China appoints US-trained central banker

Pauline Gross
March 20, 2018

Liu, for example, said at the World Economic Forum in Switzerland earlier this year that China will "open wider to the world across the board", including the financial sector, inbound and outbound investment, ad worldwide trade.

A massive overhaul of China's bureaucracy announced last week - the biggest in a decade and created to boost efficiency - will give the central bank more power to push through such reforms.

Also Monday, the National People's Congress endorsed the elevation of Liu He, Xi's economic adviser, to a post as vice premier, where he is expected to oversee economic reform.

Beijing is aiming to streamline regulators and ministries to cut inefficiencies while expanding the remit of the central bank to boost its policymaking powers. Yi's appointment is likely to be viewed as a sign of continuity in PBOC's policies, as policymakers try to rein in risks from an increasingly complex financial system without jolting markets or hurting economic growth.

The National People's Congress also selected four new vice premiers. He also has a degree in business administration from Hamline University in Minnesota. He already was overseeing efforts to make the mechanism that sets the yuan's exchange rate more flexible.

Yi - a US-educated economist who speaks English fluently - had been deputy governor of the central bank for the last decade. He said that he would follow "prudent" monetary policy, promote financial reforms and control risks.

"Frankly speaking, (Yi's nomination is) a bit unexpected as he holds a relatively low political ranking as the alternative member of CPC Central Committee", said Tommy Xie, China economist at OCBC Bank in Singapore.

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While Yi has a track record of implementing policy changes and currency reforms in recent years, he faces formidable challenges in reducing China's reliance on credit to fend off financial risks while keeping economic growth steady.

Speaking on Bloomberg Television Sunday, US Treasury undersecretary for worldwide affairs David Malpass said Yi is a "very strong technical leader with lots of skills" and that the US looks forward to a "strong dialog with the leaders that China designates". Yi earned a business degree at Hamline University in St. Paul, Minnesota, and a Ph.D.in economics at the University of IL before moving to Indiana University at Indianapolis as a professor in 1986, according to his official PBOC biography.

At a press conference earlier in the annual parliamentary session, Yi said the central bank would work to push through reforms that will bring about "equal treatment for domestic and foreign investors".

Separately, Liu Kun, head of the budget office of parliament, was elected to be the new finance minister, replacing Xiao Jie.

That would put Liu on a similar standing with former economic tsar, Zhu Rongji, known for his tough handling of hyperinflation and the economic chaos in the 1990s.

A USA -trained economist was appointed Monday to succeed the longtime governor of China's central bank, Zhou Xiaochuan, at a time when the ruling Communist Party is trying to reduce financial risks and surging debt.

Zhong Shan was re-elected as the commerce minister.

Other reports by GizPress

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