“Crocodiles”, “traitors” and “scarecrows” are the new creatures lurking in China’s corridors of power, the financial one in particular . President Xi Jinping has reportedly lashed out against these three types during the Communist Party’s sixth plenary meeting last October. He didn’t elaborate, but any veteran observer of Chinese business or politics will know who they are. The “crocodiles”are the top families of China’s political elites, and their consigliere making the big bucks in the financial market via manipulation and inside information. The “traitors” are those cadres and bureaucrats planted over the past decades among the country’s regulatory agencies, bank and brokerages by elite families to facilitate their businesses, and tip them off when things go awry. The “scarecrows” are the regulators who have turned a blind eye to malfeasance, whether due to sheer incompetence or fear. Xi has vowed to remove them all, for the sake of the country’s financial stability and integrity, according to a report by Oriental News . Whether Xi really said that can never be proven. Yet, what we have been seeing since January is clearly a consolidation of his control over the financial markets, if not a declaration of war against the financial kinfolks. To understand all this, we need to go back to China’s stock market crash in the summer of 2015, which significantly set back Xi’s economic plan, and more importantly, weakened his credibility. It may be a bit far-fetched to suggest that the crash was orchestrated to undermine Xi’s authority during its zenith, following his bold crackdown on corruption and the successful launch of the Asian Infrastructure Investment Bank. However, the duration and magnitude of the turbulence was shocking. Beginning on June 12, the Shanghai A Share Index had plunged 32 per cent by July 8, wiping out trillions of yuan in market value, and destroying the wealth of millions of investors. The clumsiness of the authorities in responding was alarming. The China Securities Regulatory Commission (CSRC) fought a lone battle for more than two weeks. The Ministry of Finance, the central bank, the bank regulator and the insurance watchdog didn’t chip in with money and policies until July 4 that year. The meltdown was stopped on July 9 when Xi sent in the police to investigate “malicious operation”. Confidence in Xi’s governance and the market was at a new low then. It was against this backdrop that China ventured into a further liberalisation of its currency. The result was a deep devaluation of the yuan, capital flight and then panic moves by Beijing to stop the exodus. Whether plainly disloyal or just incompetent, the big boys in the financial markets deserve a good spanking. Graft investigators were sent into the regulators, brokerage houses and banks. Citic Securities, a unit of China’s first global conglomerate controlled by the family that personified the term “Red Capitalists”, saw most of its leadership gone amid allegations of economic crimes. The CSRC lost at least two of its top officials. Major reshuffles, however, did not happen until the army’s reform was done. In early 2016, Xi handpicked Liu Shiyu to head the CSRC following another market crash. In October, Liu declared his zero tolerance for “financial crocs that feasted on people’s blood”. This line was soon echoed by the insurance regulator, Xian Junbo, who until late 2016 had been a big supporter of lax controls on high-risk and high-yielding financial products, including insurers’ investments in the stock market. From this primal pool, a multibillion-yuan industry of well-connected insurers sprouted, selling high-yield policies that became cash-printing machines for financing their owners’ shopping sprees in real estate, outsize acquisitions and corporate raids. On the eve of the recent Lunar New Year, mainland Chinese investigators arrived at the Four Seasons Hotel in Hong Kong to seize billionaire Xiao Jianhua. Xiao has strong links with several top princelings. Through well-placed leaks, it was known that Xiao’s misadventure had to do with the 2015 crash. Last month, veteran regulator Shang Fulin lost his chairmanship at the China Banking Regulatory Commission to former central banker Guo Shuqing. Shang held the job for six years after heading CSRC for almost a decade. Another discarded financial veteran is the globally renowned finance minister Lou Jiwei. He was replaced by a relative unknown from the ministry, Xiao Jie. Over the past two weeks, the newcomers have all sung to Xi’s tune of guarding against financial risk during the annual horse-and-pony show, otherwise known as the meeting of China’s parliament, in Beijing. The Chinese central bank governor Zhou Xiaochuan has yet to be touched. Zhou, who turned 69 in January, has been central bank chief since 2002, and his retirement is widely expected this year. Whether these reshuffles can consolidate Xi’s grip in the world of money remains to be seen. After all, it takes decades to groom financial talent. Compared to the deep roots of the financial kinfolks, Xi’s list of lieutenants with the required expertise is rather short. Case in point: Xi has made little progress in the decade-long push by China’s government to create a so-called super regulator to corral and lead the disparate and scattered financial segments of securities, banking and insurance.