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CHINA has appointed its Finance Minister controller of the national taxation system, a move designed to strengthen supervision of politically-sensitive tax reform.

  Liu Zhongli has taken the hot seat as Director of the State Administration of Taxation, replacing Jin Xin.

  Mr Jin, earlier named head of the tax administration's party committee, becomes a Deputy Director.

  The senior-level reshuffle among the finance and tax organs under the State Council, earlier approved by the cabinet, was announced by Xinhua (the New China News Agency) yesterday. No reasons were given.

   Some analysts suggested the shake-up featured the elevation to senior positions of more officials close to economic supremo Zhu Rongji.

  Mr Liu, named as Finance Minister in 1992, is known for his liberal views on fiscal matters and has had close links with Mr Zhu.

  According to Xinhua, another close aide of Mr Zhu, Yan Jieyan, previously head of the State Administration of Foreign Exchange Control, has been appointed a deputy governor of the People's Bank of China.

  Mr Zhu was named as governor last summer.

  Mr Yan's post has been filled by Zhu Xiaohua, formerly a deputy governor of the central bank. Mr Zhu Xiaohua, a longtime colleague of Mr Zhu Rongji, is tipped to be a high-flier in the financial network under the State Council.

  Mr Yan is seen as one of the forerunners for the top post in the central bank.

  Both Mr Yan and the other two contenders for the job - Zhou Zhenqing and Dai Shanglong - are seen as close allies of Mr Zhu.

  Analysts said it had been rare in recent years for a senior minister to head another bureau at the same time.

  The Finance Minister's takeover of the tax bureau comes weeks after China launched a revamp of its tax system.

  Senior leaders have conceded that new frictions might arise in the implementation of a new revenue-sharing formula between the central Government and local authorities.

  An analyst said: ''The major goal of the tax reform is to boost the revenue of the central Government to about 60 per cent of the national revenue. The new leadership of the tax office under [Finance Minister] Liu Zhongli will help strengthen control of the ministry over the tax reform.

  ''This will guarantee the revenue for the central treasury.

  ''But this will probably be an expedient tactic for this year as the whole package of reform is at its crucial stage. In the long-run, it is not a healthy trend to have a senior minister heading another bureau,'' he added.

  Xinhua also confirmed that Wang Fengchao, previously a department head, has been promoted to become a Vice-Director of the Hong Kong and Macau Affairs Office, replacing Wang Qiren who has recently been given a top post in the Bank of China.

  Other major appointments included the naming of Dai Bingguo as Vice-Foreign Minister. He was previously an assistant minister.



Tax supremo appointed