Can new finance minister put China’s fiscal house in order?
Xiao Jie, who has worked behind the scenes for much of his career, must now tackle the nation’s debt woes and refocus the scope of its tax policy
Xiao Jie, a low-profile figure who has worked in the mainland’s fiscal apparatus for more than two decades, is now tasked with solving the nation’s local government debt overhang and fixing an increasingly intrusive tax regime.
Xiao, 59, who replaces Lou Jiwei as finance minister, has worked behind the scenes for much of his career, including in his previous role as deputy secretary general in the State Council.
His new position was announced as part of a broad ministerial reshuffle in Beijing ahead of the 19th party congress scheduled for next autumn.
One of his key jobs will be to address the nation’s ballooning debt, which has risen to about 300 per cent of gross domestic product – a dangerously high level for an emerging market, and largely the result of undisciplined borrowing by local authorities and state firms.
Xiao’s policy decisions, from property taxes to revenue sharing between Beijing and local authorities, will not only shape the short-term performance of the world’s second largest economy but also determine the nation’s economic and social trajectory in the longer run.