China’s bankers get a dose of communism

A crackdown in China is prompting bankers to join the Communist Party [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. President Xi Jinping’s crackdown on private enterprise and push for “common prosperity” has rattled China’s business elite. Perhaps no more so than at China International Capital Corp., the nation’s premier investment bank. The poster child for much of the past three decades of Beijing’s ambitions in global finance is [facing a bitter struggle](. Top bankers have seen their pay slashed by as much as 25% and most bonuses have been close to zero. The group’s international business has dried up, forcing it to scale back its global aspirations and focus on domestic markets. Its once bustling investment banking floors in the capital are now largely empty after 6 p.m. As Xi has tightened control, the firm’s previously high-flying dealmakers are racing to adapt to the new reality. More than 30% of the top bankers are now party members, a move seen as one of the key drivers to getting ahead, instead of snaring deals and new clients. This has sapped both morale and productivity, according to insiders. More broadly, the whole finance industry is in upheaval with pay falling across the board. The nation’s largest financial conglomerates have asked senior staff to forgo deferred bonuses and in [some cases even return pay](. On top of this is a prolonged anti-corruption drive that has ensnared more than 100 officials and regulators. The focus in Beijing is to curb excesses and steer capital toward more productive areas of the economy, rather than into the pockets of bankers. It remains to be seen what broader impact it will have on China and its economy. And if there will be any blowback on Xi. — [Jonas O Bergman]( Global Must Reads Marine Le Pen’s National Rally is trying to outmaneuver rivals plotting to [keep the far right out of power]( in the final round of France’s legislative elections on Sunday. One scenario would see her win an absolute majority that would allow [her party and its allies]( to easily pass legislation, while another would be a hung parliament where President Emmanuel Macron would need to [compromise on a prime minister](. Beijing could end the war in Ukraine with one phone call if it chose to, Finnish President Alexander Stubb told us, reflecting [increasing frustration]( among Ukraine’s allies over Beijing’s perceived support for the war effort. They accuse China of providing the Kremlin with technologies and parts for weapons and helping Moscow to get around international trade restrictions. Chinese and Russian companies are developing an attack drone similar to an Iranian model deployed in Ukraine, European sources say, a sign that Beijing may be edging closer to providing the [sort of lethal aid]( that Western officials have warned against. The Chinese drones have yet to be used in Ukraine, they said. UK opinion polls have been remarkably consistent over the six-week general election campaign: The opposition Labour Party is projected to win, and leader Keir Starmer will be Britain’s new prime minister. Where polls differ is on the scale of victory. Here are some [possible scenarios](, including wildcards, that could unfold tomorrow. Former UK Prime Minister Boris Johnson at a Conservative Party rally in London yesterday. Photographer: Chris J. Ratcliffe/Bloomberg Argentine President Javier Milei defended his assertion that last week’s coup attempt in Bolivia was staged and continued attacks on Brazilian President Luiz Inacio Lula da Silva in a social media post that referred to an unnamed critic as “[an idiot dinosaur](.” While the dinosaur’s identity was never spelled out, Milei and Lula have continually traded public barbs, chilling relations between their two nations. Yemen’s Houthi rebels conducted the largest number of [attacks on commercial ships]( so far in 2024 in June, fresh proof that the threat the group poses to international commerce intensified in recent weeks. A Malaysian court threw out a petition by former Prime Minister Najib Razak to serve out the rest of his [jail sentence in his home]( for a crime related to troubled wealth fund 1MDB. Kenyan police deployed as peacekeepers in Haiti are under [increased scrutiny]( after the shooting of protesters back home in a crackdown on [demonstrations against tax hikes]( highlighted past claims of abuse and harassment. Washington Dispatch With most Americans preparing for the July 4th holiday, Joe Biden will be meeting with Democratic governors as his reelection campaign remains [under siege]( nearly a week after his disastrous TV debate with Donald Trump. Efforts by the president and his advisers to reassure anxious Democrats have failed to ease concerns about his fitness to not only defeat Trump, but to serve a second term. While congressional leaders, top donors and governors haven’t publicly suggested that he step aside for another candidate, Representative Lloyd Doggett of Texas became the first sitting House Democrat to call on him to exit the race. At the same time, new polls showed the president’s [support fading](. In remarks to donors hours after Doggett’s announcement, Biden cited his extensive travel schedule before the debate as a reason for his poor performance. “Didn’t listen to my staff and came back and nearly fell asleep on stage,” he said at a Virginia fundraiser. During the debate, as alarm among his supporters spread across social media, his staff told reporters that he had a cold. One thing to watch today: Minutes of the Federal Reserve’s June meeting are expected to shed light on why committee members lowered their expectations for 2024 rate cuts. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Atomic power producers in France, the UK and Sweden are having trouble finding the hundreds of thousands of welders, engineers and planners needed for reactors they’re building as part of an aggressive blueprint to bolster nuclear fleets for the energy transition. France [finds itself lacking talent]( after its utility EDF ended a decades-long construction spree in the early 2000s, turning the industry into a dead-end career path. And Finally A recent malfunction at a meteorological station in India that overestimated the extent of a heat wave was [another reminder of the difficulties]( around accurately measuring weather extremes in some of the world’s most climate-vulnerable nations. Scrambled readings make it harder to [devise models and policies]( that are key to public health, while poor messaging blurs public understanding of the risks. Boys sit beneath a makeshift canopy in New Delhi on May 28. Photographer: Arun Sankar/AFP/Getty Images More from Bloomberg - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [India Edition](, an insider’s guide to the emerging economic powerhouse, and the billionaires and businesses behind its rise - Explore more newsletters at [Bloomberg.com](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. 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