China in economic reshuffle
LESS than four years ago, Guo Shuqing seemed like yet another economic reformer who had tried to bring market-oriented changes to China’s fraud-ridden and heavily politicised financial system only to see his career sidetracked.
During just 17 months as the chairman of China’s top stock market regulator, he issued 80 major directives, trying to stop chronic insider trading, curb market manipulation and remove barriers for foreign investors, earning him the nickname Whirlwind Guo. Then, he was gone, sent south to coastal Shandong province as the acting governor.
Now Guo has returned to Beijing to tackle an even bigger problem: the murky, debtladen Chinese banking system.
On Friday, the state news media said that he was named chairman of the China Banking Regulatory Commission, succeeding Shang Fulin, who had reached the mandatory retirement age of 65.
Guo’s assistants declined interview requests on Wednesday and Thursday but said on Friday that he no longer worked in Shandong.
Guo’s appointment offers a sign that China is taking a financial overhaul seriously. The stakes are high: Experts widely believe that China’s weak financial system is holding back its economy, the world’s second largest.
Guo faces an immediate challenge in r e a s s e r t i n g t h e authority of the banking commission, also known as the CBRC. The Chinese central bank has clawed away from banking regulators a considerable part of their authority to oversee whether banks are lending prudently. The central bank has also played an increasingly critical role in fighting money laundering and capital flight.
“An appointment as the head of the CBRC today is not as significant as the same appointment five years ago because the People’s Bank of China has taken over many of the regulatory oversight tasks,” said Victor Shih, a specialist in Chinese finance at the University of California at San Diego.
Meanwhile, China has replaced its commerce minister and the head of its top economic planning body, state media said on Friday, as the country grapples with mounting financial pressures.
Huge debt, plunging outbound investment and capital flight are troubling the economy.
China is also having to contend with the hawkish rhetoric of US President Donald Trump, who has repeatedly accused it of currency manipulation and stealing American jobs.
Zhong Shan will become minister of commerce and He Lifeng takes the reins at the National Development and Reform Commission, the official Xinhua news agency said, without giving further details.
Zhong was deputy governor of Zhejiang when he grew close to Xi, who was the province’s Communist Party chief between 2002 and 2007.
Five years later, Zhong went to Beijing to be vice commerce minister.
He’s ties to Xi go back decades, to the 1980s, when the now head of state was deputy mayor of Xiamen.