Xi plays safe and taps old guard to take on China’s big economic mission

Seasoned campaigners in the Communist Party’s new ruling elite will face the challenge of realising the president’s vision while defusing a ticking debt bomb

PUBLISHED : Wednesday, 25 October, 2017, 6:03am
UPDATED : Wednesday, 25 October, 2017, 6:03am

A core group of proven financial technocrats loyal to President Xi Jinping have gained places on the Chinese Communist Party’s new ruling Central Committee.

At least 10 of the committee members are seasoned economic and financial regulators, including familiar face Guo Shuqing, the banking regulator who is expected to become the country’s next central bank chief. Miao Wei, the information technology minister promoting the country’s Made in China 2025 plan, and Finance Minister Xiao Jie are also among the old guard on the body.

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Securities regulator Liu Shiyu, 56, is one of the Central Committee’s new recruits, earning a top spot by clamping down on stock market “irregularities”, clipping the wings of financial tycoons and restoring order after the 2015 summer stock market rout. Liu has also made headlines for applauding Xi for his “political courage and wisdom” in foiling a coup plot by his political foes.

Joining Liu are He Lifeng, the head of China’s powerful economic planning agency, and Commerce Minister Zhong Shan, who supervises China’s exports and foreign investments. He and Zhong worked with or under Xi earlier in the president’s political career.

Together these proven players will be key figures in realising Xi’s plans to have a prosperous society by 2021 and a raft of other big ideas, from supply-side reform to the “Belt and Road Initiative”.

Mizuho Securities Asia chief economist Shen Jianguang said the men would face big challenges, including finding a way to defuse China’s debt bomb without derailing growth or raising new risks.

Liu Shengjun, president of the China Financial Reform Institute, a Shanghai-based think tank, said the elite group must have outperformed their peers in terms of “professional skills or ability to push forward reforms, or have a good sense of politics”.

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Liu Shengjun said the job of central bank chief would be particularly critical for the country’s economic future.

Other names to watch include Liu He, 65, Xi’s trusted economic adviser of the last five years who kept his seat on the Central Committee. Sources told the South China Morning Post earlier that Liu might become the party’s principal theorist.

Ding Xuedong, 57, who was appointed deputy secretary general of the State Council earlier this year, has also secured a Central Committee spot, with sources saying he might take on a more important economic role in the coming months.

Alongside Ding will be Xiao Yaqing, head of the State-owned Assets Supervision and Administration Commission, who faces the daunting task of revitalising the state sector, a centrepiece in Xi’s overall economic strategy.

Hubei party chief Jiang Chaoliang, 60, rounds out the list. With his financial background and local government experience, Jiang’s elevation to full Central Committee member makes him another

contender for central bank governor.

But if history is any guide, membership is no guarantee of safety.

Xiao Gang made it onto the Central Committee five years ago but has not been seen since he was forced to step down as head of the China Securities Regulatory Commission last year after the stock market crisis.

Jiang Jiemin, former chairman of China’s state oil company, came under investigation for corruption less than a year after he was elected as a full member in 2012. He was later jailed. And former insurance watchdog chief Xiang Junbo, a full member of the ruling body, was expelled from the party last month for corruption and is awaiting prosecution.

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Waiting in the wings are alternate members Yi Gang, a deputy governor of the People’s Bank of China, and Pan Gongsheng, another central bank deputy chief and the head of the State Administration of Foreign Exchange.

Ma Zhengwu, 54,,chairman of state-owned investment conglomerate Chengtong Group, picked by the authority in last September to lead the China State-owned Enterprises Restructuring Fund, ended the congress with the most votes of the alternate members, making him the front runner to advance if any of the 204 full members is ousted or dies.