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SCMP Reporter

Shanghai and the country's securities regulators are locked in a tussle over the appointment of a new chief at the Shanghai stock exchange.

 Sources said the China Securities Regulatory Commission (CSRC) would like to appoint Zhu Chongjiu to replace Tu Guangshao, but the plan has been resisted by the Shanghai municipal government.

 Mr Tu is due to be promoted to secretary-general of the CSRC, a position that requires him to move to Beijing.

 In August 1997, he became the first person appointed by the central government to head the Shanghai exchange.

 Until Mr Tu's appointment, candidates were chosen by the Shanghai government and nominally ratified by the CSRC.

 The break with tradition displeased Shanghai, which agreed - albeit reluctantly - to accept Mr Tu.

 Now, it is resisting his transfer because it require having to work with a second new appointee within the space of two years.

 'The Shanghai government is not at all happy because it feels the change is too soon and not good for the development of the exchange,' a source said.

 Shanghai could block the CSRC plan through its connections in Beijing.

 President Jiang Zemin and Premier Zhu Rongji as well as several other senior leaders made their careers in Shanghai in the 1980s and early 1990s.

 'If Shanghai resists the move strongly through its connections in Beijing, the CSRC will not be able to push through the plan,' the source said.

 So, while word in the exchange has it that Zhu Chongjiu is being groomed to take over, no public announcement is to be issued until a compromise is reached.

  Although the country's Securities Law makes it clear that senior appointments to the Shanghai and Shenzhen exchanges are decided by the CSRC, the Shanghai government has retained a keen interest in its workings because of its location in the emerging financial centre.

 'The Shanghai exchange is a vital component of the city's plan to restore itself as a national and international financial centre. So, naturally, the municipal government has more than a passing interest in its running,' a stock analyst said.

 In preparation for his appointment, Zhu Chongjiu, 33, was transferred to the Shanghai exchange from Shenzhen about three months ago to understudy Mr Tu.

 Before moving, he worked as a CSRC inspector at the Shenzhen stock exchange to help ensure its operations complied with national securities regulations.

 He was reported to have worked for a short time on Wall Street, and was secretary to former CSRC chairman Liu Hongru.



Shanghai battles regulator on top transfer