Well-trained managers the SAFE way to manage assets
Decision to send its employees to UK school shows the mainland's foreign exchange regulator means business when it comes to nurturing talent
The manager of the world's largest foreign exchange reserves appears to have finally come to a valuable conclusion - if you want to manage your assets well, you must first know how to manage your people.
The State Administration of Foreign Exchange (SAFE) signed an interesting pact last week with the London Business School (LBS), one of the world's most influential business schools. It will see LBS train mid-level executives from SAFE, which will pay all the bills for their studies in the school's master's degree programme in finance. The school, which admits 140 people a year to the programme, will reserve several of those places for SAFE employees, according to Fiona Sandford, its director of career services.
Beijing-based SAFE has previously sent some staff to various foreign academic institutions for study, but this is the first time it has signed an official partnership agreement with a foreign academy, which means a more stable and routine channel for SAFE employees to study abroad.
Sources say other government agencies in Beijing such as China Investment Corp (CIC), the mainland's US$480 billion sovereign wealth fund, are mulling similar plans. For LBS and even the British government, the deal shows mutual trust and, in the long run, may increase Chinese interest in investing in Britain. After all, some of those LBS graduates could go on to become top central bankers and government leaders.
There are, of course, many good reasons for SAFE to tie up with LBS. The regulator, which reports directly to the central bank and is responsible for managing more than US$3 trillion in foreign reserves, is facing growing challenges to attract and keep talented professionals, due largely to low pay, high pressure, office politics and limited chances for internal promotion.
Many key positions inside SAFE are held by those who are well connected to the very highest levels of central government leadership. For example, Wen Ruchun, daughter of former premier Wen Jiabao, has been in a powerful position as head of a SAFE department in charge of part of the country's foreign reserves for many years. It doesn't necessarily mean Wen junior is not capable but it does discourage many other young talents from the so-called "grass-roots class" from trying to climb the career ladder in such government agencies.
Some young employees at SAFE and CIC may work there for just two or three years before joining Wall Street banks. Others may choose to study abroad in their 30s, pursuing higher degrees at their own expense, but their chances of landing a key position in a government agency on their return are slim.
Sources familiar with top Beijing hiring procedures say an unwritten rule disqualifies anyone who studies abroad outside an officially sanctioned programme for a ministerial-level government job. When CIC tried to appoint a new boss after founding chairman Lou Jiwei was promoted to finance minister earlier this year, Gao Xiqing, Lou's long-time deputy, missed out. Gao went to the United States on his own to study law in the 1980s.
George Chen is the Post's financial services editor. Mr. Shangkong appears every Monday in the print version of the SCMP. Like it? Visit facebook.com/mrshangkong