Bank's leadership set for reshuffle
WILLY WO-LAP LAM
A RESHUFFLE of the leadership of the People's Bank of China is in the works, with both governor Li Guixian and vice-governor Chen Yuan reported to be due for transfers.
And several senior officials in State Council units, including the State Science and Technology Commission (SSTC), will probably be censured for alleged mismanagement and financial irregularities, according to Chinese sources.
The sources said Mr Li, 56, would likely be held responsible for economic problems, including the runaway money supply and Beijing's depleted control over regional finances.
Latest reports said the Government had tried to force local administrations and state enterprises to pump back up to 100 billion yuan (HK$134.9 billion) to central coffers.
Financial difficulties have been exacerbated by the large number of local-level banks that have committed huge investments to projects such as real estate.
Mr Li is also believed to have to take the rap for failing to prevent local governments and enterprises from sucking up deposits, by offering interest rates that are three or four times those of official levels.
Political sources in Beijing said Mr Li had to some extent been made a scapegoat because until the economic problems surfaced in the spring, he had merely gone along with the overall policy of supporting fast-paced development.
They said that late last year Mr Li had been prevented by top leaders, including patriarch Deng Xiaoping, from sounding the alarm on the overheated economy.
An ally of Premier Li Peng, the Soviet-trained Mr Li was one of the relatively small number of ministers who repeatedly got a few hundred negative votes during confirmation balloting at the National People's Congress.
The sources added that Mr Chen, who is the son of conservative patriarch Chen Yun, might also have to take responsibility for the financial problems.
However, because of his high-level connections, the 48-year-old economist would likely be compensated with a prestigious post.
Economic analysts in the capital said SSTC cadres might be in trouble because of scandals involving companies that were either its subsidiaries or had enjoyed its patronage.
For example, the Changcheng Machinery and Electronics Scientific and Technological Industry Company, which was liquidated last February for allegedly ''illegally raising funds'', was set up with the support of senior SSTC officials.
Hongkong newspapers have reported that commission vice-minister Li Xiaoshi, believed to be a protege of Premier Mr Li, had been detained for questioning over the Changcheng case.