CHINESE central bank governor Zhou Xiaochuan, an advocate of pro-market financial reforms, might lose his job in a reshuffling that had followed internal battles over overhauling the economy, the Wall Street Journal reported on Wednesday.
President Xi Jinping was considering replacing Zhou, it reported, quoting officials with knowledge of the plans.
The paper said that the top contender to head the People’s Bank of China (PBOC) was Guo Shuqing, a former banker and securities regulator who is currently governor of eastern Shandong province, adding that Xi wanted more allies in top government, military and Communist Party positions, and personnel changes were expected around a major party meeting next month.
It added that no final decision had been made about the central bank post. In a statement to the Wall Street Journal, the PBOC said Zhou would not be stepping down soon.
When asked by Reuters yesterday whether Zhou was leaving the central bank, the PBOC said: “There is no such thing.”
In response, a spokeswoman for Dow Jones, which publishes the Wall Street Journal, said it stood by its story.
Zhou, who has led the central bank for the second-largest economy since 2002, has been the architect of broad financial reforms that have spawned fledgling capital markets, liberalised some interest rates and broken the peg between China’s yuan and the dollar.
Christian Lundblad, a professor of finance at the University of North Carolina at Chapel Hill, said if Zhou left it would increase uncertainty about whether China wanted to slow the pace of reforms designed to open the economy.
“If this means they are going to be moving away from that in the face of concerns about a slowdown [in economic growth], I’m disappointed,” Lundblad said.
Zhou was reappointed as the PBOC chief in March last year, although he had already reached the normal retirement age of 65 for cabinet-ranked Chinese officials.
China’s economy has stumbled in recent months and is at risk of falling short of the government’s 7.5 percent annual growth target, raising investor expectations that policymakers would further loosen fiscal and monetary policy to stoke growth.
However, senior leaders, including Premier Li Keqiang, have publicly ruled out any dramatic policy easing, saying China cannot always depend on easy credit to lift its economy. Instead, he said authorities would only make “targeted” adjustments in the economy as needed. The central bank has refrained from steering public expectations about its next move. – Reuters