Bank of China

Dai Xianglong to run social security fund

PUBLISHED : Thursday, 31 January, 2008, 12:00am
UPDATED : Thursday, 31 January, 2008, 12:00am

Ex-PBOC chief to control 500b yuan in assets

Former Tianjin mayor Dai Xianglong has been appointed head of the mainland's social- security fund, ending months of speculation about the financial strategist's political future.

'The party central committee and the State Council have appointed Comrade Dai Xianglong as chairman and party secretary of the National Council for Social Security Fund,' a one-sentence statement posted on the central government's website said yesterday.

In his new role, Mr Dai will be in charge of assets of about 500 billion yuan.

The government hopes the fund can improve its investment returns. The fund mainly focuses on low-risk, fixed-income investments but plans to invest 20 per cent of its assets overseas.

Analysts said Mr Dai's appointment was a reflection of the leadership's recognition of his expertise and financial management skills but did not mean anything politically because the new position suggested neither a promotion nor a demotion.

'Mayor Dai has relied on his ability rather than on cultivating connections in his political career,' a senior Tianjin official who requested anonymity said.

When Mr Dai was appointed Tianjin mayor after serving as People's Bank of China governor from 1995 until 2003, many people sympathised with him, seeing the move as a demotion.

They believed Mr Dai deserved better after helping to steer the nation's financial system through the shocks of the 1997-98 Asian financial crisis.

In more than seven years at the central bank's helm, Mr Dai also won praise for helping to turn the near-bankrupt state-owned banks into more market-oriented entities.

The two posts are both regarded as ministerial-level positions in the mainland hierarchy. But the bank chief, playing a key role in the world's fastest-growing major economy, inevitably had a higher profile than the head of a sooty industrial city that had never really got its act together.

But in his three years as mayor, Mr Dai claimed to have laid the groundwork for Tianjin's emergence as the nation's second financial centre, after Shanghai.

The city, long overshadowed by other booming mainland cities, is now in pole position to lead the country's next wave of financial advancement, and seemingly local decisions are taking on national significance.

It is also taking the lead to boost economic development in the Bohai region, which includes the provinces of Hebei , Liaoning and Shandong .

In 2006, the State Council endorsed a project to develop Tianjin's Binhai New Area, giving its backing to financial and land reform experiments. In the same year, it began the Bohai Industrial Investment Fund, with 20 billion yuan, the first equity fund of its kind in a country heavily reliant on bank lending.

At the time, officials suggested they might use the Binhai New Area to experiment with making the yuan freely tradable, though talk of that quickly died down.

Last August, Tianjin was designated as the sole gateway for a landmark programme to permit mainlanders to invest directly in Hong Kong's stock exchange, although the so-called 'through train' has remained on hold since then.

Mr Dai, now 64, was a vice-governor of the PBOC between 1993 and 1995 before becoming governor.

Before moving to the central bank, he served as vice-governor of the Agricultural Bank of China from 1985 to 1989 and then as general manager and vice-chairman of the Bank of Communications of China from 1990 to 1993.

The central government did not say why Xiang Huaicheng , the former head of the national fund, was replaced.

However, Mr Xiang was born in 1939 and had already passed the normal retirement age of 65.