By Hu Runfeng, Deputy Editor-in-Chief of TMTPost and Managing Editor of Barron's China
At 8 p.m. on July 24, 2026, China's top anti-graft authorities announced that Fang, a former member of the Communist Party committee and vice chairman of the CSRC, was under investigation for suspected serious violations of party discipline and the law.
Before joining the securities regulator, Fang spent the longest stretch of his career in Shanghai. During those years, I was also based there, working for a financial news magazine, and our professional paths crossed frequently. This article does not address the allegations behind the current investigation. Instead, it looks back at several episodes from Fang's years in Shanghai.
A Business Card That Declared "Department Director Rank"
In the middle of 2006, I became head of Caijing magazine's Shanghai bureau. One of my first calls after arriving was on Fang, then deputy director of the Shanghai Financial Services Office.
His r é sum é was exceptional. He held an undergraduate degree from Tsinghua University and a Ph.D. from Stanford University, where he studied under Joseph Stiglitz, the Nobel laureate in economics who was then serving as chairman of the U.S. President's Council of Economic Advisers. Such credentials were almost overqualified for a local financial bureau. For Shanghai, however, they seemed entirely appropriate.
When we met, Fang handed me his business card. Beneath the title "Deputy Director, Shanghai Financial Services Office," it carried an additional notation in parentheses: "Department Director Rank."
I later brought the card back to Beijing, where it circulated around the Caijing newsroom. It provoked no small amount of amusement among my colleagues on the financial desk.
At the time, Caijing was home to a group of idealistic journalists. To us, there was something unintentionally comic about a Stanford-trained economist feeling the need to print his administrative rank on a business card.
Only later did I learn that among the seven or eight deputy directors at the Shanghai Financial Services Office, three or four enjoyed the unusually elevated rank of department director. That fact itself spoke to Shanghai's unique status as China's financial centre.
Back then, Caijing Editor-in-chief Hu Shuli's commitment to professional journalism carried considerable influence among China's Western-educated returnees. Fang, too, held the magazine in high regard. Whenever Caijing organized forums or seminars in Shanghai, he almost always attended, provided he was in town and his schedule permitted.
But he was also mindful of his official position and never made himself available indiscriminately.
On one occasion, after personnel changes shook Shanghai's financial circles, I called him hoping to learn what was happening behind the scenes. Fang's tone immediately turned cool. Matters like that, he said, were not something I should be asking him about.
I abandoned any thought of cultivating him as an important confidential source.
The following year, Ji Xiaohui, then director of the Shanghai Financial Services Office, was appointed chairman of Shanghai Pudong Development Bank, leaving Fang to succeed him as director.
When I visited him again after his promotion, he spoke much more freely.
Ji, he remarked, had spent his career in banking and had never fully adapted to officialdom. Returning to the banking industry, Fang suggested, suited him better.
He was equally candid when discussing other senior figures in China's financial sector. At the time, the Bank of Communications, headquartered in Shanghai, served as the experimental platform for reforming China's large state-owned banks. I interviewed its chairman, Jiang Chaoliang, and after my article appeared, Fang brought up several of Jiang's remarks on his own initiative.
He wondered aloud whether the reporter — meaning me — had polished some of Jiang's arguments, making them sound better than they really were. His assessment of the bank's chairman was clearly less than flattering.
Looking back, I do not think this reflected the condescension of a Stanford Ph.D. toward someone educated at a junior college. More likely, it revealed the subtle and often uneasy relationship between Shanghai's financial office and the city's most important financial institution.
"The Financial Office Is a Service Agency, Not a Regulator"
After taking charge of the Shanghai Financial Services Office, Fang was full of confidence and eager to leave his mark.
Yet there was only so much he could accomplish. China's financial industry was, and remains, governed under the vertically integrated regulatory system known as "one central bank and three regulatary commissions," with authority concentrated in Beijing. A municipal financial office had limited formal powers.
At one year-end appreciation banquet for Shanghai's financial industry, Fang took the stage to introduce the institutions represented in the audience. In his remarks, he referred to them as "the various finatncial entities under the management of the Shanghai Financial Services Office."
Sitting in the audience, I immediately felt that something about the wording was off.
Moments later, Tu Guangshao, then vice mayor of Shanghai and the next speaker, gently corrected him in public.
"Let me make one small correction," Tu said. "The Financial Services Office is a service and coordination agency. It is not an industry regulator."
I noticed Fang smile briefly, though not without embarrassment.
Tu had previously served as a vice chairman of the CSRC himself and understood precisely where the boundaries of regulatory authority lay. His correction was more than a statement of fact. It was a tactful reminder that, under China's vertically structured regulatory system, a local financial office could coordinate and facilitate — but never regulate or lead.
That small episode offers an important key to understanding Fang's years in Shanghai.
His efforts to expand Shanghai's financial policy autonomy were, at their core, attempts to carve out room for institutional experimentation within the narrow space allowed by Beijing's centralized regulatory framework.
In 2008, the Shanghai Financial Services Office introduced policies to encourage the development of private securities investment firms and private equity funds. After the State Council issued its landmark Document No. 19 in 2009 supporting Shanghai's development as an international financial centre, Fang's office drafted more than ninety follow-up initiatives. They established the Lujiazui Financial City and the Bund Financial Cluster — and sought policies ranging from value-added tax reform to incentives for attracting senior financial professionals.
Another major undertaking during Fang's tenure was helping create the Lujiazui Forum.
The inaugural forum opened at the Pudong Shangri-La Hotel in May 2008 after only three months of peparation. As one of its founders, Fang personally drew up the guest list.
At the opening forum, he posed a question that reflected his global ambitions:
"London and New York are universally recognized as international financial centres, but they occupy different time zones. We need a third financial time zone in East Asia so that the world can achieve truly 24-hour trading."
Less than a year later, in the first half of 2009, building Shanghai into an international financial centre was formally elevated to a national strategy.
In public appearances, Fang cultivated an image of internationalism and market-oriented reform. He frequently praised Wall Street's professionalism, rules-based governance and integrity, while offering pointed criticism of shortcomings in China's own financial industry.
Sometimes academics would send him emails in Chinese, only to receive replies in English.
That distinctive style earned him a reputation as one of the public faces of Shanghai's campaign to become an international financial centre.
The same year, as China's ChiNext board prepared for launch, venture capital was booming.
I was invited to observe a closed-door discussion in Shanghai attended by leading investors, including Fang Fenglei and Shan Weijian, who had been asked to advise the city on developing its private equity industry.
During the meeting, Shan recounted an investment in which he had become the controlling shareholder but found himself locked in a dispute with the company's chairman. The chairman refused to cooperate, taking with him all of the company's official seals.
Without the corporate chops, Shan explained, no board resolution could complete the required legal procedures, making it impossible for any decision to take legal effect.
"So what should I do?" he asked.
The room erupted in laughter.
A female official from the local administration for industry and commerce smiled and replied, "Off the record, I can teach you a solution — just have another identical set of company seals made."
Looking back, the episode was a telling snapshot of the financial ecosystem at the time.
Fang admired the Wall Street model of rules, contracts and the rule of law. Yet when those ideals encountered the realities of China's business environment, practical problems were often resolved not through formal institutions but through the kind of improvisational pragmatism that Chinese people sometimes call street smartness.
Years at the Securities Regulator -- The Achievements and Controversies of a Market Reformer
During China's annual parliamentary meetings in 2013, a self-recommendation letter that Fang sent to the Party's Central Financial and Economic Affairs Office ( commonly known as the Zhongcai Ban ) opened the door for him to join the country's top economic policymaking body.
When I later asked a senior figure in Shanghai's financial community whether the story was true, he did not deny it. He laughed and described the move this way: "Fang's rank stayed the same, but the position became much more important."
Following the stock market crash of 2015, Fang was appointed vice chairman of the China Securities Regulatory Commission ( CSRC ) .
His years at the regulator coincided with the most intensive drive in China's history to make the A-share market more market-oriented, more rules-based and more international. They also became the period in which his public reputation grew the most polarized.
When Fang assumed office, the wounds from the market crash were still fresh. Investor confidence had yet to recover, and many retail shareholders placed great hopes in the Western-trained technocrat.
Chinese investors affectionately nicknamed him "Fangxin Hai"— a play on his name that literally means "invest heavily with peace of mind." They hoped his regulatory philosophy would restore confidence, lift stock prices, and allow investors to hold their positions without fear.
During his tenure, China's domestic stock market achieved several milestones.
A-shares were progressively included in the MSCI Emerging Markets Index and the FTSE Russell Global Equity Index Series. Futures contracts on crude oil, iron ore, purified terephthalic acid ( PTA ) and other commodities were gradually opened to overseas investors. Fang also played a central role in designing the registration-based IPO system that was first introduced on Shanghai's STAR Market before expanding to ChiNext and eventually the entire main board, fundamentally reshaping the financing framework for China's high-tech companies.
Yet as successive rounds of market-oriented reform coincided with prolonged volatility in China's stock market, public sentiment shifted dramatically.
The affectionate nickname quickly turned into biting sarcasm.
Instead of "invest heavily with peace of mind," retail investors joked that Fang had delivered "fall with peace of mind," "get trapped with peace of mind," and "lose money with peace of mind."
Among small investors, the reforms that generated the greatest resentment were the normalization of IPO issuance, the expansion of securities lending, and the rise of quantitative trading.
Whether these market-oriented reforms were well suited to China's stock market — and what unintended consequences they produced — remains the subject of debate even today.
The most controversial issue, however, was Fang's unwavering support for quantitative trading.
Since then, whenever Chinese equities have suffered another sharp downturn, many investors have blamed quantitative funds, with criticism eventually finding its way back to Fang himself. Online attacks against him often became intensely personal.
Viewed objectively, however, Fang himself acknowledged as early as 2015 just how difficult his position was.
He once explained publicly why the chairman of the securities regulator has perhaps the hardest job in China's financial system:
"The heads of the other three financial regulators normally don't cause ordinary people to lose money. If you're the banking regulator, for example, people put their savings in the bank and at least earn some interest. But the securities regulator is different. If things go wrong, ordinary investors lose money.
"Stock investing doesn't provide a guaranteed return. For ordinary investors to make money, capital has to be allocated efficiently, and stock prices can't become excessively inflated. Only when both conditions are met can average investors earn reasonable returns. The problem is that achieving both conditions is extremely difficult."
Those remarks have aged remarkably well.
They reflected a dilemma that has never disappeared from China's capital markets: how to build a genuinely market-driven system while still satisfying millions of retail investors who expect regulators to shield them from losses.
One exchange from the 2018 Boao Forum for Asia revealed another side of Fang's thinking.
Addressing Jean-Pierre Raffarin, the former French prime minister, Fang posed an unusually candid question.
"Several distinguished statesmen have spoken about China's success over the past forty years. China has followed its own path — a path that has transformed both China and the world.
"My question is this: China's path is obviously different from the one taken by Europe and the United States. If China continues along this path and becomes an even more developed country, does a major European nation like France feel anxious when confronted with a different development model — one under which China is becoming increasingly powerful? Does it make people question whether their own path is the right one?"
In retrospect, the question seemed directed not only at Raffarin but also, in some sense, at Fang himself.
A man steeped in Wester economic thought spent much of his professional life attempting to reform China's financial system. Throughout that journey, he was continually caught between two competing frames of reference: the market institutions he admired abroad and the political and institutional realities in which he had to operate at home.
Thinking back to my years covering him in Shanghai, I find that Fang's own assessment of one of his predecessors could just as easily have described himself.
He was exceptionally intelligent.
But he also retained something of a scholar's idealism — and no small measure of intellectual pride.
Perhaps, in the end, he was better suited to academia than officialdom.
An Era Comes to a Close
Looking back today, that anecdote from the Boao forum also serves as a revealing footnote to the era.
Fang championed the Wall Street practices. Yet when those practices clashed with the realities of China's commercial environment. Some of the reforms he championed remain deeply contested. Nearly all continue to provoke debate. The debate may remain unsettled for some time. What, however, has come to an end is Fang's own public career.
Every reform must coexist with political priorities, administrative realities and institutional constraints. No one embodied that tension more vividly than Fang.
Thinking back on our conversations in Shanghai nearly two decades ago, I find myself recalling one of Fang's own observations about his predecessor. He had remarked that the man was highly capable but ultimately better suited to banking than to government.
The same judgment, I now think, may apply equally well to Fang himself.
He was exceptionally bright. In another life, he might have made an outstanding professor.
The generation of Western-educated financial officials to which Fang belonged has now largely passed from the scene. Some retired quietly. Some entered the private sector. Others faded from public view.
And now, one of its most recognizable figures finds himself under investigation.
What I remember is a Stanford-trained economist who once handed me a business card bearing the words "Department Director Rank" beneath his official title.
At the time, my colleagues and I laughed at what seemed an unnecessary display of bureaucratic status.
Twenty years later, I see the card differently. Perhaps it was, in retrospect, a metaphor for his entire career.
