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China has appointed a Western-trained risk firefighter to head its central bank, but the move is expected to bring some certainty to markets as President Xi Jinping overhauls financial sector oversight. It is
The People’s Bank of China announced on Saturday that Pan Gongsheng has been appointed as the bank’s Communist Party governor to replace Guo Shuqing.
The party leader is the most powerful political position within the bank and can wield greater influence than the governor. Pang is also expected to be announced as the next bank governor, succeeding Yi Gang, who has held the position for more than five years.
“This appointment will give the market some reassurance about the continuity of the election of China’s top central bank governor,” said Cheng Long, co-founder of Beijing-based research firm Plenum. . “Among all candidates, [Pan] The person who knows the market best and the market knows it best. ”
The appointment of Mr. Pang as governor of the People’s Bank of China (PBOC) is being hastily considered as he turns 60 next week, the unofficial retirement age for many Chinese officials, according to people familiar with the matter.
The bank announced on Saturday that Mr. Guo and Mr. Yi had resigned from their party posts.
The central bank restructuring comes as the world’s second-largest economy struggles to recover from a three-year pandemic lockdown.
The initial recovery in the first quarter, the disappointing economic data in the second quarter, and the weakening outlook have prompted speculation that the Chinese government will unleash additional monetary and fiscal stimulus to boost growth. Expectations are rising. China’s currency, the yuan, is also trading near a seven-month low against the dollar.
Pan is a household name in international finance. He has been a deputy governor of the People’s Bank of China since 2012, a role that has seen him interact with the media, Western financial institutions and regulators. Since 2016, he has also headed China’s foreign exchange watchdog.
Pang completed his postdoctoral studies at the University of Cambridge and was a Senior Research Fellow at Harvard University.
He also received training at UK-based Standard Chartered, where he is a research expert, according to an online profile of the National Center for Financial Research at Peking University.
He also holds a PhD in Economics from Renmin University of China.
Over the past 30 years, Mr. Pang’s experience has spanned foreign exchange, bond and real estate lending regulation, cryptocurrency regulation, and state bank reform.
Pang’s inauguration was reported Saturday by The Wall Street Journal.
His reputation as a financial risk firefighter was built on his help in curbing the capital flight that destabilized the financial system in the mid-2010s.
But Mr. Ban’s appointment comes amid concerns in some markets over the PBOC’s waning influence.
Plenum’s Cheng added that Pan’s appointment is unlikely to bring about a major change in China’s monetary policy as the central bank has weakened after the government overhauled its financial regulatory structure in March. .
Xi, who is entering his third five-year term as president, in March established a new national financial watchdog to oversee all financial activity except the securities industry.
Under the new regulatory regime, the central bank will lose some power over financial holding companies, including Jack Ma’s Ant Group.
A new Communist Party-led commission, the Central Financial Commission, has also been set up to strengthen Xi’s direct control over the sector, experts say.