Former China Life President Yang Chao was investigated 14 years after his retirement. China's financial crackdown has intensified, leveraging the dissolution of the real estate bubble to scrutinize financial corruption and capital outflows from the outside in.

China Life is considered the largest reservoir in China's financial industry, involving reserve funds of $800 billion. By 2025, it successfully surpassed Germany's Allianz to become the world's largest insurance company.

During his tenure from 2005 to 2011, former President Yang Chao completed the company's share reform and listing, as well as accelerated overseas expansion.

While successfully building a financial carrier for China's insurance industry, he also promoted a large faction loyal to him, spread across various financial and insurance sectors.

The insurance industry is the foundation of the financial sector, serving as a reservoir, and it has also added an extra layer of leverage to the real estate sector due to its nature.

According to the original "script," China's real estate market might follow a similar pattern to the US subprime mortgage crisis of 2007, where financial liquidity issues could trigger the collapse of the financial system, leading to a real estate crash.

However, this time China's real estate "unexpectedly" crashed, causing external risks to trigger internal vigilance within the financial system. As a result, efforts that were already intense due to anti-corruption measures have been further intensified.

The most common points of corruption in the insurance industry are twofold: credit guarantee policies and insurance funds flowing out through various "relationship" companies, earning large commissions while causing capital outflows overseas.

One form of corruption involves increasing financial leverage, which raises financial risks; the other involves guiding capital outflows. The current strict investigations are also a self-check of China's financial system triggered by the real estate crisis.

Yang Chao's investigation is just a signal; most of his associated network may also be implicated. This marks a severe purge of China's insurance and financial industry.

During an economic downturn, proactively cracking down on and preventing financial risks is beneficial, ensuring the stability of the financial foundation, reducing leverage, but caution is needed to avoid overly rapid investigations that could cause temporary liquidity shortages, credit contraction, and decreased risk appetite.