Guo Shuqing (郭樹清), head of China’s new regulator for the banking and insurance sectors, can be expected to also be installed soon in the role of Chinese Communist Party (CCP) chief of the People’s Bank of China (PBOC), two sources with knowledge of the matter said yesterday.
Unlike other central banks in the world, the Chinese bank is not fully independent. While its governor can be expected to manage the bank’s daily operations, its party chief is the ultimate boss.
An announcement on the appointment of Guo, who only became chairman of the China Banking and Insurance Regulatory Commission last week, to the position in the central bank is likely to be made this coming week, a third source said.
PBOC Governor Yi Gang (易綱) only took over last week.
His predecessor, Zhou Xiaochuan (周小川), served as both the bank’s governor and party chief for 15 years, but Yi is widely regarded as wielding far less political clout than Zhou.
Sources familiar with the matter said Yi, a US-educated economist, was likely to manage the bank’s day-to-day operations.
The New York Times, which earlier yesterday reported that Guo had been appointed to the top PBOC post, said he would outrank Yi, adding that in the Chinese system the governor is responsible for running the central bank, but the party chief has the final say on strategic decisions.
Guo’s strong political and financial background will enable him to effectively coordinate policy between the bank and the new banking and insurance regulator, the first two sources said.
The bank’s new party chief has a reputation as a heavyweight reformer.
As head of the China Banking Regulatory Commission, he started what was widely dubbed a “regulatory windstorm,” implementing a flurry of new measures to tackle the sector’s most complex problems.
Meanwhile, Yi yesterday outlined sweeping plans to rein in rising debt and financial risk, but expressed confidence that Beijing can prevent potential dangers.
High debt levels for Chinese state-owned companies, local governments and households are “still a challenge,” he said at an economic conference.
Regulators will “deepen regulatory system reform and enhance its resilience against systemic risk,” Yi said.
Additional reporting by AP
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