Banking & Finance

Chongqing mayor Huang Qifan tipped to become China’s finance tsar

Source says decision will “significantly” change direction of policy

PUBLISHED : Friday, 15 January, 2016, 4:09pm
UPDATED : Friday, 15 January, 2016, 7:03pm

Chongqing mayor Huang Qifan has been hand picked by President Xi Jinping as the man to streamline China’s chaotic financial markets, with a source close to the mainland’s top financial regulator saying the decision would “significantly” change the current direction of policy.

“The appointment of Huang to take a role overseeing China’s financial markets came down from President Xi Jinping directly,” the source said. “Huang has a profound understanding of China’s financial system as well as the real economy.”

Reuters reported on Wednesday that Huang was tipped to replace Yang Jing, 62, as secretary general of the State Council, China’s cabinet. The secretary general holds a state-level position, which is above minister-level, and assists Premier Li Keqiang on central government operations.

Huang, 63, made his name as a rising political star from China’s financial hub Shanghai, and is renowned for his financial acumen, although he has never held a position in a bank or other financial institution, choosing instead to remain in government.

He is also a political survivor, having prospered after the 2012 fall of his former boss, Bo Xilai, then Chongqing Communist Party secretary and a member of the party’s decision-making Politburo.

A source close to the Chongqing government told the South China Morning Post Huang would assume a new role with the central government in Beijing, but it remained to be seen whether he would become the secretary general of the State Council.

“There will soon be a government conference at which Huang’s new role will be announced to the senior Chongqing officials,” he said. “He was still in town in the past few days, but could fly to Beijing very soon.”

Another source, who has dealt with Agricultural Bank of China executive vice-president Li Zhenjiang – the man tipped to become Huang’s deputy – said Huang was set to play a bigger role in economic and financial policymaking.

Li would be promoted to become head of a new department within the State Council’s general office in charge of coordination between the financial and economic regulators, the source said.

“It’s certain that Huang will be Li’s boss,” the source said. “A team of financial industry professionals have been set up and it’s just a matter of time before the announcement is made.”

A Beijing-based analysts said Xi “has been turning more hands-on with regards to economic and financial affairs in recent months”.

Huang’s elevation comes after a most volatile start to the year for the mainland’s stock and currency markets.

The China Securities Regulatory Commission (CSRC) was criticised for introducing a poorly designed circuit breaker on January 4, the first trading day of the new year, which was scrapped four days later after it halted trading for the day twice in four days. Since the start of the year, the mainland stock markets have wiped out the gains made last year.

The State Council in 2012 gave the People’s Bank of China (PBOC) a leading role in coordinating the financial regulatory process, along with other watchdogs including the CSRC. But recently the PBOC has come under attack for a number of perceived shortcomings.

These include concerns over its communications policy and policy stance, which some critics say is unclear. The sell-off in Chinese equities in the first of trade in the new year, along with a sharp drop in the offshore value of the yuan, was attributed in part to errors by Chinese policy makers.

Huang has been mayor of Chongqing since 2011. The city has outpaced other urban areas in terms of economic growth since 2014.