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China to Name Reformer as PBOC Party Secretary -- Update

25 Mar 2018 12:07 pm
By Lingling Wei 

BEIJING -- China has picked a reform-minded financial regulator to be the party secretary of the central bank, according to people familiar with the matter, a move that could bolster momentum for financial overhauls.

Guo Shuqing, who is also chairman of China's newly combined banking and insurance regulatory commission, is to be appointed the party secretary of the People's Bank of China, the people said Sunday.

Mr. Guo, a veteran financial regulator who had also served as the nation's top securities regulator, will work closely with the newly-appointed PBOC Governor, Yi Gang, in helping map out China's financial policy.

Unlike Western central banks such as the U.S. Federal Reserve, the PBOC isn't independent and answers to the top leadership. Zhou Xiaochuan, who just stepped down as PBOC governor after a 15-year reign, had long acted as an advocate of sorts for market-oriented changes such as letting banks decide deposit and loan rates and making it easier for money to move across China's borders.

Beijing, in an unusual move, has decided to split the roles of PBOC party chief and governor. One consideration for the step, said the people, is the fact that Mr. Yi, the governor, doesn't hold full membership on the Communist Party's Central Committee. That position is generally required for the PBOC party chief. Mr. Guo is a full member of the committee, while Mr. Yi is an alternate member.

But that doesn't mean Mr. Guo will play a more important role at the central bank than Mr. Yi, the people said.

Messrs. Yi and Guo are known as pro-market reform technocrats within China. "They are a good pair," said an official who knows both.

Mr. Guo's appointment was first reported by the New York Times in a tweet Sunday.

The new roles for Messrs. Guo and Yi come as Beijing tries to beat back risks from an economy and financial sector fueled by debt.

On Sunday, Mr. Yi said at an economic conference that the three major tasks for financial regulators will be to implement prudent and neutral monetary policy, promote further opening of China's financial sector and mitigate financial risks.

Further opening of the financial sector could help ease rising tensions between the U.S. and China over trade. He called rising market volatility in recent days normal, but said that China has to open up its market domestically.

"Gradually we are taking steps to mitigate risks accumulated over the years," he said, adding "We are absolutely in a good position to prevent and mitigate these risks."

Yoko Kubota and

Yang Jie

contributed to this article.

Write to Lingling Wei at lingling.wei@wsj.com
 

(END) Dow Jones Newswires

March 25, 2018 08:07 ET (12:07 GMT)

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