Fang Xinghai probe signals shrinking space for market reformers

Former CSRC vice chairman blocked from World Bank exit

Beijing’s purge of Communist Party officials has ensnared a former star securities regulator nearly two years after he retired, as the party investigates Fang Xinghai, the Stanford-trained economist whom foreign investors long regarded as one of the few senior Chinese officials capable of calmly explaining and defending Beijing’s handling of its markets.

Fang, who stepped down as vice chairman of the China Securities Regulatory Commission in 2024, has been put under investigation by the party’s Central Commission for Discipline Inspection for suspected “serious violations of discipline and law,” the agency said in a statement Friday, according to The Wall Street Journal. The nature of the allegations against Fang could not be determined, but the public announcement of the probe indicates he is in serious trouble, the Journal reported.

The move against Fang was preceded by warning signs, according to people familiar with the matter. Over the past couple of years, Fang had sought to leave China for a senior position at the World Bank in Washington, the people said. His application was blocked last year by the party’s Organization Department, the opaque personnel body that vets and approves postings for senior officials and is considered one of the most powerful instruments of Xi Jinping’s control over the Chinese bureaucracy.

Around the same time as the denial, Fang was ordered to submit a detailed written account of his entire career to party personnel officials, the people said — a process sometimes reserved for officials already under a cloud.

MSI previously reported that Xi Jinping’s anti-corruption campaign punished nearly a million people in 2025, the highest annual figure on record, and widened from graft to target political disloyalty and other offenses (Xi Jinping’s corruption purge hits record as offenses widen to political loyalty).

Fang was well-known to investors and regulators around the world. In February, he traveled to New York as part of an official Chinese government delegation. He counts former central-bank governor Zhou Xiaochuan as a mentor and built his career on the premise that China’s financial system needed to open up, not wall itself off, to grow.

As a Shanghai official in the early 2010s, Fang helped design a pilot program allowing foreign private-equity firms to raise yuan-denominated funds in the city. He later worked under Liu He, then Xi’s top economic adviser who negotiated a trade deal with the first Trump administration in 2019. Fang also helped set financial policy while working as a securities regulator.

“He knows how markets work,” an official at the securities regulator told the Journal about Fang’s appointment to the agency in 2015.

The kind of credibility Fang carried has become increasingly rare and increasingly unwelcome in Xi’s China, the Journal reported. Over the past several years, a string of officials associated with market-friendly, technocratic policymaking have been purged, sidelined, or subjected to opaque corruption investigations, part of a broader consolidation of economic decision-making power around Xi and his most loyal lieutenants.

As previously covered by MSI, the party’s anti-corruption apparatus this year has also investigated Ouyang Weimin, a former president of the China Development Bank, and former Xinjiang party chief Ma Xingrui (Ouyang Weimin placed under investigation by China’s top anti-graft watchdog; China investigates former Xinjiang party chief Ma Xingrui). Yi Huiman, Fang’s former predecessor as CSRC chairman, was expelled from the Communist Party and public office in April 2026, and another former vice chairman, Zhang Yujun, was previously investigated for suspected serious disciplinary violations. A former CSRC vice chairman, Fang was one of the few high-ranking financial regulators who had not been targeted until now.

The pattern has left foreign investors with few interlocutors in Beijing who can speak convincingly about how the country’s financial system actually functions, the Journal reported, and has fed a broader unease about whether technical competence still counts for much in a system increasingly organized around political loyalty.

Fang’s previously planned exit for an international posting, and Beijing’s refusal to let him go, underscore a related anxiety inside the party, some officials told the Journal: that its own most capable economic officials might prefer to work anywhere but home. Fang has now disappeared from public view.