The Fifth Plenary Session is Decided, Wen Jiabao Dismantles Li Qiang's Three Trump Cards; Fang Xinghai Falls from Power, DeepSeek Suddenly Halts Financing, Jiang Wangzheng Silences Himself [Jiang Feng Horizon 20260730 Episode 449]

The video analyzes the investigation of Fang Xinghai, Liang Wenfeng's suspension of DeepSeek's second round of financing, and Jiang Wangzheng reducing the publication of content related to Li Qiang's succession and the personnel arrangements of the Fifth Plenary Session. The program suggests that Fang Xinghai holds information on cross-border capital, capital markets, and wealth management, and his investigation may simultaneously affect DeepSeek's financing prospects, Li Qiang's industrial achievements, and his succession arrangements, while further discussing the political maneuvering among Wen Jiabao, Hu Jintao, and different factions within the Chinese Communist Party (CCP).

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Welcome back to Jiang Feng Horizon, friends.

Last Friday, July 24, Fang Xinghai was investigated, and the internet has been buzzing about it for five days, as everyone has seen. The first to pull back was DeepSeek founder Liang Wenfeng. People are asking what kind of intersection there really was between Liang Wenfeng and Fang Xinghai, who oversaw capital market opening and quantitative institutions going global—all of this can be investigated.

But I think one layer is still being missed. Behind Fang Xinghai stands more than just one Liang Wenfeng; and behind Liang Wenfeng sits more than just one DeepSeek. Looking further back, standing there is State Council Premier Li Qiang.

When real estate can no longer be talked about, local government debt can no longer be talked about, and consumption can no longer be talked about, the person who most needs to write DeepSeek into their performance report is Li Qiang. DeepSeek's sudden explosion in popularity in 2025 amounted to answering the hardest question for him: with the economy already reduced to this state, by what right does he continue to sit in the premier's seat?

The old debts left behind by Xi Jinping can be pushed onto past routes and policies. But this new engine of artificial intelligence was ignited while he was serving as premier. Therefore, what others see is why Liang Wenfeng suddenly halted financing after Fang Xinghai was investigated; what we must continue to ask today is, whose political achievement report was left hanging in mid-air by Liang Wenfeng's pause?

Almost during the exact same period, another of Li Qiang's external lines also suddenly clammed up. That Jiang Wangzheng, who has long been releasing news overseas about Li Qiang's succession at the Fifth Plenary Session and inside information regarding the CCP Central Committee General Office, continues to post about beef noodles, but when it comes to Li Qiang's succession and top-level arrangements, he suddenly is only willing to say half the story.

Thus, ahead of the Fifth Plenary Session, three things have squeezed together: one person investigated, one person pulling back, and one big loudspeaker willing to say only half a sentence. Is this a coincidence, or was it pressed down by the same hand?

Therefore, today's matter cannot stop just between Fang Xinghai and Liang Wenfeng. Fang Xinghai is merely the detained financial interface, Liang Wenfeng is the first to step on the brakes, and what is truly worth pursuing is what lies further back: whose succession arrangement is jammed by this braking action?

The real target of this round of moves may never have been DeepSeek itself, but rather preventing Li Qiang from using DeepSeek to grow prematurely into the next core. To hold down a premier who is rising upward, where should the first cut be made? Fang Xinghai is just a brick on that ground. Because detaining him alone accomplishes two things at once.

Let's start with the first matter. On July 25, the day after the announcement was posted online, Liang Wenfeng notified potential investors for the second round of financing to pause. The valuation for this round was close to $70 billion. Bloomberg reported that one of the reasons was his dissatisfaction with the disclosure of internal discussions among investors.

Liang Wenfeng first founded High-Flyer Quant, one of the largest quantitative private equity firms in China. DeepSeek is a company that High-Flyer established in 2023 and has been supporting all along. Therefore, between him and Fang Xinghai—one having grown up in this market and the other having regulated the financial market—they had to be familiar with each other, whether they liked it or not.

As soon as Fang Xinghai was taken in, Liang Wenfeng had no choice but to stop. What does halting this round of financing mean? A $70 billion valuation is intended for the next steps. Only with new money coming in can they afford new chips, and only with new chips can they support the next generation of models; otherwise, the company's efforts would be in vain.

Moreover, he didn't dare to sign. The second round of financing requires due diligence, and the company must guarantee in black and white to new shareholders that there are no ongoing investigations that could implicate them. Since Fang Xinghai was just announced as being under investigation, all the dealings High-Flyer has had with the China Securities Regulatory Commission (CSRC) over the years are exactly the hardest things to write in that section. So, you can imagine the future of this company; it will slowly wither away.

Furthermore, the path to going abroad has also been cut off. At the Lujiazui Forum in Shanghai on June 17, Fang Xinghai was still on stage suggesting that Hong Kong should attract mainland quantitative institutions to expand their business there. A week later, on June 24, at the Summer Davos, he said again that the US restrictions on capital flowing into China had instead stimulated China's private equity and venture capital.

A person who has been retired for two years and holds no power ran to two international events in one month, and the direction he spoke about was the same: institutions moving to Hong Kong, and international money continuing to come in. In this round of financing, the arrangements for overseas entities and overseas US dollars to go to Hong Kong followed this very path. The person who spoke for this path has been taken in, and as for what the situation of capital inflow and outflow will be in the future, no one can give a definitive answer. In the end, there is no doubt that the deal could not be signed.

The blow this incident deals to Li Qiang is likely greater than the loss of a single artificial intelligence company. DeepSeek grew up in Zhejiang; once successful, Li Qiang could count these achievements as his own political merit. But now, this narrative has suddenly broken; DeepSeek cannot raise money, cannot buy chips, and the next generation of models is delayed.

Therefore, what has collapsed is not just the brand of DeepSeek, but also the core political achievement that Li Qiang originally wanted to hold in his hands. Li Qiang originally wanted to use DeepSeek to prove that he is not just a Premier responsible for cleaning up the economic mess under Xi Jinping, but that he also has an industrial achievement in his hands that can represent the future of China. But now, this most decent achievement has also begun to collapse.

This is the first matter: by detaining an official who has been retired for two years, they have brought Liang Wenfeng to his knees and left Li Qiang without a temper.

The second matter goes deeper than this. Fang Xinghai also handled cross-border funds, accounting standards, and wealth management. The money that the families of the CCP elite place overseas certainly wouldn't be listed under the name of a certain Standing Committee member in the account. It has to go through trusts, funds, and nominees, wrapped layer by layer.

To investigate a family's overseas assets, one needs evidence, mutual legal assistance, and the cooperation of the relevant judicial jurisdiction; it takes a year or more to get any results. However, as soon as Fang Xinghai is taken in, they can quickly catch the people who know where the money is.

He knows which doors can be opened, which institutions have served this group of people for years, and which loopholes were opened by whom and in which year. Therefore, this strike hits the interests of the conservative CCP elite.

The Fifth Plenary Session is just ahead. Before the meeting, what all parties want is never to turn someone into a closed case, but to hold cards in their hands. Some people overseas say he looks quite clean, and the announcement didn't list a shocking amount of money involved. But this precisely shows that the first step is not to convict him as a major corrupt official, but to first seize this interface.

Those who have dealt with him have begun to weigh things for themselves: What did he say inside? What have the investigators already obtained? Will they come after me next? Striking a retired person doesn't require giving anyone an explanation, yet it can simultaneously suppress a machine and a group of people. How cheap is this strike? The side being struck doesn't even have a place to cry for injustice.

But then again, whose person is Fang Xinghai himself? This pillar, Fang Xinghai, was not erected by Li Qiang, nor was he cultivated from scratch by Xi Jinping. The foundation was laid by Zhu Rongji.

Zhu Rongji came from the State Planning Commission and was spotted by Chen Yun, eventually entering Zhongnanhai. At the end of 1993, the unification of the RMB exchange rate was decided, and it was officially implemented on January 1, 1994, merging the official rate and the market rate into one. From this day on, how China's money enters and exits, and at what price it is exchanged, is decided by one system.

This system was built by Zhu Rongji himself: one central bank plus three commissions—the People's Bank of China, the China Securities Regulatory Commission (CSRC), the China Banking Regulatory Commission, and the China Insurance Regulatory Commission. Later, when Xi Jinping came to power, he merged the banking and insurance regulatory commissions into the National Financial Regulatory Administration. The signs were changed, but the underlying structure and the people running it were still those left behind by Zhu Rongji.

Wang Qishan also entered through this line. He is the son-in-law of Yao Yilin. During the 1997 Asian financial crisis, he was brought in to clean up the mess and has since taken root in the financial sector.

Therefore, this group of people has one thing in common: they do not survive on the favor of any single leader; they survive on the system itself. Leaders have come and gone, but they remain. Fang Xinghai is a person who grew out of this system.

He was spotted by Zhu Rongji while at Tsinghua University in his early years and later went to Stanford to earn a PhD in economics. There are two versions of the story regarding his time at the World Bank. One says that Zhou Xiaochuan arranged for him to gain experience at the World Bank for a year before returning to China; the other says that in 1997, Zhu Rongji sighed in front of foreign guests, wondering why none of his students had returned.

The following year, Zhou Xiaochuan, who was the president of the China Construction Bank at the time, wrote an email and called back Fang Xinghai, who was already working as an economist at the World Bank. I cannot confirm which version is true, but both point to the same thing: it was Zhu Rongji and Zhou Xiaochuan, not anyone else, who brought him into this system from the United States.

In August 1998, he returned to China and joined the China Construction Bank, working on shareholding reform, listing preparations, non-performing asset disposal, and debt-to-equity swaps. These terms sound complicated, but in plain language, it meant one thing: cutting out the bad debts from a state-owned bank, cleaning them up, and taking them public to sell for money. At that time, few people in China knew how to do this job.

After returning to China, he actually kept a low profile for several years. In 2001, he became an assistant to the general manager of the Shanghai Stock Exchange, and in 2005, deputy director of the Shanghai Financial Services Office. To put it bluntly, the position of deputy director was just for running errands in Shanghai to attract foreign capital.

Things changed in 2007. That year, Xi Jinping became the top leader in Shanghai, and Fang Xinghai was personally promoted by him to become the deputy secretary of the Shanghai Financial Work Committee.

When Xi Jinping came to power in 2013, while the Two Sessions were in session, Fang Xinghai submitted a long letter stating his willingness to contribute to the development of the national financial industry. Six months later, in September 2013, he moved to Beijing as an inspector for the First Economic Group of the Office of the Central Leading Group for Financial and Economic Affairs. In June 2014, he was promoted to director of the Fourth Economic Bureau. In October 2015, three months after the stock market crash, he took the seat of vice chairman of the CSRC.

So this chain must be made clear: Zhu Rongji's system created him, and Xi Jinping gave him his positions along the way.

Now let's talk about Wen Jiabao. During the years Wen Jiabao was premier, what he couldn't stand was this group of people from Zhu Rongji's era: short-selling, quantitative trading, and information asymmetry, turning the stock market into a pump that sucked money out of the pockets of ordinary people. But at that time, Hu Jintao's policy was to unite the majority, so Wen Jiabao had to turn a blind eye and endure it for ten full years.

Now, no one is stopping him. Over the past year, it wasn't just Fang Xinghai who fell in the financial sector: Yi Huiman, former chairman of the CSRC; Yu Xiaoping, former vice president of the People's Insurance Company of China; Wang Wenling, deputy director of the National Social Security Fund; Zhou Liang, deputy director of the National Financial Regulatory Administration; Yi Lianhong, deputy chairman of the NPC Financial and Economic Affairs Committee; Xu Yiding, vice president of the Agricultural Development Bank of China; Hou Weidong, former vice president of the Bank of Communications; and Lin Jingzhen, former vice president of the Bank of China.

And these are just the ones whose names we can count. This list includes both Zhu Rongji's people and Xi Jinping's people. Zhou Liang was Wang Qishan's chief secretary, and Yi Huiman was part of the Zhejiang faction; neither side was spared.

Therefore, the great purge of the financial system over the past year or so is not just about cleaning up Xi Jinping's former subordinates; it is about uprooting the entire financial system. Fang Xinghai was just the only one in that year who didn't know he was going to fall; when he was taken away by the Central Commission for Discipline Inspection, he still thought it was a mistake.

Earlier, we said that taking Fang Xinghai in was equivalent to detaining someone who knew how to move money abroad. Money from red families going abroad is not the same as ordinary people going abroad.

If you want to move your family's money out, you take your passport to the bank to exchange a few thousand dollars, sign the paper, and it's done; your name is left openly on the document. But for the son of a member of the Standing Committee, if he wants to move billions out, what he fears most is his name being left on that piece of paper.

So this money has to change names several times along the way. First, the money must be turned into a business; it is put into a company, a fund, or a deal, and on the books, it is a legitimate investment, merger, or trade.

Second, this company is listed in Hong Kong, or has a brother entity in Hong Kong, and the money is invested abroad from there in a legitimate way, with all the exit procedures in perfect order. Third, once the money is abroad, it is handed over to foreign banks, lawyers, and accountants to manage, and from then on, it is no longer on China's books.

The last name left on paper is usually a company set up on some small island, or a person holding things on your behalf. The true owner is hidden in the innermost layer; you peel back one layer only to find another, and even if you reach the very bottom, you still cannot see who it is.

And what Fang Xinghai was in charge of at the China Securities Regulatory Commission (CSRC) were precisely these gates. When Chinese companies wanted to go public in Hong Kong or abroad, they had to pass through him; when foreign brokerages and funds wanted to enter, or Chinese ones wanted to go out, they had to pass through him.

How these transactions were recorded in the books, and whether family relationships needed to be disclosed—all had to pass through him. When money went offshore, which foreign banks were entrusted to oversee it—that, too, passed through him. He sat beside these four gates for nine years.

Of course, he did not have to sign off on every single cent that left the country, but having sat in that position for nine years, it is impossible that he did not see who was coming and going, and what paths they were taking.

He likely had several lists in his mind: which brokerages, banks, and funds were handling business for the same group of people year after year; which Hong Kong company transactions had buyers and sellers on the contracts who were not the actual recipients of the money; which accounting firms and law firms specialized in setting up shell companies on those small islands for China's powerful elite; and which funds were routed out through business deals before finally landing in the innermost box.

It was precisely on the day he was reported, July 24, that the Ministry of Finance and the State Taxation Administration jointly issued a notice stating that offshore trusts would be subject to personal income tax.

On the surface, the notice mentioned a 20% tax rate, but the real power of this announcement lies not in the 20%, but in forcing you to fill out the forms yourself: Is this box yours? What is your relationship with the beneficiaries inside? Are the assets inside yours?

Once you admit it is yours, the next question becomes unavoidable: Where did these assets originally come from? How were they moved offshore? Which company, which fund, which bank, and which lawyer running errands for you did they pass through?

The tax authorities are responsible for making the owners acknowledge the boxes, while people like Fang Xinghai are responsible for telling the investigators which paths these boxes took when they were moved out.

This is precisely why Fang Xinghai is valuable. If you only investigate the boxes, you only know where the money ended up. If you want to trace how the money was moved out, you have to investigate the brokerages, listed companies, funds, audit reports, and merger contracts—and these are exactly the areas he managed for nine years.

In early 2014, a group of foreign journalists obtained a batch of leaked documents—internal data from companies registered on those small islands. The portion related to China revealed over 22,000 clients from mainland China and Hong Kong, including heads of state-owned enterprises, deputies to the National People's Congress, high-ranking officials, and relatives of members of the Politburo Standing Committee.

Major state-owned enterprises like PetroChina, Sinopec, and CNOOC also opened a large number of companies on those islands. The files also revealed the name Deng Jiagui, who is Xi Jinping's brother-in-law. He, along with brothers Li Hua and Li Xiaoping, opened a real estate company together in the British Virgin Islands.

Shortly before these files were exposed, the Li brothers' Excellence Group spent 12.369 billion yuan in Qianhai, Shenzhen, to acquire two commercial plots of land, which were known at the time as the "Qianhai Land Kings."

So, with such a major event, why did it only cause a stir for a while and never turn into a formal case? Because the leaked files could only tell you one thing: a certain person's relative once had such a company under their name. It could not tell you which domestic transaction the company's money came from, which brokerage handled it, which merger it was, which audit report covered for it, or who at the regulatory gate gave it the green light.

From everyone knowing they are rich, to knowing exactly which transaction belongs to whom and who to go after next, the gap in between is filled by people like Fang Xinghai.

Here, one question must be answered first: Why didn't Wen Jiabao move against Li Qiang? The arrests have not stopped for over a year, with people being taken in one by one. Li Qiang is the current Premier, promoted by Xi Jinping himself, and his position is the most conspicuous, yet he still sits in that chair at the Great Hall of the People today, holding meetings and reading reports, and no one has touched him.

Moreover, if they wanted to move against Li Qiang, there is a ready-made path. Wu Zhenglong is Li Qiang's only trusted aide in the State Council, serving as the Secretary-General of the State Council—a position that, frankly, is the Premier's chief steward. People outside the firewall have long been saying that this person might one day enter the doors of the Central Commission for Discipline Inspection. If they really wanted to act, they could just take down Wu Zhenglong first, and by tracing the accounts upward, they would reach Li Qiang, and there would be no procedural flaws to pick at.

But Wen Jiabao did not do that, because he does not have a second Premier in his hand. Hu Chunhua is 63 this year; he could easily take over as General Secretary at the 21st Party Congress, but in the row below the General Secretary—the Premier, the Chairman of the NPC, and the Chairman of the CPPCC—there is not a single suitable candidate.

Hu Jintao and Wen Jiabao are both 84, and Wang Yang is 71. On the reformist side, they suffered a major setback in 1989, and with the passing of Li Keqiang in recent years, there is not enough of a cadre reserve.

Therefore, regarding Li Qiang, what Wen Jiabao can do is not to remove him, but to keep him in check. This is the first card laid out for Li Qiang to see.

As Premier, Li Qiang actually has nothing to account for regarding the economy. When he cannot talk about real estate, local government debt, or consumption, the sudden rise of DeepSeek in 2025 answered the most difficult question for him: With the economy in such a state, why is he still sitting in that position?

Now that Fang Xinghai has been detained, Liang Wenfeng halted that round of financing with a valuation of 71 billion USD the very next day. What DeepSeek has already created still exists, but it can no longer continue to grow by relying on new money, new valuations, and next-generation models.

To put it bluntly, this is telling Li Qiang: The seat is yours, you continue to work, but do not use the AI industry to build up your own capital for succession.

That person who has long been releasing news about his succession, personnel arrangements for the Fifth Plenary Session, and inside information from the General Office of the CCP Central Committee overseas, has almost simultaneously refused to speak fully. Whether the loudspeaker went silent on its own or was pressed by someone, I cannot say for sure. But the fact that a channel for building momentum for someone was cut in half at this critical juncture is a message in itself.

The second card is laid out for those few elders to see. On June 30, 2025, the Political Bureau held a meeting to deliberate on the "Regulations on the Work of the Decision-making and Consultative Bodies of the CCP Central Committee," but the composition of the body was not announced.

However, according to leaks from outside the Great Firewall, this body consists of seven people: Wen Jiabao is the head, and the other six are Li Ruihuan, Zeng Qinghong, Wang Yang, Xi Jinping, Zhao Leji, and Li Qiang.

Look closely at this table: Zeng Qinghong is sitting there, Li Qiang is also sitting there, and Wen Jiabao is in the main seat. Therefore, Wen Jiabao does not need to issue documents or hold meetings to announce anything. As long as he keeps Fang Xinghai detained, those at the table will do the math themselves.

This person has managed cross-border funds and wealth management for nine years; the account book in his head can certainly implicate the conservative faction of the CCP. You conservatives, do not hide behind Li Qiang and continue to call the shots, and do not think that once Xi Jinping steps down, your past financial problems will be automatically sealed.

The third card is laid out on the negotiating table of the Fifth Plenary Session. There are four things to be priced at the Fifth Plenary Session: at what level the liquidation of Xi Jinping will stop, who will succeed him, whether Li Qiang will remain, and how deep the investigation into those overseas accounts will go.

These four things were originally priced unilaterally by that group of conservative elders. Now they are not, because Wen Jiabao has an entry point in his hands that can be followed downward.

Wen Jiabao's strategy over the years has always been this: no need for a showdown, but you must let them know he holds the cards. During the 2024 National Day, a group of veterans suddenly made a high-profile appearance, which was equivalent to announcing that the elders could communicate freely.

In March 2025, the heads of the Organization Department were swapped, and the person in charge of cadres was changed. Later, Ma Xingrui, a member of the Political Bureau, was used as a sacrifice to show everyone below. By the end of March this year, he appeared in Beijing again under the protection of the military.

Therefore, Wen Jiabao's psychological warfare within the CCP has been wave after wave, but he has never used force from beginning to end. This blow to Fang Xinghai follows the same pattern; it is not a verdict, but a notice.

However, there is a nuance here that must be told to you: Hu Jintao and Wen Jiabao do not want the same thing.

Hu Jintao's idea is to only liquidate the Fujian Gang; killing the chicken to scare the monkey is enough. As for the series including Jia Qinglin, Chen Xi, Cai Qi, He Lifeng, Wang Xiaohong, Huang Kunming, and Zheng Shanjie, as for the Shandong Gang, Zhejiang Gang, Shaanxi Gang, Tsinghua Gang, and Military-Industrial Gang, they should be screened one by one, and those without major problems should be retained.

What he wants is to protect the Party and stabilize the situation. Wen Jiabao wants more than that. He has said that he would die with regret if he did not carry out political structural reform. He knows very well that if only the financial sector is cleaned up, even if reformists are put in place, it will still be corrupt and rotten in a few years.

So these three cards are laid out, and the people watching are not just Li Qiang, nor just those few conservative elders. One card is specifically left for Hu Jintao to see: If you want to stop after investigating the Fujian Gang, I have another path here that can be investigated further.

Fang Xinghai guards the gates through which money leaves the country; he knows which transaction was transported along which route back then. So, first bring him in. Li Qiang cannot be moved for the time being, the seat is left for him, and the sign still says Premier, but from now on, if he wants to transfer someone or approve a sum of money, someone must nod for him first.

The truly heavy stuff is yet to come. The accounts that those conservatives have placed overseas—which transaction came from where, whose hands it passed through, and whose name it finally fell under—this is the book that Wen Jiabao intends to bring to the table at the Fifth Plenary Session this autumn.

He doesn't necessarily have to actually open this ledger and make those people worry about it every single day. So, the only thing he needs to do now is to make those people clearly understand that he has this thing in his hands, and he can open it whenever he wants.

Alright, this is Jiang Feng Vision, see you in the next episode.