Aurelia Butler

BEIJING (Reuters) – Yi Gang’s surprise re-appointment as China’s central bank governor on Sunday means a pro-market mind of high international stature will continue to represent the world’s second-largest economy on the global stage.Yi, 65, was widely expected to retire as President Xi Jinping installs close allies in key roles in a sweeping government reshuffle at the start of his precedent-breaking third five-year term.A new leadership team, formed mostly of home-grown talent loyal to Xi, raises concerns among the international business community amid rising tensions between China and the West over trade, technology, the war in Ukraine and other issues.But Yi retaining his post as the governor of the People’s Bank of China provides some relief as a familiar face, albeit at the helm of a diminished institution, focused mainly on monetary policy after the launch of a new financial watchdog.The PBOC governor has high global exposure through institutions such as the Group of 20, the International Monetary Fund, the World Bank and others.”Yi’s core competitiveness lies in his professional quality and international background,” Xu Hongcai, deputy director of the economic policy commission at the state-backed China Association of Policy Science, told Reuters.”The central bank governor is not a job that can be easily taken over by someone else. We need someone like Yi who can communicate on the international stage, such as G20,” added Xu, who has previously worked at PBOC.Yi reached retirement age and was expected to be replaced after he was dropped out of the Communist Party’s Central Committee in October. Veteran Chinese banker Zhu Hexin, who heads the CITIC conglomerate, was seen as the leading candidate for the top PBOC post.Unlike Zhu, who built his entire career in China, Yi spent more than a decade in the United States, completing his doctorate at the University of Illinois and teaching at Indiana University, making him one of China’s highest-ranking “sea turtles”, as overseas returnees are called.Still, he comes from a humble background, enrolling at the elite Peking University after spending several years in the countryside during Mao Zedong’s “Cultural Revolution”.REFORM-MINDEDYi, who helped implement major currency reforms in 2005 and 2015, has long advocated interest rate and currency liberalisation. In August 2019, the PBOC replaced benchmark bank lending rates with the market-driven loan prime rate (LPR).The 2015 reform led to a wave of capital flight and currency depreciation and China has focused on sealing, rather than opening, its capital account since.Yi has repeatedly cautioned against risks from excessive credit and money growth.Still, China’s debt has risen at a faster pace than its economy in recent decades and is now almost three times as large. Under Yi, the central bank has cut the reserve ratio 14 times since early 2018, pumping more than 10 trillion yuan into the economy.While some economists argue that inflation in China is benign because the economy’s productive capacity has better access to resources, including credit, than the consumers, other economists praise Yi for keeping prices under control.Yi’s main challenge remains to keep an increasingly indebted economy growing, while its population declines and ages, the developed world is on the brink of recession, and geopolitical tensions mount.But analysts say Yi has limited room for more reforms as the Communist Party tightens its grip on the economy.”Yi has been a steady hand in managing policy and the appointment underlines the importance of policy stability,” said a policy insider who spoke on condition anonymity. “The PBOC will continue with its modest easing this year, and the possibility of rolling out big reforms is low.” More

US World Bank nominee Ajay Banga said the lender must do “everything it can” to squeeze more cash from its balance sheet while preserving its gold-plated credit rating, as he set out his credentials on a world tour for a role that involves complex geopolitics.The former Mastercard chief executive’s run at the presidency of the multilateral lender comes as the bank finds itself under sustained criticism for failing to adequately address the scale of the global climate crisis while maintaining its mission to reduce poverty. The bank’s current president, David Malpass, last month resigned from his post almost a year early.Banga said he would seek to attract the private sector to support projects underwritten by the bank, alongside exploring elements of the G20-commissioned report into the so-called “capital adequacy frameworks” of multilateral development lenders such as the World Bank. “The estimates of monetary requirements to deal with these issues from climate change to inequality to pandemics to fragility, are in the trillions,” said Banga.“There is not enough money in the multilateral balance sheet, no matter what we do with the capital adequacy framework, which we must do everything we can with to extract what we can, while preserving our AAA status. But even at the end of that, we are not going to get to those trillions.”The bank made loans, grants, equity investments and guarantees to partner countries and private businesses of $104bn in 2022.The G20-commissioned report, released last summer, said multilateral development banks including the World Bank were potentially being more conservative than they needed to be to maintain their triple-A credit rating from the three big credit rating agencies.Banga insisted maintaining the triple-A rating was a priority. “It’s a very simple thing — if you don’t get the right rating, you don’t get the right low cost of funds, which allows you to be able to do things at the right cost to the receiving countries.”Under his watch, the bank would work with the private sector to share its knowledge about countries, he said. “Multilateral banks can be an amazing way of transferring success about what works well in Indonesia, to what works in Mexico, to what works in Kenya, to what works in another place.”Climate policy experts and developing country officials have privately expressed reservations about Banga’s scant development finance expertise and the shift required for a traditional corporate leader to steer a sprawling bureaucracy run by 25 executive directors who represent 189 member countries.Banga, 63, cited his personal experience of emerging markets in defence of his credentials. “I grew up in India. I lived there. I worked there for the first 14 years of my [corporate] life.”He also sought to allay the concerns of some developing countries that a new focus on climate would come at the expense of other priorities, such as healthcare and education, and might mean less money for the poorest. He viewed climate change and development issues as “intertwined”, he said. “In my trips to Africa . . . at no point did I encounter a conversation that said ‘we don’t care about climate, just give me my health and schools’, because they all are at the receiving end of what’s going on with climate.”

The US dominates the World Bank with a 17 per cent shareholding, followed by Japan, China, Germany, the UK, France, India and Russia. Russia’s Tass news agency has reported that it was consulting “friendly countries” about nominating a rival candidate to challenge the US monopoly over the role since the bank was founded after the second world war.In the face of this, the UK formally endorsed Banga’s candidacy after he met with Chancellor Jeremy Hunt on Thursday. India was among the first countries to express support.Banga was in the Ivory Coast and Kenya this month and will also meet government representatives in the EU, Japan, China and Latin America in the coming weeks. Nominations for the presidency close on March 29, and the bank’s spring meeting will be held in mid-April in Washington. More

The meeting from 11:30 a.m. (0330 GMT) will primarily review and determine the advance and discount rates to be charged by the Federal Reserve banks, the Fed said in a statement.The central bank offered no further details, but the move follows Friday’s collapse of Silicon Valley Bank, was the biggest failure since the 2008 financial crisis. It roiled global markets, walloped banking stocks and left California tech entrepreneurs worrying about how to make payroll. More

BEIJING (Reuters) -China unexpectedly kept its central bank governor and finance minister in their posts at the annual session of the rubber-stamp parliament on Sunday, prioritising continuity as economic challenges loom at home and abroad.President Xi Jinping, who has been installing allies in key roles in a government reshuffle as he begins a third five-year term, broke with convention to retain Yi Gang, 65, as governor of the People’s Bank of China (PBOC) and Liu Kun, 66, as finance minister. Both men have reached the official retirement age of 65.Across the slate of appointments, there were fewer changes than anticipated, with most cabinet ministers keeping their posts. However, further announcements are expected in coming weeks as China implements a reorganisation of its financial regulatory structure and other government bodies. “Opting for continuity in these critical economic roles suggests an emphasis on credibility and stability,” said Mattie Bekink, China director at the Economist Intelligence Corporate Network.”It is also perhaps a tacit acknowledgment of some of the challenges for Beijing at the moment,” she said. “The real challenge for this third Xi administration is whether it will address structural imbalances in China’s economy and undertake reforms necessary to ensure China’s long-term competitiveness.”The government has set a 2023 economic growth target of around 5%, up from 3% last year, which was among the weakest performances in decades.China’s statistics bureau head, Kang Yi, told the parliamentary session on Sunday that China’s economy still contains deep structural “contradictions” and “problems”, according to state media.Chinese policymakers face the challenge of getting the economy back on track after three years of COVID-19 restrictions, weak consumer and business sentiment and increasingly adversarial relations with the West, with many global firms looking to hedge their China exposure.Also on Sunday, China as expected appointed Li Shangfu, who is sanctioned by the United States over the purchase of Russian weapons, as defence minister, and named a slate of four vice premiers, led by Ding Xuexiang, who has long served as Xi’s chief of staff. ‘POSITIVE SIGNAL’The biggest change at the parliament session was the promotion on Saturday of Li Qiang, 63, a longtime Xi confidant, to premier. The former Shanghai Communist Party boss takes a role charged with managing the economy, replacing Li Keqiang, 67, who stepped down after two five-year terms.”The government sent a positive signal to the market by keeping these senior financial experts in the cabinet,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.The U.S.-educated central bank chief Yi, appointed PBOC governor in 2018, had widely been expected to retire after being left off the ruling Communist Party’s Central Committee during the party’s once-in-five-years congress in October.Analysts had anticipated that once Yi and Liu stepped aside, they would be replaced by people with far less international experience. “The U.S. side will be much more comfortable with someone like Yi Gang in charge,” said Alfred Wu, assistant professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore.”It shows China wants to at least have a dialogue with the United States on monetary policy and financial cooperation,” he said. Sources had told Reuters last month that Zhu Hexin, chairman of state-run financial conglomerate CITIC Group Corp, was likely to succeed Yi as head of the central bank.The appointments “indicate that the government put professionalism, management and the art of fine-tuning on the front burner when it comes to picking the central bank governor and finance minister, as positions at the helm of core economic departments need tremendous professional skill,” said Sun Fei, an economist.As expected, Wang Wentao stayed on as commerce minister. Zheng Shanjie, governor and deputy party secretary of Zhejiang province, was approved to take over as head of the National Development and Reform Commission, the powerful state planner.The parliamentary session will end on Monday, with Xi expected to give a speech and Li, the new premier, scheduled to hold a televised media conference afterwards. More

BEIJING (Reuters) – China’s parliament on Sunday approved the cabinet line-up nominated by Premier Li Qiang, who took office on Saturday in a once-in-five years reshuffle. Also during the National People’s Congress (NPC), Xi Jinping was confirmed for a third five-year term as president.Here are other key personnel moves made during the NPC, which closes on Monday.China’s four new vice premiers:Ding Xuexiang, 60, is the first-ranked vice premier who also sits in the ruling Communist Party’s Politburo Standing Committee, China’s top echelon of power. He is a trusted acolyte of Xi, and was Xi’s chief of staff first in 2006 in Shanghai and for the past 10 years in Beijing.He Lifeng, 68, replaces Liu He as the next economic tsar. He is a long-time ally of Xi and was formerly in charge of the National Development and Reform Commission (NDRC), the powerful state planning agency.Zhang Guoqing, 58, has a PhD in economics and spent 20 years working in defence corporations before turning to politics and holding top positions in the provincial-level cities of Chongqing and Tianjin, as well as in Liaoning province. Liu Guozhong, 60, was formerly Communist Party chief of Shaanxi province, where Xi has ancestral roots. China’s five new state councillors, who rank below the vice premiers but above cabinet ministers:Li Shangfu, 65, also becomes the defence minister. He had worked in China’s satellite programme and is under U.S. sanctions over the purchase of combat aircraft and equipment from Russia’s main arms exporter, Rosoboronexport.Wang Xiaohong, 65, also holds the post of public security minister, or police chief. He is considered a close ally of Xi, having worked as a police chief in the city of Fuzhou when Xi was party chief there in the early 1990s.Wu Zhenglong, 58, is secretary-general of the state council and was formerly party chief of Jiangsu province.Shen Yiqin, 63，becomes the highest-ranking woman in China. Observers were surprised when the Communist Party broke with tradition and did not appoint any woman to its 24-member Politburo in October.For the first time in decades there were no female vice premiers as well. Shen, the former party chief of Guizhou province, is the only female state councillor.Qin Gang, 57, is also the foreign minister. The former ambassador to the United States had worked closely with Xi when he was chief protocol officer between 2014 and 2018. The only cabinet-level personnel changes were at the NDRC and the defence ministry. The following cabinet ministers held on to their positions: Yi Gang, 65, unexpectedly stays on as governor of the People’s Bank of China. Yi, appointed as PBOC governor in 2018, had widely been expected to retire after being left off the ruling Communist Party’s Central Committee during the party’s once-in-five-years congress in October.Zheng Shanjie, 61, takes over from He Lifeng as head of the National Development and Reform Commission. Zheng has spent most of his career in his native Fujian province where he had served as director of Fujian Provincial Development and Reform Commission and vice governor of Fujian province.Liu Kun, 66, remains as minister of finance, another surprise since he is past the usual retirement age of 65.Wang Wentao, 58, stays on as minister of commerce. He had served as governor of Heilongjiang province and was once Xi’s colleague in Shanghai.Jin Zhuanglong, 59, stays on as minister of industry and information technology. Wang Zhigang, 65, remains minister of science and technology. Huai Jinpeng, 60, remains minister of education   Pan Yue, 62, remains head of the National Ethnic Affairs CommissionWang Xiaohong, 65, remains minister of public securityChen Yixin, 63, remains minister of state security. Considered a Xi ally, he had worked with Xi when the latter was party chief of Zhejiang province from 2002-2007. Chen was sent to the central city of Wuhan in 2020 to help lead anti-COVID efforts and in recent years led to purge corrupt security and legal officials. Tang Dengjie, 63, remains minister of civil affairsHe Rong, 60, remains minister of justiceWang Xiaoping, 59, remains minister of human resources and social securityWang Guanghua, 59, remains minister of natural resourcesHuang Runqiu, 59, remains minister of ecology and environmentNi Hong, 60, remains minister of housing and urban-rural developmentLi Xiaopeng, 63, remains minister of transportLi Guoying, 63, remains minister of water resourcesTang Renjian, 60, remains minister of agriculture and rural affairsHu Heping, 60, remains minister of culture and tourismMa Xiaowei, 63, remains head of the National Health CommissionPei Jinjia, 59, remains minister of veterans affairsWang Xiangxi, 60, remains minister of emergency managementHou Kai, 60, remains auditor-general of the National Audit Office More

The moves preserve continuity in key economic policymaking roles after Li Qiang, 63, was on Saturday installed as premier, replacing Li Keqiang.Following are comments from economists and analysts.ZHIWEI ZHANG, CHIEF ECONOMIST, PINPOINT ASSET MANAGEMENT”It is a positive surprise to the market. The government sent a positive signal to the market by keeping these senior financial experts in the cabinet. The global economic outlook is challenging. Continuity and stability in the leadership of economic and financial affairs are helpful to boost market confidence.”XU TIANCHEN, ECONOMIST, ECONOMIST INTELLIGENCE UNIT, BEIJING    “Yi’s nomination could provide some reassurance that the PBOC won’t deviate too much from its role as a central bank. That said, the influence from the top leadership on its work will remain large, and the bank is expected to assume greater responsibilities in supporting economic priorities, including the development of advanced technologies and decarbonisation.     “I think it’s reflective of Xi’s preference for technocrats. Yi is a renowned economist and Liu has been a fiscal expert throughout his career so far. Xi will count on these appointments to ensure his visions are executed by capable officials, even if they are not his trusted affiliates and may break the norm on age limits.”ALFRED WU, ASSISTANT PROFESSOR AT LEE KUAN YEW SCHOOL OF PUBLIC POLICY, NATIONAL UNIVERSITY OF SINGAPORE”It shows China wants to at least have a dialogue with the United States on financial cooperation and monetary policy, which is a global thing. The U.S. side will be much more comfortable with someone like Yi Gang in charge.”MATTIE BEKIND, CHINA DIRECTOR, ECONOMIST INTELLIGENCE CORPORATE NETWORK, SHANGHAI    “This comes as a surprise to me. But maybe it shouldn’t. If you look at the unambitious GDP growth target, it prioritises credibility because it will be easily achieved.     “It is also perhaps a tacit acknowledgment of some of the challenges for Beijing at the moment and the reassurance of familiar, experienced leaders might be beneficial.     “So perhaps keeping Yi Gang and Liu Kun on in these consequential positions suggests they are considered safe pairs of hands during a challenging time for China.”  DONG XIMIAO, CHIEF RESEARCHER, MERCHANTS UNION CONSUMER FINANCE COMPANY CO, BEIJING“Yi staying in the position would help in maintaining monetary policy stability and continuity and ensuring financial support for the real economy won’t weaken.”The decision would better implement the State Council institutional reform plan, coordinate and push for reforms of the central bank’s branch organs and ramp up building a modern central bank system.”BRUCE PANG, CHIEF ECONOMIST, JONES LASALLE, HONG KONG”It will help to forge the consistency of China’s monetary and fiscal policies as well as to facilitate the collaboration of macro policies with a more growth-friendly stance.” More

A White House statement said Biden discussed with Newsom an emergency declaration he issued on Friday to ensure California has the full support of the federal government as it responds to the impacts of severe winter weather, including flooding, landslides and mudslides. “The President and the Governor also spoke about Silicon Valley Bank and efforts to address the situation,” the statement said without elaborating. More