As China struggles to deal with the slowdown of the world’s second-largest economy, it has embarked on a new strategy of placing financial experts in provinces to manage risks and rebuild regional economies.
Since last year, Chinese President Xi Jinping (習近平) has put 12 former executives at state-run financial institutions or regulators in top posts across the nation’s 31 provinces, regions and municipalities, including some who have grappled with banking and debt difficulties that have raised fears of a financial meltdown.
Only two top provincial officials had such financial background before the last leadership reshuffle in 2012, according to Reuters research.
Photo: AFP
Among the experts promoted is Beijing Vice Mayor Yin Yong (應勇) a former deputy central bank governor, and Shandong Deputy Provincial Governor Liu Qiang (劉強), who rose through the nation’s biggest commercial banks, from Agricultural Bank of China (中國農業銀行) to Bank of China (中國銀行).
Another newly promoted official, Chongqing Vice Mayor Li Bo (李波), had until this year led the central bank’s monetary policy department.
The appointments — overseeing economies larger than those of small countries — would appear to put those officials in the fast lane as China prepares a personnel reshuffle in 2022, when about half of the 25 members of the Politburo could be replaced, including Chinese Vice Premier Liu He (劉鶴), who is leading economic reform while doubling as chief negotiator in trade talks with the US.
“Bankers are now in demand, as local governments are increasingly exposed to financial risks,” said Feng Chucheng, a partner at Plenum, an independent research platform in Hong Kong.
“These ex-bankers and regulators are given the task of preventing and mitigating major financial risks,” he said.
The appointments have come as economic growth has slowed to its weakest in nearly three decades, while government infrastructure investment has fallen.
Five regional banks were hit with management or liquidity problem this year, raising the prospect of devastating debt bombs lurking in unexpected corners.
“We need to be well-prepared with contingency plans,” Xinhua news agency said after a major annual economic meeting headed by Xi this month.
The economy faced “increasing downward economic pressure amid intertwined structural, institutional and cyclical problems,” it said.
With pressures mounting, local governments are expecting to take the lead in managing their financial scares and cutting the cost of rescue with local intervention, analysts said.
“Appointing financial vice governors to provinces can help better integrate financial policies into local practice, and to prevent financial risks beforehand,” said He Haifeng (何海峰), director of Institute of Financial Policy at the Chinese Academy of Social Science, a government think tank.
“Such appointments have also showcased a change of manner in official appointments,” He said.
Financial executives were long shunned for leadership positions.
Banks were nationalized after the Chinese Communist Party took power in 1949 and many bankers were purged during the Cultural Revolution.
Xi started to stress the importance of financial expertise and to elevate the status of executives in 2017.
“Political cadres, especially the senior ones, must work hard to learn financial knowledge and be familiar with financial sectors,” Xi said in a national meeting on financial affairs.
Half of the 12 former financial executives elevated to provincial leadership posts under Xi were born after 1970.
Liaoning Vice Governor Zhang Lilin ( 張酈林), 48, a veteran banker who spent two decades in the nation’s third-largest lender, Agricultural Bank of China, was appointed days after three state-controlled financial institutions announced investment in the then-troubled Bank of Jinzhou (錦州銀行).
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
Artificial intelligence (AI) giant Nvidia Corp’s most advanced chips would be reserved for US companies and kept out of China and other countries, US President Donald Trump said. During an interview that aired on Sunday on CBS’ 60 Minutes program and in comments to reporters aboard Air Force One, Trump said only US customers should have access to the top-end Blackwell chips offered by Nvidia, the world’s most valuable company by market capitalization. “The most advanced, we will not let anybody have them other than the United States,” he told CBS, echoing remarks made earlier to reporters as he returned to Washington
RSS