Ex-wealth fund guru Lou Jiwei to be finance minister

PUBLISHED : Sunday, 17 March, 2013, 12:00am
UPDATED : Sunday, 17 March, 2013, 7:01am

After overseeing a multibillion-dollar sovereign wealth fund, Lou Jiwei is returning to the place where he began his foray into the world of finance.

Lou, known for his reformist outlook and preference for a market-oriented economy, was a deputy finance minister for 10 years before becoming head of China Investment Corp (CIC), the mainland's sovereign wealth fund, in 2007. His career has now turned a full circle with his appointment as finance minister.

A close ally of former premier Zhu Rongji, Lou is viewed as a no-nonsense official with profound knowledge of China's economy and the inner workings of its financial system.

When he was appointed CIC chairman, a minister-level post, he was put in charge of investing US$200 billion. The fund is now valued at US$500 billion thanks to additional capital injections from the government and heavy dividend payouts by the biggest state-owned banks, and has recorded an annualised 5.03 per cent return since its inception.

Lou, 62, kept a low profile while CIC chairman, but the sovereign wealth fund became involved in several controversies due to unsuccessful investments and the blocking of some attempts to acquire foreign assets.

"He's very intelligent, very quick to learn and very capable of dealing with not only our daily investment matters but also with governments, foreign and Chinese, and the people," CIC president Gao Xiqing said. "Overall, he's probably done more for Chinese reform than anyone I can think of. I think he's definitely one of the most important personalities in this country."

Lou spent five years in the People's Liberation Army from 1968 and then worked for Shougang, a big steel mill in Beijing, as a computer programmer before beginning a computer science degree at Tsinghua University in 1978.

Lou earned a bachelor's degree in 1982 and received a master's degree in economics from the Chinese Academy of Social Sciences (CASS), a key think tank, in 1984. Afterwards, he became a civil servant at a monetary policy research institute under the State Council before being transferred to a CASS unit.

Zhu, then mayor of Shanghai, moved Lou to the commercial capital in 1988 to help carry out economic reforms. Lou became a department chief at the State Council Office for Restructuring the Economic System in 1992 before being promoted to deputy governor of Guizhou province in 1995.

He returned to Beijing in 1998, after Zhu became premier, and became deputy finance minister. Government officials and scholars say Lou is a fan of economic reforms and of giving free rein to market forces.

Additional reporting by Jane Cai