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IT is official. China yesterday appointed Executive Vice-Premier Zhu Rongji to head the People's Bank of China, signalling the introduction of tough measures to restore fiscal order.

  The official New China News Agency said the appointment of Mr Zhu as the central bank chief was made by the National People's Congress (NPC) Standing Committee to ''strengthen the leadership of the State Council over financial work''.

  It said the committee ''dropped'' Li Guixian who had been Governor of the People's Bank of China since 1988.

  Mr Li still retains his post as a State Councillor, it quoted ''official sources'' as saying.

  Mr Zhu, 64, was noted for his decisive and impartial work style, it said.

  The official agency said Mr Zhu was determined to push through policies vigorously and speedily with ''the power of a thunderbolt and the speed of lightning''.

  The changes took effect yesterday, it said.

  Official reports did not give an account of why Mr Li, a close ally of the premier Li Peng, has been ''dropped''.

  But he has come under severe criticism for the financial shambles, including runaway urban inflation, financial scandals and strains on the money market that plagued the Chinese economy.

  Analysts and bankers, however, have cast doubt on whether the appointment of Mr Zhu will bring about quick solutions to the financial fiasco.

  Meanwhile, a set of tough measures are being implemented to revamp the financial sector.

  The pro-China Ta Kung Pao said yesterday that the central bank would be restructured to build up a multi-level banking sector.

  It said specialised banks would be set up to provide funds for major government projects, loans and credits for exporters and importers, and agricultural projects.

  Speaking at the closing of the NPC Standing Committee session, chairman Qiao Shi indicated that ''economic, legal and administrative measures'' ought to be taken to solve the ''new contradictions and problems'' in the national economy.

  Still insisting on the need to seize the day and quicken the pace of reforms, he called for caution to avoid major fluctuations of the economy in order to facilitate economic growth with speed and efficiency.

  Mr Qiao attributed the economic problems to the fact that while the shortcomings of the old centrally-planned economic system had yet to be eliminated, the new economic structure had yet to be established.

  He said: ''The problems of blind expansion of investment, the contest of speed and the lack of an effective regulatory mechanism have not been properly solved.''   An effective macro regulatory and supervisory system needed under the new market economic structure had yet to be set up, Mr Qiao said.

  The NPC chairman said the outstanding problems could only be solved through the deepening of reforms.

   and further opening to the outside world.

  Reforms for the development of a market economy especially of the financial system, investment structure and tax system must be speeded up, he noted.



Zhu takes helm of the state bank