Tokyo-based Bloomberg columnist William Pesek says current head of the Chinese banking regulator Guo Shuqing is the best choice to replace Zhou Xiaochuan as China’s central bank governor given his strong reformist credentials.
Speculation is rife both in China and abroad as to who will succeed Zhou Xiaochuan as head of the People’s Bank of China when he retires this year following a 15 year tenure.
Writing for the Nikkei Review Pesek says that Guo Shuqing, current head of the China Banking Regulatory, is one of the most likely contenders to succeed Zhou, in a sign that Beijing is intent upon forging ahead with financial sector reform.
Pesek says that 61-year old Guo is a “crusader in the Zhou mould,’ whose varied and extensive experience makes him eminently capable of taming risk in China’s finance and banking sectors.
“Stints as securities regulator, chairman of the China Construction Bank, director of the state office that oversees Beijing’s $3.1 trillion of currency reserves, governor of Shandong province and now CBRC chairman afford Guo uniquely intimate knowledge of the interplay between government, markets, the private sector and the myriad fray zones in between,” writes Pesek.
“Guo would bring to the PBOC his ambitious attack on banking-industry malpractice and zeal for changing policies.
“At CBRC, Guo has led the crackdown on risks in the $38 trillion banking industry and worked to choke off the flow of cash into overheated sectors like real estate…expect a Guo PBOC to accelerate bond-market development both as a means of financing growth and reducing excessive speculation.”
Pesek further points out that China is in urgent need of a highly capable replacement for Zhou Xiaochuan, given the many challenges that the national economy faces in 2018, including Beijing’s ongoing deleveraging campaign, a fraught transition away from debt-fuelled growth, as well as the uncertainty surrounding the Trump administration’s trade and currency policies.
“The flurry of potential hazards zooming Beiing’s way may make 2018 feel more like a decade at PBOC headquarters,” writes Pesek.
“That is why it is heartening to see Xi prioritising continued reform in choosing China’s next central banker.”