister” misses one of the most important clues of power in the market: China’s market has expanded, and the Communist Party has not withdrawn control of political power, state-owned capital, banks and key economic resources.

In 1998, Zhu Yuen became the prime minister of the State Council, China entered the reorganization of state-owned enterprises, financial reform, large state-owned enterprises listed within and outside the country and joined the WTO during the crucial period. In the same year, his son Zhu Yuen entered China International Finance Co., Ltd. Zhu Yuen worked in China for 16 years, and was in the company's top management for a long time. Zhu Yuen's daughter Zhu Yuen also served in the Chinese banking system for a long time, and later entered the management of China Bank Hong Kong.

As one of China’s earliest Chinese-foreign joint investment banks, China is deeply involved in the listing, financing and capital operations of large state-owned enterprises.In other words, during the years of the State Council’s economic and financial reform, Zhu Jingxi’s son entered the core capital platform created by this reform.

This is not a private issue that can simply be attributed to the “freedom of choice of a leader’s children.” Direct relatives of the highest economic decision makers enter financial institutions that are highly related to their policy power and are typically subject to public interest and conflict of interest scrutiny.

China has not yet opened up the family property obligatory system for senior leadership cadres to the public, the highest level of family business interests, asset structure and associated relations have long been in a highly closed state. disciplinary supervision, justice, financial supervision and cadres management system are all under the leadership of the Communist Party.

The other side of the Zhuangki era was the departure of tens of millions of state-owned employees and the restructuring of the employment system.Market reform requires ordinary workers to lose their original unit guarantees and face employment competition and social security transformation; at the same time, the next generation of Chinese political elite families are increasingly entering finance, investment, large enterprises and capital markets.

This constitutes one of China’s deepest market inequalities: ordinary people bear the cost of market competition, and political groups that control the allocation of national resources do not simultaneously accept political competition and social supervision.

Zhuangqi, of course, pushed for real and profound economic reforms in China, but such reforms never touched the Communist Party’s monopoly on the highest political power. Banks can be commercialized, capital markets can expand, can go bankrupt, workers can leave, the ruling party cannot be voted out, and the family interests of senior cadres do not need to be subjected to continuous inspection by independent media and judicial organs.

In the era of traditional planned economy, the privileges of the administrative level have gained new realization channels after marketization: financial positions, investment platforms, corporate equity, business networks and capital markets can all become new spaces for the conversion of political resources into economic resources.

After Mr. Zhuangki’s death, the Chinese Communist Party could continue to commemorate a “reformer” and a “clean prime minister”, but Chinese society still did not get the institutional right to open the highest-powered household wealth book.

Therefore, the historical questions left by Zhu Yongki go far beyond the reform of state-owned enterprises and the WTO, and it is more questionable: why has China achieved such a massive marketization of the economy without establishing a system of public oversight that can cut the link between political power and family capital?

When a regime holds both power and the ultimate interpretation of judging whether power is clean, “clean” is no longer just a matter of personal character, but a question of whether the whole system allows social verification.