In China’s corridor of power, what has been said is never telling; what has not, is. The recent dismissal of the Chinese insurance regulator tells us that President Xi Jinping is more interested in getting a firm grip over the country’s financial industry than having a full blown war with the old power brokers of the Communist Party – at least for the moment. Here is what has been said. Xiang Junbo, who has been leading the insurance watchdog since 2011, was removed last week from his job as chairman of the China Insurance Regulatory Commission (CIRC). This is not a surprise to anybody who’s been watching China’s insurance industry. Rumour of him being under investigation had been circulating since February. Mainland media quickly associated his downfall with his days as chairman of the Agriculture Bank of China between 2007 and 2011. That remains the spin so far. What has taken China’s graft fighters so long to get their hands on Xiang? Xiang allegedly facilitated a 3.2 billion yuan (US$475 million) loan in 2010 to Beijing Zenith Holdings - a company controlled by several princelings. The money was used to build a prime office tower next to the nest-like Olympic Stadium in Beijing, known affectionately as the Bird’s Nest. That sounds really bad. The puzzle is Zenith had been a subject of investigation, and the princelings in police custody for more than two years. Back in 2015, mainland magazine Caixin exposed Zenith’s secretive operation, questioning its acquisition of a prime site next to the stadium. What has taken China’s graft fighters so long to get their hands on Xiang? Now, here is what has not been said. None of Xiang’s role in the building of “cash machines” for political heavyweights was mentioned by any of the mainland media. China’s insurance regulator chimes in with war of words on illicit funds He has granted life insurance licenses to people with no relevant credentials, but who enjoy close ties to the families of China’s top leaders, past and present. He has allowed these insurers to sell so-called universal insurance products, which are in fact high-yielding investment schemes with guaranteed returns, but close to zero insurance elements. He relaxed the cap on universal insurance amidst growing media criticism, causing 1.2 trillion yuan to flow into the insurers’ pocket in 2016. He encouraged the money to be reinvested in the stock market without much regulatory oversight. More than 120 listed companies were scooped up by insurers. The well-connected and knowledgeable businessman Xiao Jiahua, who was escorted away from Hong Kong into China in February, would have helped in joining the dots in all these operations. He has been said to be very cooperative. Yet, none of Xiang’s regulatory days had been mentioned, because the very mention of it would drag in too many fat cats. The Zenith case is more focused and therefore convenient. One has to pick one’s fights. What Xi needs now is to put in place his own men in key watchdog positions; getting them familiarised with the game, and guarding his leadership from another financial turmoil like the one that broke out in the summer of 2015. The fat cats have lost three of the four top regulatory posts covering securities, banking and insurance in recent months while the last one – the central banker Zhou Xiaochun – is scheduled to retire soon. Their cash machines have also been suspended following a countrywide ban of universal insurance products. These would be sufficient in checking their clout. An all-out battle does not appear to be Xi’s priority. With top level political reshuffles coming this autumn, the gun powder needs to be kept dry. This approach of contained war also explains the interesting scope of investigation against life insurers. Nine private insurers have investigators ploughing through their files on universal insurance business since the winter of 2016. Five have been punished for malpractice. The hardest slap was on Foresea Life Insurance with its chairman Yao Zhenhua banned from the industry for 10 years. Is Foresea Life the poster boy or scapegoat of Chinese insurance? It would be logical to expect a probe aimed at Anbang Life Insurance, which has been the largest benefactor from the universal insurance bubble. It has devoured more than 211 billion yuan in investment deposits in the name of insurance in 2016. That is almost 20 per cent of the entire industry, in one insurer. Much of the money was sunk into listed companies, making Anbang a shareholder of the largest number of listed companies. Yet, nothing has happened to Anbang so far. In fact, it hasn’t even been investigated. Of course, you won’t read about that in the mainland media. They reported only what has happened and what was said.