Who are the front runners to take over China’s central bank?
The new governor of the People’s Bank of China (PBOC) – to be announced next Monday – will be handed more power but will also embrace a challenging mission to carry on and finish ongoing reforms on interest and exchange rates, while maintaining stability and adapting to a bigger global role.
In its biggest government structure revamp in history, China’s State Council (the country’s cabinet) on Tuesday proposed merging its current banking and insurance regulators into one while moving part of their functions, including drafting key regulations and prudential oversight, to the PBOC, the country’s central bank.
Some 3,000 legislators from all walks of China are to discuss the candidates for the governorship on Sunday.
Analysts said the dramatic shift will largely raise the PBOC’s status, while making the banking and insurance regulators executors of policies, now to be set by the bank.
“By shifting power to the PBOC, it will help avoid conflicting policy signals sent from different regulators, and other problems brought about by cross regulation,” said Ma Jun, former chief economist at the People’s Bank of China’s research bureau.
The final shortlist of front runners to win the bank’s top role are current Politburo member Liu He, the top economic adviser and close ally to President Xi Jinping, Yi Gang, the PBOC’s current deputy governor and de facto major policymaker, and Xie Fuzhan, a veteran economist and now party chief of central China’s Henan province.
Liu, 66, is widely expected to become vice-premier, in charge of economic and financial affairs after the National People’s Congress (NPC).
That would put him on a par with Zhu Rongji, known for his tough approach to tackling what some saw as the economic chaos, when he was vice-premier and central bank governor between 1993 and 1995.