China sends top financial officials to clean up debt-laden provinces amid growing signs of economic risk

Senior state bankers and financial regulators have been appointed vice-governors of at least 15 of China’s 31 provincial level governments

Postings come amid signs of growing financial stress in China, including local government fiscal trouble and a slowing economy

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Tan Jiong, a vice-president of the Industrial and Commercial Bank of China, has been appointed vice-governor of Guizhou. Photo: Simon Song

Published: 3:05pm, 30 Oct 2019Updated: 11:11pm, 30 Oct 2019

China’s central government has dispatched senior state bankers and financial regulators to at least 15 of the country’s 31 provincial level governments to work as vice-governors over the past two years, as Beijing looks to shore up debt-laden local economies.

The postings, compiled by the South China Morning Post from government announcements, come amid signs of growing financial stress across the country, with local governments facing tight budgets as the economy slows and revenues plunge following tax cuts mandated by Beijing. The government has also been forced to take over or recapitalise three large regional banks so far this year, raising questions about the solvency of other local financial institutions.

In September, Tan Jiong, a vice-president of the Industrial and Commercial Bank of China, was appointed vice-governor of Guizhou, one of the country’s poorest and most indebted provinces, with a mission to tackle government debt and rising defaults after a decade-long frenzy of construction investment.

On a recent visit to the Shanghai Stock Exchange, Tan told a group of institutional investors that the province faces a key challenge resolving its financial risks and promised Guizhou would honour its debts, according to an article published on the provincial government’s website.

Elsewhere, the former chief of the central bank’s monetary policy department, Li Bo, was appointed vice-mayor of Chongqing, a large municipality that is rapidly losing growth momentum. Ge Haijiao, the former president of China Everbright Bank, was also named as a vice-governor of Hebei, a province struggling to balance economic growth with requirements to reduce air pollution.