China investigates ‘princeling’ amid crackdown on finance industry

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Chinese authorities are investigating the financier son of Liu He, a former vice-premier and confidant of Xi Jinping who negotiated a trade deal with the first Trump administration, according to people familiar with the probe.

Seven people familiar with the investigation said Liu Tianran, whose father served as China’s economic tsar, was under investigation. Two people said the probe was related to suspected financial-related corruption.

One of the many “princeling” children of top party officials, Liu founded an investment firm called Skycus Capital in 2016 and served as its inaugural chair. The Financial Times previously confirmed that he is Liu He’s son.

One former colleague of Liu Tianran said he had been “under investigation for a while” and “might have lost his freedom”, meaning he may have been arrested. A second person said he had already been detained. Two other people said he had been investigated for at least six months.

One of the people who said the probe was over suspected corruption said Chinese authorities had first looked into Liu Tianran in connection with the planned $37bn initial public offering of Ant Group, which was set to become the world’s biggest IPO until Beijing stopped it from going ahead.

During the probe, authorities found unrelated cases of corruption, according to the person who added that Xi, China’s president, had been given a report on the claims.

The probe comes as Xi has cracked down on the Chinese finance industry, including cutting pay for bankers and scrutinising the fundraising and dealmaking of many top funds. Some high-profile Chinese venture investors have been questioned, and even detained, over their fundraising, including Chen Datong, a top semiconductor investor.

“If true, Liu’s case would be consistent with a new form of investigation Xi authorised in recent years,” said Christopher Johnson, a former top CIA China analyst who now heads China Strategies Group, a risk consultancy.

“These investigations, which focus on illicit gains by associates of senior Chinese leaders, put their targets in a sort of no man’s land between a clean slate and formal detention,” he added. “In general, these officials can avoid arrest if they return their ill-gotten gains to the state, but the scale of Liu’s alleged wrongdoings may test the limits of that arrangement.”

Dennis Wilder, former head of China analysis at the CIA, said the probe suggested Liu He might face problems. Liu regularly met foreigners after retiring in 2023, including with then-Treasury secretary Janet Yellen in April 2024. But his meetings have been severely curtailed over the past year.

“Liu has been on a very tight leash,” said one person familiar with the situation, who added that some people who were aware of the investigation into his son had assumed that his low profile was related to the probe.

Wilder added that Liu appeared to have fallen out with Xi, a childhood acquaintance.

“Given Liu He’s political problems and his lack of access to Xi Jinping, he no longer has the political clout to protect his son,” said Wilder, a professor at Georgetown University and former top White House Asia official.

The FT was unable to reach Liu Tianran for comment but one person close to him rejected the allegations outlined by the FT as being “not based on facts and totally untrue”. Liu He and Skycus did not respond to a request for comment.

Corporate records seen by the FT showed that Liu Tianran formally stepped down as chair at Skycus in April 2017, six months before his father was promoted to the Chinese Communist party’s 25-member politburo.

Liu He was later appointed vice-premier and given responsibility for overseeing the financial sector. Chinese government rules bar the children of top cadres from managing companies in sectors regulated by a parent.

In 2021, people close to Skycus’s operations told the FT that Liu Tianran — who also uses the English name Andy — had continued to work on deals for the firm after stepping back as chair and transferring his shares.

Business records show that Skycus funds raised money from many state groups, including the country’s largest policy lender China Development Bank, telecom group China Mobile and Industrial Bank Co.

In addition to taking in money from tech giants such as Tencent and JD.com, Skycus also invested in their spun-off business lines.

Liu Tianran began his career as a journalist at the Economic Observer, a Chinese business newspaper. He later worked at CCB International, an arm of a big state bank, before joining a Shanghai government-backed fund. In 2016, he founded Skycus — or Tianyi Ziteng asset management in Chinese.