Xi Jinping has kept the country’s central bank governor Yi Gang in his post and retained his finance and trade ministers, as the Chinese president defied expectations of a major cabinet reshuffle at this year’s annual parliamentary meeting.
The reappointments, which analysts say will reassure nervous markets about plans by Beijing to reform the financial sector, were among a swath of senior posts announced at the rubber-stamp National People’s Congress on Friday.
Apart from the central bank governor, the most important is the nomination of senior Xi colleague He Lifeng, the former head of the planning agency, as deputy prime minister.
He Lifeng is expected to take over the China economic team from Liu He, a Harvard-trained politician who helped steer the world’s second-largest economy through turmoil in the past five years, including the Covid-19 pandemic.
The NPC meeting is seen as one of the most important in years, with Xi pushing for extensive reforms of financial regulators and the country’s science and technology ministry.
The Chinese president, who is starting an unprecedented third five-year term, is seeking to revive China’s economic growth while preparing for greater competition with the US on advanced technology.
Xi is expected to replace the head of the People’s Bank of China, who has reached the retirement age of 65 for a government minister, with a commercial banker.
Analysts say the retention of Yi, a respected technocrat, will send a positive signal to markets as Beijing prepares to transfer some central bank regulatory functions to the state financial regulatory commission, a new financial watchdog that will be based on current banking and insurance regulators.
“Institutional reforms suggest the PBoC will clearly be under government supervision,” said Christopher Beddor, deputy director of China research at Gavekal Dragonomics. “There is a bit of anxiety in the market about what that means. By choosing continuity, at least for now, this is a confidence-building step for the market.
Dong Ximiao, chief researcher of the Shenzhen-based Merchants Union Consumer Finance, said holding Yi at least temporarily will help to ensure the stability of the central bank’s monetary policy.
Policy support for the real economy should remain strong, Dong said, and Yi would do better to push for “institutional reform implementation” at the PBoC, which includes streamlining the central bank’s branch network.
Analysts cautioned that while Xi has retained Yi and most other ministerial and ministerial officials at the NPC meeting, they could still be replaced later.
“State Council ministers can be reshuffled at any time,” said Chen Long, founder of Beijing-based research firm Plenum, referring to China’s cabinet.
Tan Yifei, founder of Jince Frontier, a Beijing-based consultancy, said Yi’s reappointment was apparently “transitional” to ensure policy consistency. “Personnel changes can be made at the State Council standing committee meeting once every two months,” Tan said, adding that more changes are likely in the coming months.
The nominations of China’s top officials were announced at Beijing’s Great Hall of the People in front of thousands of NPC delegates, who applauded enthusiastically when Xi made the appointment.
Sunday’s appointments did not include party leaders or regulatory agencies. In China’s system, party leaders often have more power over important decisions than those in official positions.
The post of PBoC Communist Party leader, for example, has yet to be announced.
No appointments have been announced for those who will lead some of the powerful new bodies approved last week by parliament, suggesting there could be another shake-up of the leadership team after the annual meeting.
Apart from the new financial regulator, this includes a national data bureau to oversee the country’s data strategy.
Among other appointments announced on Sunday, Xi retained Wang Wentao as trade minister and Liu Kun as finance minister and nominated Zheng Shanjie to take over the powerful planning body, the National Development and Reform Commission.
On Saturday, the NPC confirmed the appointment of Xi’s close ally, Li Qiang, a former Shanghai party leader, as second president. As prime minister and head of the State Council, Li’s main task is to revive the economy that has been under control by the Covid control and the crackdown on the technology industry.
The retention of Yi, Liu Kun and other competent technocrats will send a message that the State Council under Li is committed to opening up to the outside world, said Henry Huiyao Wang, president of the Center for China and Globalization in Beijing.
These figures are China’s most important interlocutors in meetings such as the G20. “The financial and banking sector has become one of the most important areas in China’s opening,” Wang said.
Xi also retained Ma Xiaowei as minister of the National Health Commission, a critical position as China pursued its zero-Covid strategy last year.
Additional reporting by Ryan McMorrow and Nian Liu in Beijing