China is shaking up his economic team ahead of major power shuffle
President Xi Jinping is shaking up his economic team ahead of a major power shuffle as China battles rising financial risks at home and friction with its trading partners
The change, according to people familiar with the matter, involves China’s top banking regulator, the commerce minister and the top economic-planning official, who have all reached the retirement age of 65. Slated to succeed them are two close associates of Mr. Xi and a well-known technocrat, the people said.
The shakeup, expected to be made public within days, was decided on at a Tuesday meeting of the Communist Party’s Politburo hosted by Mr. Xi, one of the people said.
It comes as Beijing prepares to decide the power structure for Mr. Xi’s second term. A twice-a-decade party congress in the fall will give Mr. Xi a chance to pad high-level party and government organs with loyalists, reinforcing his already formidable clout.
Since coming to power in late 2012, Mr. Xi has eroded the consensus-driven, collective-leadership model of his recent predecessors, taking personal charge of the military, the economy and most other levers of power.
The new economic team faces a host of challenges from rising debt levels, asset bubbles, capital outflows and increased political tensions over trade. In the U.S., a key market for Chinese goods, President Donald Trump has pledged to be tough on China.
“There is a lot of uncertainty over the economy right now,” said an official with knowledge of the ongoing shakeup. Mr. Xi has set stability as the overarching goal and “steady hands are needed for those important posts,” the official said.
In November, China’s finance minister, who had aggressively pushed for measures that could squeeze China’s short-term growth, was abruptly replaced by a low-profile bureaucrat.
One surprise in the latest shuffle involves the China Banking Regulatory Commission. Guo Shuqing, currently governor of the prosperous Shandong province in eastern China, is slated to be the next commissioner after the current one, Shang Fulin, retires.
Guo, a former banker and top securities regulator, had long been considered a strong contender as the next central-bank governor, a higher post that has been held by Zhou Xiaochuan for 15 years.
Zhou was allowed to stay on behind the usual retirement age by Mr. Xi when he took office. But Mr. Zhou is now 69 and the succession question at the People’s Bank of China has been water-cooler talk for several years. The people familiar with the latest shakeup said Mr. Zhou isn’t part of it for now.
Before going to Shandong, Mr. Guo, now 60, served as China’s top securities regulator. But his efforts to clean up the stock markets and attract foreign capital put him on a collision course with state-owned companies looking to go public and other regulatory agencies that have seen their roles diminish.
When he was dispatched to Shandong, it was seen by some within the party as his ticket to eventually return to the national stage in a bigger role. Candidates for top jobs are often given provincial leadership roles to gain broader experience.
But as banking regulator, Mr. Guo will be equal in rank to a provincial governor. According to the people with knowledge of the personnel shakeup, the leadership is considering letting him oversee a potential merger between the banking and insurance regulatory agencies.
For months, Beijing has been weighing how to consolidate financial regulation following embarrassing missteps that exacerbated market turmoil. The goal is to fix a fragmented system in which the banking, securities and insurance regulators and the central bank often act in isolation and sometimes even at cross-purposes. The process has been stalled by powerful groups that are unwilling to cede turf.
“Guo Shuqing is tough,” an official close to him said. “He might be able to help move that process along and then get a bigger role afterward.”
The reassignment of Mr. Guo, who couldn’t be reached for comment, was announced within the Shandong government on Thursday. Mr. Guo was scheduled to take an evening train to Beijing, according to an official itinerary reviewed by The Wall Street Journal, and attend a meeting Friday at the party’s Organization Department, which handles personnel matters.
The shuffle also is set to put two of Mr. Xi’s associates in charge of key economic agencies.
Zhong Shan, currently a vice commerce minister and China’s top trade representative, will succeed Mr. Gao, according to one of the people with knowledge of the matter. Mr. Zhong, 61, spent the bulk of his career in his home province of Zhejiang, where he was vice governor from 2003 to 2008—overlapping with Mr. Xi’s tenure as the top party official there from 2002 to 2007.
He Lifeng, who turns 62 this month, is slated to succeed Xu Shaoshi at the National Development and Reform Commission, the person said. Currently an NDRC deputy director, Mr. He had worked under Mr. Xi in the southeastern city of Xiamen, where Mr. Xi was vice mayor from 1985 to 1988.
The three agencies and the information office at the State Council, China’s cabinet, didn’t respond to requests for comment. China’s economic agencies ultimately report to the top leadership.
One of the first signs of the shakeup came when Commerce Minister Gao Hucheng abruptly cancelled a trip leading a business delegation to the Philippines, according to a person familiar with the matter. China informed the Philippines about the cancellation on Wednesday, citing “urgent domestic matters,” the person said.Mr. Gao’s trip had been seen as part of Beijing’s effort to reward Manila with economic benefits in exchange for a less contentious approach to territorial disputes in the South China Sea under Philippine President Rodrigo Duterte.
Foreign Ministry spokesman Geng Shuang said Thursday in Beijing that a planned meeting on commercial ties between the two countries had been postponed “due to some scheduling issues.” He didn’t elaborate. Charles Jose, spokesman for the Philippines Department of Foreign Affairs said he had no information on the matter.