The Fate OF A Former Top Banker In Communist China Unfolded

Translation: Rosa

Editor: XO酱

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Due to the long delay in releasing its annual reports, China Huarong Asset Management, the largest state-owned asset management firm in Communist China, pushed the cost of hedging against the risk of default on the Chinese dollar-denominated debt to the highest level since last October, according to the Reuter. 

The Background of Huarong 

China Huarong Asset Management Co., founded in 1999, played a vital role as a “safety net” and “stabilizer” of China’s economy, with an astonishing track record of doubling its turnover for three consecutive years from 2009 to 2012.

Huarong started to struggle with financial difficulties since the aftermath of the 1998 Asian financial crisis, exposing a staggering amount of bad debt owned by four CCP-owned major banks – ICBC, CCBC, ABC, and BOC. The CCP used its centralized state power to bail out the four major banks by setting up four major asset management companies [AMCs] – Huarong, Great Wall, Dongfang and Cinda – to take over the bad debts of these four banks, totaling 1.4 trillion yuan. Huarong since then became the world’s largest bank in terms of market capitalization after taking over the bad debts of ICBC.

In the US, the operating cycle of such AMCs is usually 8-10 years. However, the CCP allowed the continuous snowballing of bad debts of these four AMCs – with its untouchable ruling power in China – after the end of their normal operation cycles, in exchange for quick cash for CCP’s interest groups while transferring the debts to the most diligent and hardworking Chinese people.  

China Huarong reached its peak on October 30, 2015 after being successfully listed on the main board of the Hong Kong Stock Exchange. In 2017, Huarong established Taiwan Huarong Industrial Corporation in Taiwan.

The man behind Huarong

No one will question that Lai Xiaomin is to be credited for pushing Huarong to the front seat of CCP’s AMCs. In 2009-2010, Huarong achieved net profits of RMB 821 million and RMB 2.020 billion respectively, up 103% and 146% year-on-year. In the following ten years, Huarong has been making consistent progress. After occupying the front seat of China’s AMCs, the myths about Lai Xiaomin were endless.

On April 17, 2018, he was announced to be “double-regulated”- meaning he went under interrogations from both CCP’s Discipline Inspection Commission and China’s government administrative supervision organizations, subjecting Lai to the harshest charges CCP usually issues to its party members. On January 5, 2021, following a trial that lasted nearly 3 years, Lai was sentenced to death for bribery, embezzlement and bigamy, and was executed on January 29, merely 24 days after his sentencing.

Lai’s quick execution stirred up many different opinions among Chinese civilian, as he was by no means the most corrupt and bribe-taking person. The unusual nature of the case has generated a series of conspiracy theories.


After Xi Jinping took the throne of CCP, he started a killing spree, under the name of anti-corruption, to consolidate his power within the party, toppling over multiple key dissidents within the party, putting himself at the absolute center of the CCP, and breaking the long-established political balance within the party. 

Huarong, a mega CCP-owned enterprise that has gone through the complete cycle of China’s capital market frenzy, held too many accounts of dirty business of the CCP.

From this perspective, Lai’s quick death seems self-explanatory – either he has come clean about everything, which made him nothing but a liability to the CCP; or he simply kept too many secrets that the CCP cannot afford to make public.

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