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China economy

China’s central bank chief Zhou Xiaochuan ‘headed for Boao Forum’, Asia’s Davos

Influential PBOC head expected to be named to new post during national legislative sessions next month

PUBLISHED : Tuesday, 27 February, 2018, 1:12pm
UPDATED : Tuesday, 27 February, 2018, 10:46pm

Zhou Xiaochuan, China’s longest-serving central bank governor, is tipped to become the new vice-chairman of the Boao Forum – known as Asia’s Davos – after he retires next month, sources said.

Zhou, 70, will replace Zeng Peiyan, 79, in the post after Zhou steps down as governor of the People’s Bank of China (PBOC) during the annual meeting of the national legislature next month, three sources said.

A fluent English speaker, Zhou is one of the world’s most influential central bank governors.

He is credited with loosening interest rate controls, boosting the yuan’s global clout and developing new policy tools to control money supply and guide market expectations, as Beijing seeks to contain debt risks fuelled by previous policy stimulus.

Zhou, central bank governor since 2002, would breathe new life into the annual event, the sources said.

“He is widely accepted and recognised by the international community. His arrival at the post will further enhance Boao’s international influence and its role as a multilateral international arena,” a government policy adviser said.

The man who pushed for a global yuan - China's central bank governor Zhou Xiaochuan

The Boao Forum for Asia, a non-governmental and non-profit organisation, is modelled after the World Economic Forum held annually in Davos.

The forum has been held annually since 2002, bringing together government and business leaders and academia to discuss issues ranging from economics to the environment, society, integration and cooperation.

President Xi Jinping might attend the forum this year which is expected to attract more foreign heads of state, two of the sources said.

Boao, the PBOC, the State Council Information Office – the cabinet spokesman’s office – did not immediately respond to faxed requests for comment.

Zhou took the helm of the central bank when China’s economy – then the world’s sixth largest – began to take off after its entry into the World Trade Organisation.

China became the world’s second-biggest economy in 2010.

Is China’s central bank boss Zhou Xiaochuan about to retire?

Under Zhou, the PBOC has emerged as a powerful player in the policymaking process, even though the central bank still lacks the independence of institutions like the US Federal Reserve and needs cabinet approval to change interest rates or the value of yuan.

In October, Zhou sounded alarm bells on risks that could lead to a “Minsky moment”, referring to a sudden collapse in asset prices after long periods of growth, sparked by debt or currency pressures.

Zhou’s Western-style hobbies – he is an connoisseur of high-end whisky and an opera buff known to sneak out to performances while on official visits overseas – and the belief that China has much to learn about market reforms from the United States have made him vulnerable to ideological attacks.

Speculation has been rife for months over the choice of the next central bank governor.

Reuters reported on Friday that Liu He, a Harvard-trained economist who is a trusted confidant of Xi, had emerged the front runner to be the next central bank governor.

Before the Communist Party’s 19th congress in October, sources said that banking regulator Guo Shuqing and veteran banker Jiang Chaoliang were leading contenders for the PBOC job.