Vice-premier in charge of Beijing crisis committee
Vice-Premier Wang Qishan will head a committee being set up to deal with fiscal uncertainties caused by the deteriorating global financial crisis, according to an official source.
The decision to set up the committee is the latest step by mainland authorities to try to prevent the domestic economy following western countries into recession.
At the end of the Communist Party Central Committee plenary session on Sunday, the leadership said that despite the international turmoil, the mainland's basic economic situation had not changed. However, precautions to guard against the side effects of the international slowdown were needed.
The source said the central government believed 'losses from the international financial crisis are limited and the country's risk and exposure to the crisis is still controllable'.
The new committee will be at the core of efforts to deal with the international problems. It will monitor financial changes overseas and respond by adjusting mainland economic policies when necessary.
Appointing Mr Wang as the committee's chairman could help streamline the information flow and the decision-making process, allowing the central government to answer challenges swiftly.
Mr Wang, promoted in March to vice-premier responsible for the economic and financial sectors, has the strongest financial management credentials among senior leaders, although retail traders on the mainland have blamed him for 'allowing' the stock markets to go into free fall.
Mr Wang - no stranger to crises after successfully handling the Guangdong International Trust and Investment Corp debacle in 1998 as Guangdong vice-governor, and the 2003 Sars epidemic in Beijing as the city's mayor - has said several times this year that China has the confidence and tools needed to maintain steady economic growth.
The establishment of the committee is expected to streamline an informal information-collection mechanism that has long been in place between the State Council, the mainland's central bank, and the banking and securities authorities.
Sources with the China Banking Regulatory Commission (CBRC) said that on the second day after Lehman Brothers announced bankruptcy, the commission established a crisis-monitoring team to update senior banking regulators each day.
'The assignment of the team is to report their collection of information to our leaders as well as related departments in the State Council on a daily basis to make sure all decision makers are well informed about where the financial disaster is going,' the source said.
The People's Bank of China, the central bank, had a crisis-monitoring mechanism in place immediately after the initial subprime credit crunch emerged last summer, but the group did not report to senior leadership as frequently as the CBRC team, a central bank source said.
A similar research team is also in place at the China Securities Regulatory Commission, but focuses on stock market changes rather than the big financial picture.
Remin University finance professor Zhao Xijun said the top-level committee was being put in place at a good time because China's traditionally isolated regulatory structure would have made it hard for mainland financial regulators to co-ordinate their moves.
'It will definitely improve the work efficiency and decision-making ability,' Professor Zhao said.
