The Decline of a Once-Thriving Industry

In an unexpected twist, China's once-flourishing finance industry has seen its high-flyers descend into what many are now referring to as "finance rats." The striking comment from Xiao Chen*, an employee at a leading private equity firm in Shanghai, encapsulates the bleak changes of recent years: “Now I think about it, I definitely chose the wrong industry.”

Once earning a staggering 750,000 yuan ($106,200) annually, Xiao's pay has been slashed to half that amount. "The glow of the industry has worn off," he lamented, as the lavish lifestyle that once defined his career has dimmed significantly. With bonuses disappearing and financial prospects dwindling, many professionals in his position are grappling with a reality they could never have anticipated.

Government Policies and Their Impact

This dramatic shift exemplifies the broader economic malaise affecting China. President Xi Jinping has undertaken a series of stringent crackdowns targeting billionaires and enterprises across various sectors, including finance. These actions, couched in rhetoric advocating for "common prosperity," are aimed at addressing the stark inequalities that have emerged in recent decades. The tolerant attitude towards wealth has been replaced by a directive that favors loyalty to the Communist Party over individual ambition.

Inflated status symbols and luxury brands have lost their allure for many workers like Xiao, who now reluctantly trade European holidays for more modest trips to Southeast Asia. Reflecting on his spending habits, he expressed, "I wouldn’t even think about buying from luxury brands like Burberry or Louis Vuitton."

Corruption and Its Aftermath

The environment has turned hostile for many in the financial sector, with numerous high-ranking officials facing severe repercussions. Recently, Fan Yifei, a former vice-governor of the People's Bank of China, was handed a death sentence with a two-year reprieve for accepting bribes worth over 386 million yuan ($54.6 million). Such cases of corruption have fueled the ongoing anti-corruption campaign, instilling fear across the industry.

Rising Discontent and Backlash

Discontent is bubbling beneath the surface among finance workers, as evidenced by the explosive conversations emerging on social media. A significant backlash ensued in July 2022 when a Xiaohongshu user flaunted her spouse's exorbitant salary of 82,500 yuan at China International Capital Corporation, igniting a conversation about the vast salary disparities in a country where the average monthly wage in Shanghai hovers slightly above 12,000 yuan.

These discussions have coincided with official mandates, such as the finance ministry's new rules for optimizing salary distributions within firms, as well as a pointed criticism of the so-called “finance elites.” The insinuation of a salary cap looms large, but the specifics remain shrouded in secrecy, generating confusion and unease among employees.

A Shifting Job Market

As firms scramble to comply with changing regulations, many finance professionals find their workloads diminished. The influx of new public offerings has slowed, and foreign investment has taken a nosedive, causing fear and frustration to permeate workplaces. "The morale of the team has been very low. Discussions among colleagues rarely paint a rosy picture," Xiao noted.

In this climate, the notion of job mobility feels precarious. The few inquiries into switching industries often lead to the realization that job opportunities are slimmer than they appear—“If you stand up, you might find your seat is gone,” quipped one disgruntled worker.

Social Stigma and the Future of Finance

Yet it’s not solely the government that has turned against finance workers; societal attitudes have shifted dramatically as well. Xiao lamented the stigma: "We are no longer wanted even for a blind date. You would be told not to go once they learn you work in finance."

*Names have been changed to protect identities. As China continues to navigate these tumultuous financial waters, the glamorous image once associated with the world of finance fades, leaving many to ponder their future in an industry that now feels more like a trap than a gateway to wealth. The path to recovery seems unclear, and the struggle for the soul of the finance sector continues.