The surprise shuffles at the top keep coming. Last week, when “whirlwind” Guo Shuqing 郭树清 was tapped to head up a newly combined banking and insurance regulator, we noted that he’d recently been a top contender for governor of the People’s Bank of China, a job that instead went to “low-key regulator” Yi Gang 易纲. But General Secretary Xi Jinping had another idea in mind, and Guo has now been named to the higher-ranking position of Communist Party secretary of the central bank. The previous bank head, Zhou Xiaochuan, served in both roles, in keeping with earlier tradition.
- “Guo has much better political connections” than Yi, the New York Times explained in its report (paywall) that broke the news, as Guo is a full member of the Party’s Central Committee, while Yi is only an alternate member. Both men, however, have “reputations as avid financial reformers who want to address China’s addiction to debt-fueled economic growth.”
- “Guo’s unique role will allow him to coordinate policymaking and implementation between PBOC and CBIRC, and help advance Beijing’s financial reforms,” Reuters reports. Key among Xi’s reform goals are better curbs on financial risk, a task that Guo has demonstrated a willingness to tackle head on.
- “It makes sense, because Guo was the driving force in writing all the new regulations at the CBRC, and the government reorganization gave PBOC powers to write new banking rules,” Andrew Polk of consulting firm Trivium China tells the Financial Times (paywall). “Guo is the rules-and-laws guy. Yi is the implementer of monetary policy,” Polk added.
- In Monday’s announcement, Guo was also named as vice governor of the PBOC, a role that he previously served in from 1998 to 2001. While it’s unusual for one person to serve as a Party chief and deputy head at the same time, it’s not unheard of. Zhang Yesui serves in both roles in the Ministry of Foreign Affairs.
- Both will report to Liu He, the newly appointed vice premier for financial and industrial policy and a trusted adviser to Xi on economic matters. Liu is also charged with managing U.S. relations, including leading discussions on trade. The Wall Street Journal (paywall) reports on the “quiet” negotiations under way between Liu, Treasury Secretary Steven Mnuchin, and U.S. Trade Representative Robert Lighthizer on improving U.S. access to Chinese markets, which could soon include a trip to Beijing by Mnuchin.