China’s anti-corruption body expels former finance official from Communist Party for magnifying hidden-debt risks, trashing ecosystem

Jiao Xiaoping, once in charge of managing investment with the private sector, ‘exacerbated hidden-debt risks’ and failed to protect the rich biodiversity of the Qin Mountains

He also accepted gifts and cash, owned shares of non-listed companies, and engaged in nepotism, the Central Commission for Discipline Inspection said

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China’s Communist Party, led by Xi Jinping (centre), continues to crack down on corrupt officials. Photo: Xinhua

Published: 7:30pm, 28 Jul 2023

A former finance official tasked with overseeing investments from the country’s private sector has been expelled from the Communist Party and dismissed from office for “serious violations of discipline and law”, China’s anti-corruption watchdog said on Thursday.

Jiao Xiaoping had deviated from party principles and “exacerbated hidden-debt risks of the government and created financial security risks”, according to an online statement by the Central Commission for Discipline Inspection (CCDI).

The commission did not elaborate on the details of Jiao’s alleged role in the so-called hidden debt, which has become an outsized problem at local levels as authorities borrowed money through informal channels, keeping debt off balance sheets and making it more susceptible to corruption than relatively transparent government bonds.

Over the past few years, Beijing has taken steps to curb hidden debt – seen as a “grey rhino” risk to China’s state-dominated financial system. And on Monday, the Politburo, the party’s prime decision-making body, vowed to work on a package of policies to defuse local-government debt risks when assessing the economic situation and outlining job priorities for the rest of the year.

There are no official figures on the level of China’s hidden debt, but analysts have estimated that it could be as much as 50 trillion yuan (US$7 trillion). In comparison, China’s gross domestic product for all of 2022 was 121 trillion yuan.

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