China has started what is expected to be a major leadership reshuffle by appointing new heads for its three financial regulatory agencies. Although there will not be any immediate policy changes, the appointments are expected to be followed by more reshuffles among top political leaders in the coming year.
The changes, which were announced during the weekend, come at a time when worries are mounting about whether China can avoid a hard landing — thanks to soaring inflation, depressed stock markets and Chinese banks, despite good third-quarter results, that are likely to record big non-performing loans for the coming years after excessive lending.
The most senior appointment among the three was Shang Fulin, former chairman of the China Securities Regulatory Commission (CSRC), who succeeds Liu Mingkang as the chairman of the China Banking Regulatory Commission. Guo Shuqing, former chairman of the China Construction Bank (CCB), took over from Shang as securities regulator, according to the Communist Party Central Committee’s Organisation Department.
In addition, Xiang Junbo, former chairman of Agricultural Bank of China (ABC), replaced Wu Dingfu at the China Insurance Regulatory Commission. The government did not say whether Liu and Wu are retiring.
Rumours about the reshuffle have been in the market for months and, now that they are known, they are triggering further speculation about who will take the top jobs at the two state-owned banks. A spokesman at CCB said the bank has not received any further notice from the government.
The three new regulators are all in their mid- to late-50s, are reform-minded and have achieved a lot in their former positions.
Shang, 59, who was also a former governor at ABC, introduced index futures and margin trading during his tenure at CSRC. He also helped engineer a Nasdaq-style second trading board in Shenzhen and has been a driving force behind the long-awaited international board in Shanghai. Shang was born in Jinan, in eastern China’s Shandong province, and has a doctorate in finance.
Shang’s successor Guo, 55, was a vice-governor of Guizhou province and later rose to the top of the State Administration of Foreign Exchange.
Guo joined CCB in 2005 soon after a government bailout to rescue the bank from collapse after his predecessor was arrested for bribery. Only seven months after Guo took over, CCB went public in Hong Kong through an $8 billion IPO that marked a staggering transformation for the bank and for the country’s financial industry. The bank was listed in Shanghai two years later and became the first state-owned lender to have shares floated in both the A- and H-share markets.
Guo was born in Inner Mongolia, he holds a masters degree in Marxist and Leninist theory.
For many years, ABC had been seen as the most problematic lender in China, known for bad debts and scandals, and seemed an unlikely listing candidate. Xiang told Chinese media that he faced many challenges wiping the slate clean and preparing the rural lender for listing, but the end result was a $22 billion share sale last year that was the world’s biggest IPO at the time.
China also has recently made the appointments of party chiefs for three provinces including Henan, Jiangxi and Anhui, official Xinhua News said.