As China struggles to deal with the slowdown of the world’s second-largest economy, it has embarked on a new strategy of placing financial experts in provinces to manage risks and rebuild regional economies.
Since last year, Chinese President Xi Jinping (習近平) has put 12 former executives at state-run financial institutions or regulators in top posts across the nation’s 31 provinces, regions and municipalities, including some who have grappled with banking and debt difficulties that have raised fears of a financial meltdown.
Only two top provincial officials had such financial background before the last leadership reshuffle in 2012, according to Reuters research.
Photo: AFP
Among the experts promoted is Beijing Vice Mayor Yin Yong (應勇) a former deputy central bank governor, and Shandong Deputy Provincial Governor Liu Qiang (劉強), who rose through the nation’s biggest commercial banks, from Agricultural Bank of China (中國農業銀行) to Bank of China (中國銀行).
Another newly promoted official, Chongqing Vice Mayor Li Bo (李波), had until this year led the central bank’s monetary policy department.
The appointments — overseeing economies larger than those of small countries — would appear to put those officials in the fast lane as China prepares a personnel reshuffle in 2022, when about half of the 25 members of the Politburo could be replaced, including Chinese Vice Premier Liu He (劉鶴), who is leading economic reform while doubling as chief negotiator in trade talks with the US.
“Bankers are now in demand, as local governments are increasingly exposed to financial risks,” said Feng Chucheng, a partner at Plenum, an independent research platform in Hong Kong.
“These ex-bankers and regulators are given the task of preventing and mitigating major financial risks,” he said.
The appointments have come as economic growth has slowed to its weakest in nearly three decades, while government infrastructure investment has fallen.
Five regional banks were hit with management or liquidity problem this year, raising the prospect of devastating debt bombs lurking in unexpected corners.
“We need to be well-prepared with contingency plans,” Xinhua news agency said after a major annual economic meeting headed by Xi this month.
The economy faced “increasing downward economic pressure amid intertwined structural, institutional and cyclical problems,” it said.
With pressures mounting, local governments are expecting to take the lead in managing their financial scares and cutting the cost of rescue with local intervention, analysts said.
“Appointing financial vice governors to provinces can help better integrate financial policies into local practice, and to prevent financial risks beforehand,” said He Haifeng (何海峰), director of Institute of Financial Policy at the Chinese Academy of Social Science, a government think tank.
“Such appointments have also showcased a change of manner in official appointments,” He said.
Financial executives were long shunned for leadership positions.
Banks were nationalized after the Chinese Communist Party took power in 1949 and many bankers were purged during the Cultural Revolution.
Xi started to stress the importance of financial expertise and to elevate the status of executives in 2017.
“Political cadres, especially the senior ones, must work hard to learn financial knowledge and be familiar with financial sectors,” Xi said in a national meeting on financial affairs.
Half of the 12 former financial executives elevated to provincial leadership posts under Xi were born after 1970.
Liaoning Vice Governor Zhang Lilin ( 張酈林), 48, a veteran banker who spent two decades in the nation’s third-largest lender, Agricultural Bank of China, was appointed days after three state-controlled financial institutions announced investment in the then-troubled Bank of Jinzhou (錦州銀行).
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
RSS