Welcome to Balance of Power, bringing you the latest in global politics. If you haven't yet, sign up here. President Xi Jinping's crackdown on private enterprise and push for "common prosperity" has rattled China's business elite. Perhaps no more so than at China International Capital Corp., the nation's premier investment bank. The poster child for much of the past three decades of Beijing's ambitions in global finance is facing a bitter struggle. Top bankers have seen their pay slashed by as much as 25% and most bonuses have been close to zero. The group's international business has dried up, forcing it to scale back its global aspirations and focus on domestic markets. Its once bustling investment banking floors in the capital are now largely empty after 6 p.m. As Xi has tightened control, the firm's previously high-flying dealmakers are racing to adapt to the new reality. More than 30% of the top bankers are now party members, a move seen as one of the key drivers to getting ahead, instead of snaring deals and new clients. This has sapped both morale and productivity, according to insiders. More broadly, the whole finance industry is in upheaval with pay falling across the board. The nation's largest financial conglomerates have asked senior staff to forgo deferred bonuses and in some cases even return pay. On top of this is a prolonged anti-corruption drive that has ensnared more than 100 officials and regulators. The focus in Beijing is to curb excesses and steer capital toward more productive areas of the economy, rather than into the pockets of bankers. It remains to be seen what broader impact it will have on China and its economy. And if there will be any blowback on Xi. — Jonas O Bergman |
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