Analysis | Who are the front runners to take over the driver’s seat at America’s biggest creditor?
There’s a favourite, a possible and an outsider, but all have the same mission in mind: to finish ongoing reforms on interest and exchange rates, while maintaining China’s stability and adoption of a bigger global role
The new governor of the People’s Bank of China (PBOC) – to be announced next Monday – will be imbued with more power to extend the country’s ongoing programme to liberalise interest and exchange rates, juggling those reforms with the challenge of maintaining stability and adapting to a bigger global role.
In the biggest revamp in government structures since the establishment of the People’s Republic, the State Council - China’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 central bank. Some 3,000 legislators are scheduled 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 the 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 central bank’s research bureau.
The final shortlist of front runners to win the bank’s top job are current Politburo member Liu He, the top economic adviser and close ally to President Xi Jinping, the PBOC’s current deputy governor Yi Gang and de facto major policymaker, and Xie Fuzhan, a veteran economist and now party chief of central China’s Henan province.
