PBOC Retirement Hint Puts Focus on Race for Successor

PBOCA man walks past the People's Bank of China (PBOC) headquarters in Beijing, China. Photographer: Tomohiro Ohsumi/Bloomberg
  • PBOC Retirement Hint Puts Focus on Race for Successor

The question of who’ll be the next leader of the People’s Bank of China has gained urgency after Governor Zhou Xiaochuan dropped heavy hints that he’s ready to head into retirement.

Announcements about changes in the PBOC leadership could come at any time. With President Donald Trump mulling who will be the next chair of the Federal Reserve and the Bank of Japan’s Haruhiko Kuroda’s term expiring in April, the world’s major monetary authorities could be in for an era of major change.

Even though China’s central bank lacks the independence of its global peers, the government’s pick for the top job still matters, as Zhou’s influence over the nation’s financial opening-up during the past 15 years shows. His successor undoubtedly will have to craft policy mindful of the nation’s record debt load and an economy that’s on a long-term slowdown.

Here are five potential contenders to replace Zhou, 69, should he step down, listed in alphabetical order.

Guo Shuqing

The China Banking Regulatory Commission chairman combines political heft with top-level financial industry experience. His resume includes stints as governor of Shandong province, chairman of China Construction Bank Corp. and head of the nation’s securities regulator. He served at the central bank before, too, as deputy governor between 2001 and 2005, simultaneously running the State Administration of Foreign Exchange.

Many consider Guo a reformer in Zhou’s mold. Under Guo, the CBRC advanced the broader crackdown on foreign investments by China’s top dealmakers in June, when it asked banks to detail loans to such companies as Anbang Insurance Group Co. and Fosun International Ltd.

Jiang Chaoliang

The party chief of Hubei province in central China and a former chairman of two state-owned banks, Jiang isn’t new to the PBOC. He led the Shenzhen and Guangzhou branches during the Asian financial crisis years, and he worked there during the collapse of Guangdong International Trust and Investment Corp., China’s biggest-ever corporate bankruptcy at the time.

Jiang was promoted to assistant governor in 2000. He served as chairman of two state-owned lenders — Bank of Communications Co., where he led an initial public offering of Hong Kong-listed shares and forged a partnership with HSBC Holdings Plc; and Agricultural Bank of China Ltd., where he started his career.

Liu He

A longtime member of Xi Jinping’s inner circle, Liu’s influence primarily occurs behind the scenes as director of the Communist Party’s Office of the Central Leading Group for Financial and Economic Affairs. He’s also vice chairman of the National Development & Reform Commission, the government’s top economic planning body.

Though Liu avoids the public spotlight, the Harvard-educated economist has played a pivotal role in the relationship between China and the U.S. As global markets cratered in 2009, then-U.S. Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers separately made time to meet with Liu, who was seen as a link to China’s top leaders, Bloomberg News reported.

Liu Shiyu

Liu, born in 1961, took charge of China’s securities regulator early last year, tasked with restoring investor confidence after the stock-market meltdown of 2015. Using language atypical of China’s political elite, he vowed to take on the “crocodiles” and “barbarians” of the markets, and during his tenure the government imposed heavy fines on market manipulators.

He joined the PBOC in 1996 and became deputy governor in 2006, according to an official biography. Before that he worked at China Construction Bank Corp. and the nation’s economic reform commission. He earned a master’s degree from the economic management school of Tsinghua University in Beijing.

Yi Gang

Like Zhou, Yi is a fluent English speaker with longstanding links to global economic leaders and a similar reputation as a reformist. Yi joined the central bank in 1997 and served in a succession of roles before being promoted to deputy governor in 2007.

Yi was administrator of the State Administration of Foreign Exchange from 2009 until 2016. As head of the currency regulator, he presided over expansion of the world’s largest foreign reserve stockpile, which peaked in 2014 at nearly $4 trillion; further loosening of currency trading restrictions; and greater emphasis on increasing the yuan’s international use.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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