China Central Bank

China is likely to name Guo Shuqing, a key figure in China’s market reform camp as the next central bank governor. Guo, the current chairman of the China Banking Regulatory Commission, is currently ahead of the other candidates for the post including Jiang Chaoliang, the Hubei party secretary; Yi Gang, a deputy governor at the People’s Bank of China and Liu Shiyu, the chairman of China Securities Regulatory Commission said one source, who declined to be named. If the appointment of Guo, 61, who holds similar liberal views to the retiring governor Zhou Xiaochuan, is confirmed in the coming weeks, it will ensure the presence of a well-known market believer in President Xi Jinping’s economic team  a development that could help to shore up confidence that Xi is not totally sidelining market liberalisation. Guo was a deputy central bank governor and the chief of State Administration of Foreign Exchange (Safe), the agency that runs China’s capital control and foreign exchange reserves, from 2001 to 2005.

He became chairman of China Construction Bank in 2005 after his predecessor was toppled for graft. In that role he restarted the bank’s joint-stock restructuring and floated its shares in Hong Kong and Shanghai. “Both Zhou and Guo have a liberal streak in their thinking and both understand market economics very well,” John Wong, a professorial fellow at the East Asian Institute at the National University of Singapore, said. Guo’s experiences in different posts as a scholar, a banker, a provincial governor and a regulator had made him “politically very shrewd”, he said, another critical skill that is needed to navigate the vested interests within the government and to seek compromise and consensus. In the latest institutional move, for instance, China decided to create a financial development and stability committee that is likely to be headed by a vice-premier. The central bank will have an office to run the day-to-day affairs of the agency. “Guo is of the same vein [as Zhou in understanding what China needs],” Fraser Howie, director of Newedge Financial in Singapore, said. “The problem though is, as Zhou states, too much interference and fear from other ministries.”