Two more bank veterans stay on to ensure stability

Arrangements show desire for continuity after leadership reshuffle last year, analysts say

PUBLISHED : Friday, 22 February, 2013, 12:00am
UPDATED : Friday, 22 February, 2013, 5:22am

Chen Yuan, the 68-year-old chairman of China Development Bank, will stay in his job at the nation's largest financer of infrastructure projects and overseas investment despite his age and a recent controversy over the lender's role in a major corporate transaction, sources told the South China Morning Post.

Li Ruogu, the 62-year-old chairman of Export-Import Bank of China (Exim Bank), is also set to retain his post.

The arrangements reflect Beijing's decision to make the nation's financial and political stability a priority after the once-in-a-decade power reshuffle last year and as global economic uncertainties persist.

Sources earlier told the Post that People's Bank of China (PBOC) governor Zhou Xiaochuan would remain at his post for another year or two, even though he had reached the compulsory retirement age of 65 and had been overlooked for a seat in the Communist Party's inner circle in last year's leadership reshuffle.

Retaining these key figures also avoids the need for "musical chair" rotations among the top securities, insurance and banking regulators and institutions in the near term.

During a power transition, stability is desired above all else

Analysts say keeping the financial veterans will help the new leadership consolidate power and win broader support within the Communist Party.

Chen's endurance is testimony to his political resilience and the powerful influence of his family, led by his late father Chen Yun - one of the founders of the republic - analysts based inside and outside China agreed.

CDB was in the media spotlight recently because of its involvement - then abrupt withdrawal - from HSBC's sale of its US$9.4 billion stake in Shenzhen-based Ping An Insurance, the mainland's second-largest insurance company, to Charoen Pokphand Group, a conglomerate controlled by Thailand's richest man, Dhanin Chearavanont. The deal eventually went ahead without CDB's involvement.

In addition to their professional expertise and reputations, Zhou and Li also enjoy strong family connections. Zhou's father is believed to have close links to former president Jiang Zemin . Li is the son-in-law of Xiao Hua, a former senior PLA general.

Neither CDB nor Exim Bank were available for comment.

Zhang Ming, a professor of politics at Renmin University, said: "During a power transition, stability is desired above all else."

President Hu Jintao postponed Chen's retirement in 2011 when he turned 66, Reuters reported in August that year.

Chen took the helm of CDB as governor in 1998 and was appointed chairman in late 2008. The bank has expanded rapidly and had assets exceeding 6 trillion yuan at the end of 2011.

Li, a former deputy governor of the People's Bank of China, has run Exim Bank since 2005.