The key man behind Shanghai's ambitious plan to develop the city into the world's leading financial centre by 2020 has been promoted to an elite economic team that may help the city speed up its market reforms as it prepares to take on Hong Kong.
Fang Xinghai, former head of the Shanghai Financial Services Office, who once famously downplayed Hong Kong's importance as a financial hub, has been named a senior official at the Office of the Central Leading Group for Financial and Economic Affairs, sources close to the leadership said.
The team worked for the central committee of the Communist Party and was in charge of all vital financial and macroeconomic matters, the sources said.
Premier Li Keqiang directly oversees this low-profile, Beijing-based group, whose main responsibilities include making and advising on key economic decisions and drafting the working agenda of the Central Economic Work Conference, the most important annual economic policy meeting in the country. While Fang's elevation signals the leadership's eagerness to draw younger local officials to Beijing's top policymaking circles, it may also make officials in Hong Kong uneasy.
At the 2011 Asian Financial Forum in Hong Kong, Fang said the speed with which Hong Kong became a successful offshore yuan centre would depend on how soon Shanghai could turn itself into an onshore yuan trading centre. The statement, signalling a subordinate role for Hong Kong in the future, triggered concerns among Hong Kong officials and bankers.
One of the sources, who spoke on condition of anonymity, said Fang wrote a letter to President Xi Jinping during the National People's Congress meeting this year to express his interest to "serve the country's financial industry development better at the national level", and Xi quickly forwarded it to the central group in charge of financial and economic affairs.
Fang and Xi briefly worked together in Shanghai when Xi was appointed the city's party chief in 2007.
Fang landed the promotion soon after.
Han Zheng , Shanghai's party chief, supported the promotion and hosted a small farewell dinner for Fang.
"At the farewell dinner, Han praised Fang's achievements during his time in Shanghai and asked him to continue to support the city's financial development in his new role," said one of the sources.
Fang, who obtained his PhD in economics from Stanford University, took the helm of the Shanghai Financial Services Office in 2007 and has been deputy general manager of the Shanghai Stock Exchange.
The Shanghai Financial Services Office declined to comment on Fang's promotion.
In 1998, when he had just turned 30, he was invited by Zhou Xiaochuan , then head of China Construction Bank, to return to China.
At that time he was in the US, where he worked for several organisations, including the World Bank after graduation.
Despite Fang's personal ties with powerful officials and bankers in Beijing, including Zhou, now the central bank governor, he has had his share of brushes with red tape in trying to push forward his various initiatives.
His new role could save him the trouble of clearing bureaucratic hurdles at every step and allow him to get his views and plans across to the top echelons more easily.