2.367 billion is just a smokescreen: The Audit Office names China Bank for employees faking numbers, disguising private equity as public funds to evade taxes. This figure is less than one-tenth of Bank of China's 243 billion annual profit. This episode reveals why the CCP is using this chicken to scare the entire financial system, and the systemic deadlock that forces all major banks to collectively falsify data.

The video analyzes the National Audit Office's naming of the Bank of China for using employees to meet headcount requirements, disguising private equity funds as public funds to evade 2.367 billion yuan in taxes, and compares this amount to the profit, bad debt, and non-compliant loan scales of the Bank of China and the entire industry. The program also discusses how fintech, local government debt resolution, low interest spreads, and fiscal pressure force banks to inflate scale, apply labels, and engage in policy arbitrage, arguing that audit accountability cannot resolve the institutional contradiction between commercial logic and administrative orders.

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The National Audit Office named the Bank of China while delivering its annual audit report to the Standing Committee of the National People's Congress. What did the Bank of China do? It performed a stunt to meet headcount requirements by forcing private equity funds to be packaged as public funds, exploiting the loophole that public funds are exempt from income tax. Over two years, they didn't even evade that much—about 2.367 billion yuan. In fact, what is 2.367 billion yuan to a major bank? If they pay it back, they pay it back; it won't break their bones or hurt their foundation. The real point of interest is that the CCP specifically chose a large, well-known bank that specializes in retail business to publicly drag out and make an example of.

Who is this for? It's not for the public; it's for the financial system. Therefore, this is not just a tax payment incident, but a public repositioning of the Chinese banking system.

Let's first clarify the Bank of China's method, as it was qualified to be this "chicken" to be slaughtered. This headcount padding wasn't just some teller being confused; it was a complete industrial chain. The Bank of China first found two subordinate financial institutions to act as business channels, then organized its own employees, each contributing 1 to 100 yuan to meet the headcount. The money from each person wasn't much; it was purely to meet the headcount. Then, they forced 11 private equity funds to look like they were being raised from the public, put on the identity of public funds, and took advantage of the lower income tax rates for public funds.

When did this operation start? It started in 2024. Public and private funds are two completely different species. Public funds have low thresholds, many people, and less tax; private funds target high-net-worth qualified investors, have high thresholds, and limited numbers of people. The CCP's 2026 fiscal and tax report, also known as Document No. 10—this tax policy continues this year—states in black and white that tax exemptions are only for public securities investment funds, and private funds are not included at all.

Bank of China was actually quite clever; by just changing the underlying holder structure, they turned private equity into public funds. On average, each fund evaded 200 million in taxes.

This method also has a particularly interesting aspect: it is highly contagious and easy to learn. Every bank has hundreds, thousands, or even tens of thousands of employees, and the public understands it as soon as they hear it. The idea of using employees to pad headcount to cheat on taxes sounds fake even when written down, but it is actually true. So, don't think the CCP's management capability is flawless. If you really want to exploit the CCP's loopholes, the gap is fucking big enough to drive an ox through.

Why name them at this specific time? It's because things coincided. First, the audit system itself is annual. What does the audit report mainly do? Every year, it reports to the National People's Congress on the execution of the central budget, fiscal revenue and expenditure, major risks, and the situation of state-owned assets in the financial sector. Local debt is also audited annually. So, it cannot be entirely described as a temporary political campaign. But who is named, to what extent, and with what wording is itself a major signal.

The second factor that has converged is that the fiscal situation is truly short of money, and it is painfully short. The audit report disclosed that tax and customs authorities over-collected or collected corporate income tax and value-added tax in advance from 1,954 enterprises, totaling 40.427 billion yuan. Twenty-one provinces and cities used the method of drawing funds from the state treasury first and then transferring them back to artificially inflate fiscal revenue by 59.651 billion yuan. Additionally, 4,976 enterprises illegally issued invoices and deducted taxes, evading 10.935 billion yuan in taxes.

Let everyone take a moment to digest this: the amount evaded by Bank of China alone was 2.367 billion yuan, accounting for about one-quarter of the total tax evaded by these 4,976 enterprises. On one side, there is the bottomless tax collection and artificial inflation of revenue by local governments, and on the other, enterprises and financial institutions are hollowing out the tax base.

What else is there? Hasn't the CCP been constantly injecting capital into banks? This time, there is also an implication of reprimanding the banks. It didn't just single out Bank of China; ICBC, CCB, Bank of Communications, and CITIC were also named, stating that their tech finance claims were not matched by reality. Do you see the trick? These banks are all market makers for the Shanghai offshore RMB trading center, and basically, all of them have been implicated.

Then there are the tech innovation loans, which were completely arbitrary. There are 126 provincial-level branches that did not use the innovation scores of tech enterprises as a basis for lending at all; 64.22 billion yuan in loans were only labeled as 'tech' after the fact. Bank of China happens to stand at the intersection of these three lines: the method is particularly clear, the amount is relatively large, the entity is significant enough, and it has high viral potential—it is the most suitable 'chicken' to kill to scare the monkeys.

If you put all the amounts disclosed in this audit report on the table, you will immediately understand that 2.367 billion yuan is just the tip of the iceberg. This time, three financial enterprises were also key targets of the audit, and one of the items is extremely ridiculous, called 'involutionary competition.' The scale of loans artificially inflated by involutionary competition alone reached 1.41 trillion yuan. These banks have also played all sorts of tricks, using false concessions to expand their bond business scale to 756.59 billion yuan, illegally concealing or disposing of non-performing assets worth 63.943 billion yuan, and illegally conducting credit business worth 67.6 billion yuan.

Agricultural Bank of China didn't fare any better. The violation at the Agricultural Bank of China was lending 11.066 billion yuan to projects that were not high-standard farmland, and the money was diverted to buy wealth management products and bonds.

So, do you see how the CCP's political-related data is generated? The CCP tells you through other matters that the figure of 2.367 billion yuan, when placed in a long row of numbers, doesn't even come close to the top.

Just looking at how the 1.41 trillion yuan of involution was piled up: part of it relied on capital circulation games like 'deposit first, loan later' or 'urgent lending and immediate recovery.' This method alone artificially inflated the figure by 615.07 billion yuan. 'Deposit first, loan later' means depositing with the left hand and lending with the right: the bank lets a company deposit 100 million yuan, then turns around and lends it back in the name of a loan, and then the company deposits it back. On the bank's statement, both deposit and loan data are soaring, but the money hasn't even left the bank's counter, for fuck's sake.

'Urgent lending and immediate recovery' is even more fucked up; they specifically choose the day of the month-end or quarter-end assessment to make a sudden loan to boost the numbers. Once the assessment is over, they immediately take it back. It's purely for show, posing for a fucking photo. Not a single cent of the money entered the real economy; it just inflated the scale to make it look good.

Another part of the banks relied on ultra-low loan interest rates to snatch loan clients, and some even paid for clients to develop information systems in exchange for deposits; this part added 472.3 billion yuan. The rest was made up by lowering audit standards and relaxing risk control requirements, adding another 324.127 billion yuan.

To put it bluntly, all these methods are for the sake of scale and boosting numbers. Passing money from the left hand to the right hand does make the numbers look good, but there is no such real demand for funds. There is no way around it; the CCP loves to look at numbers. I think supporting 1.41 trillion doesn't show enough respect to the Emperor; why not make it 1.5 trillion? Isn't '5' our Emperor's lucky number?

So now you understand: what the CCP wants is not 23 billion; this money doesn't count for much. If you put 2.367 billion yuan in front of Bank of China's annual profit of 243 billion yuan, it's not even a rounding error. What the CCP really wants is the internal revenue function of the bank—in plain language, the account book in the bank's heart.

In the past, the algorithm of these banks was: the larger the scale, the better; the more labels, the better; the higher the profit, the better; and risks can be pushed to the back. Doesn't the fucking idiot brother like tech finance and new quality productive forces? Then just slap a tech label on ordinary loans. If the CCP wants the agriculture-related scale to look good, then solicit deposits at low costs to boost deposits and loans.

Now, this system of the CCP is completely a system to fool the CCP's giant whale: whatever you want, I can conjure it up for you, and I will definitely give you the labels clearly. If you want numbers, I'll give you numbers; if you want scale, I'll give you scale; if you want labels, I'll give you labels.

Some friends might ask, is Bank of China the only one, or is this a particularly common phenomenon? This needs to be addressed separately. Specifically regarding the method of using employees to pad the numbers to package public offerings and evading 2.367 billion yuan in taxes, current public evidence mainly points to Bank of China; one cannot say without evidence that every bank does this.

But if we are talking about policy arbitrage, labeling, using channels, boosting scale, and internal control failures, this is clearly not Bank of China's patent. Every single one of them is involved. This is a common ailment of the entire state-owned financial system.

The CCP's own audit also provided a bunch of corroborating evidence. For example, 10.019 billion yuan in intellectual property mortgage loans were actually fully backed by traditional collateral, including real estate and land; it's equivalent to using the house as collateral and counting it as intellectual property pledge, occupying both sides. And those so-called tech enterprises that are listed, a considerable number of them have no tech characteristics at all.

What does this indicate? It shows that the CCP has offloaded all its hopes for innovation onto banks, demanding that they support scientific and technological innovation. Sometimes I find it truly incomprehensible: how did these bank employees end up doing venture capital work for tech companies? Therefore, the judgment is very clear: the Bank of China (BOC) case is a specific example of the methodology, but it is a common practice under institutional incentives.

It reveals that it is not just BOC that is rotten; rather, when a bank is simultaneously required to make money, execute policies, expand scale, control risks, and adhere to fiscal discipline, the impulse for packaging and arbitrage naturally grows internally. This is the same situation as the CCP's scientific and technological innovation.

Following this further, there has been a particularly obvious trend over the past two years: the scope of regulatory and audit penetration has expanded from private enterprises, internet platforms, and small local institutions all the way to large state-owned enterprises, central enterprises, financial holding groups, and accounting firms.

Many people are whispering: has the CCP gone crazy because it lacks money? If they punish private capital, private entrepreneurs would likely view it as profit-driven law enforcement. But if they are already pointing the gun at the heads of China's largest commercial banks, it is more of a political crackdown. The CCP's approach is more like a major cleanup of the entire state-owned balance sheet.

Taking stock of banking industry fines, in the first 5 months of 2026, 475 banks received 2,474 fines totaling 870 million yuan, a year-on-year increase of 27%. The fastest growth was in the category of data reporting and governance violations. The Chinese banking industry received 349 fines, a direct year-on-year increase of 2.66 times. In the full year of 2025, banks received 6,656 fines totaling 2.66 billion yuan.

Fines, of course, cannot be directly equated to BOC-style tax evasion, but they prove one thing for certain: the operational pressure on the Chinese banking industry is immense, and compliance pressure is rising systematically.

Banks in China are in a very difficult position now. In 2025, the net interest margin of commercial banks was squeezed to 1.4%, and the Bank of China itself was even worse, at only 1.26%, with net interest income experiencing negative growth for two consecutive years.

Looking at asset quality: even with all the CCP's fraud, cover-ups, and delays—under such cosmetic methods—the industry-wide non-performing loan balance still hit 3.5 trillion yuan. The total net profit of the entire Chinese commercial banking industry after working hard for over a year was only 2.38 trillion yuan. In other words, the bad debts sitting on the books are more than the money the entire industry earned after working themselves to the bone for a year.

If we look at the real situation, I think it is at least 5 to 10 times the figures published by the CCP, which means at least 15 trillion to 30 trillion yuan. Just look at the real estate loan sector of the Bank of China; the non-performing rate soared by 88 basis points within half a year, reaching 6.26% directly.

So it is very clear: revenue is shrinking, while risks are rising. Legitimate business is becoming increasingly difficult to conduct, but the more things are in this transitional period, the more tempting regulatory arbitrage, tax arbitrage, and channel packaging become. Legitimate paths are hard to walk, and the CCP, especially that fucking idiot Emperor You Xi, keeps pointing out directions for the banks, so they take shortcuts using the golden touch of the fucking idiot Emperor You Xi.

Precisely in an era of low interest margins, the CCP wants to use audits to hold banks down tightly; otherwise, banks would dump all their risks onto the Chinese government using a bunch of complex products. These idiots in the CCP still don't understand that if a crisis explodes, the Chinese government will still have to pay. That is why there has been frequent crackdowns on banks recently.

Now everyone understands why people in this system are lying flat. The environment is already bad. China is still fucking forcing banks to push hard. Pushing hard is fine, but stop nagging. The path is drawn by the CCP, the scale is set by the CCP, and the direction is pointed by the CCP, but the market simply has no demand, yet they still force banks to produce the data—so what can they do? Take shortcuts. Now even taking shortcuts doesn't work, and they still get cracked down on, so what can they do? Then they just stop working.

Speaking of this, we cannot avoid a core question: what does the CCP actually view banks as now? The tasks the CCP has assigned to banks over the past two years first require banks to invest money into major strategic priority areas and weak links specified by the CCP, and to issue loans to those places, rather than just picking traditional loans with sufficient collateral, lowest risk, and highest returns.

They also have to pay for a series of political projects, including tech finance, green finance, inclusive finance, and new quality productive forces. These are by no means ordinary business paths. But if the CCP government asks these bank people to provide technological standards, isn't that bullshit? What if there are no standards? Rely on intuition. That is why the audit would say that the loans issued by banks under the name of tech finance are not what they claim to be.

It is not just that the CCP wants to put a label on the banks; it really wants to change their heads and really wants the banks to take the risks. But are there any benefits after taking the risks? No. Can you be exempted from liability if risks occur? Keep dreaming. It is already good enough that they don't go after you; you still fucking want to be exempted from liability? Fuck, is that the end of it? Not yet.

Banks also have to cooperate with local debt resolution, government bond issuance, LGFV default extensions, ensuring the completion of housing projects, and stabilizing real estate. In other words, these Chinese banks now have to pour water into the CCP's fiscal and industrial goals. Finally, the pressures of real estate, local debt, bad debts of small and medium-sized banks, and non-performing household loans still have to be absorbed and buffered by the banks.

Therefore, banks in China are no longer simple commercial institutions, but a node on the CCP's balance sheet.

What forced banks into this position? The real estate bubble burst. How did banks work in the past? They lay on the ground and processed mortgages, and by expanding the scale of infrastructure, they could make money. Now all these high-quality assets have become risk assets, and it coincides with the tech strategy trend of the fucking idiot Emperor You Xi. The CCP had a brain fart and mobilized these banks to prop up China's tech companies.

However, hard technology is inherently high-risk, long-cycle, and lacks collateral, which does not suit the appetite of banks and cannot pass their risk control standards at all. Consequently, banks simply turned technology finance into a performative project. Compounded by low interest spreads and fiscal pressure acting simultaneously, banks were forcibly pushed from commercial logic toward regime logic.

The most amusing part is that all banks, as if by prior agreement, have unanimously moved toward the routine of policy packaging. Behind this lies a complete feedback loop. The Chinese Communist Party (CCP) provides a vague and ethereal strategic goal, such as technology finance or inclusive finance, and then regulators and performance assessments quantify these goals into indicators like loan balance growth rates, the number of branches, and the number of products.

Once these indicators reach the banks, the banks weigh them and realize that the entities they are truly supposed to serve are high-risk, low-yield, and lack collateral, so they simply find low-risk clients and re-label them. You want data? I will give you data. If a risk occurs, you will hold me accountable anyway. Once the data is reported and the statements look good, the CCP feels the policy is effective and then increases the indicators further.

What is the final result? Those who engage in arbitrage get rewarded, while those who actually take risks are eliminated; bad money drives out good. The Bank of China case is merely a version of this model applied to tax policy. Public funds are tax-exempt; banks discovered a tax gap between private and public funds, so they gathered people to artificially create the appearance of a public fund to extract tax benefits.

Conducting this strict audit over the weekend breaks this cycle and forces banks to redo their books. But as long as the long-term incentive mechanism remains unchanged, this game will only change its disguise and continue. If there is only accountability without risk compensation, banks might shift directly from fake funds to real contraction, and the technology enterprises and micro-businesses that should be invested in will truly not receive funding.

If one wants to rigorously verify whether fiscal pressure is driving this round of audits and fines, three indicators can be observed. The first is local fiscal pressure, including year-on-year land revenue, year-on-year general public budget revenue, the proportion of rigid expenditures, and the scale of maturing local debt. Land revenue is already failing, but it could get even worse.

Second, look at non-tax reliance, including the proportion and growth rate of confiscation revenue within non-tax revenue. Third, look at audit penetration, including the amount disclosed in audits, the amount rectified, data on transferred clues, and the number of financial institutions named.

If these three indicators rise together, it shows that there is indeed a correlation between fiscal constraints and regulatory strengthening.

Speaking of transfers, this audit has a particularly illustrative figure: since May 2025, audits have discovered over 260 major disciplinary and legal violations, involving more than 1,100 people and 91 billion yuan in funds. This is no longer just a matter of paying back taxes or fixing books.

Looking back at the current Chinese banking industry from a systemic level, a sober conclusion can be drawn: a case like the Bank of China is not a question of whether it will happen, but rather that as long as this system is not changed, it is destined to happen repeatedly, and it cannot be cured. As that netizen said, swatting flies around a cesspit—that is roughly what this means.

The task the CCP has assigned to Chinese commercial banks is a Mission Impossible from start to finish. On one hand, it asks banks to act as market entities, making their own money, controlling their own risks, and allocating loans according to yield and risk; on the other hand, it asks banks to act as political tools, obeying administrative orders, bearing the burden of industrial policies, filling fiscal holes, and acting as a backstop for the entire system.

These two things are inherently in conflict. The market recognizes price and risk, while the administration recognizes the direction pointed by the finger of the fucking idiot Emperor You Xi and the narrative direction. It is impossible for the same bank to listen to both the market and the administration at the same time.

Banks have no ability to resolve this contradiction because it is fundamentally unresolvable. That leaves only one path: fraud. Make the political indicators look good on the reports—whether by gathering people, faking reimbursements, or inflating scale—while privately protecting their own commercial interests.

Therefore, whether it is arbitrage or fraud, it is not because any specific employee or bank president is corrupt, but the inevitable product forced out by an impossible task; it is something produced by the CCP's own system.

Now the CCP wants to turn back and crack down on this, so I ask one question: can a cesspit swat its own flies? What is an audit for? An audit is the CCP using its administrative hand to wipe the ass of the distortion it created itself. It can press down once or twice, but it can never touch the root cause, because the CCP itself is the root cause; it is destined to treat the symptoms but not the disease.

This time, one channel for gathering people was blocked, but the banks will just switch to another channel next time to continue the arbitrage; this time they caught the previous version, but the tricks for the next version are already on the way.

What is even more amusing is that every time the CCP uses administration to fill an administrative hole, the banks' reliance on the administration deepens, and whatever real market capability they had is hollowed out a bit more. The more the CCP presses, the more banks shrink from feigning enthusiasm to truly lying flat. They won't invest a single penny in the hard technology or micro-businesses they are supposed to support.

You ask me to take risks and give me indicators, I give you the results, and you still fucking scold me and put pressure on me? Then I am not doing it anymore. Resource allocation is not becoming better, but worse. This is the most insidious part of this system: the medicine extracted is exactly what is worsening its own illness.

This 2.367 billion yuan from the Bank of China is not a turning point, let alone an isolated incident; it is just an inevitably failing system having another scheduled seizure. The CCP can take turns parading this bank or that bank in public, and can drag things out through audits, accountability, and tax payments, but it will never be able to jump out of its own logic in its lifetime.

This contradiction can only be suppressed, not truly resolved, and every time it is suppressed, the cost piles up higher. To put it bluntly, this is the consequence of forcibly applying the Leninist model of administrative control to a modern financial system.

Right now, it is neither a true market, because whenever it is politically inconvenient, the administration simply flips the table; nor is it a planned economy, because the veneer of the market keeps spawning arbitrage. It leans on neither side, and the longer it drags on, the more rigid it becomes, until it eventually rots in its own hands.

Did auditing create the Bank of China, or did it create the Chinese Communist Party (CCP)? That cannot be cured. This is why it is destined to fail at the institutional level.