China’s senior market regulator Fang Xinghai knows the art of political flattery -- and survival
Recent references that harken back to Mao could be telling us something important
“China is blessed with the strong and long-term focused leadership of President Xi Jinping, the best leader in the world. With his leadership, we can deal with the inevitable risks and volatilities arising out of the transition.”
Fang Xinghai, Vice Chairman,
China Securities Regulatory Commission
When a regulator speaks about faith, it is time to shiver. When a regulator makes political flattery, it is time to run. Fang’s bold statement is sufficient reason for people to worry about China’s economy and politics.
It may not convince people on China having the best leader. It certainly has shown Xi as the most powerful since Mao Zedong.
Fang was not speaking in an internal party meeting where cadres chanted slogans and sang red songs.
It was a panel of the World Economic Forum where world leaders discussed “Where is the Chinese Economy Heading?” as the title went.
This is in the wake of the spring stock market rout; astounding yuan devaluation in the summer; and the more recent market turmoil. The successive turmoil begs the question whether the Chinese leadership is able to manage the slow down and promised reform.
People were looking for explanations and direction out of the chaos. Yet, Fang called for faith, adding that doubts is nothing but a result of bad communication.
Don’t mistake Fang as a party cadre who has studied only Karl Marx and spent his whole life within China’s borders. He has an elite upbringing by standards, having lived for 12 years in the US.
The 51-year-old regulator graduated from the prestigious Tsinghua University; pursued a Master’s degree and a PhD degree in Economics at Stanford University on full scholarship; and then spent five years as an economist and investment official at the World Bank’s headquarters in Washington.
This is someone who should have a good understanding of the Western system and values.
It would be very surprising if he didn’t know how people would respond when he said: “We have the strongest leadership of the world at this point, period.”
It could be a polite grin, disbelief or mockery. In the case of Christine Lagarde, Managing Director of International Monetary Fund; it was a knowing giggle, dance of head and eyebrow-raising.
It is hard not to be. In the past months, investors inside and outside China has witnessed its scuffles on both the equity and currency fronts.
Even his former peers have questioned that in the public. Among them is Li Jianguo, aide of former Premier Zhu Rongji and retired Vice Chairman of the Commission.
In a public forum, Li blasted out three questions on how the regulators have failed. “Why were the regulators forced into a response at the very last minute? Not once but every time. Why were they not prepared?”
To mainland netizens, Fang’s answer is worse than burying one’s head in the sand. They called him all sort of names.
Yet, it cannot be a slippage. Fang repeated the “best leader” statement in an interview with the Wall Street Journal as well as online media at home.
One possibility is he seriously sees the turmoil as a communication issue and the rest is China bashing.
Two, he truly believes that the “best leader” pitch would convince investors that China is going to be fine.
Fang – a former director of Shanghai’s Financial Service Office - has been credited with making the city into the hub of venture capital and private equity funds. He should know the market.
Third, the praise is needed for his survival, or should we say further advancement, in the current political reality.
Fang knows the game and he is a high-flyer. The rumour is that he has written a letter to Xi to recommend himself as a lieutenant of the country’s financial reform. He became a senior official in Xi’s economic advisory team and then the Commission’s deputy in November.
Pick your choice.
All we know is the new China has witnessed many political and economic challenges since its establishment in 1949. Rarely was “we have the best leader” a public answer; except once.