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Chinese bank executive in line to take the helm at PBoC

Zhu Hexin, one of China’s most senior commercial bankers, is among the frontrunners to take over as the governor of the country’s central bank as Beijing prepares to overhaul the leadership of its most important financial regulatory institutions next month.

If his nomination is confirmed, Zhu, the chair of state-owned conglomerate Citic Group, would succeed Yi Gang as governor of the People’s Bank of China, two people familiar with the nomination said.

The appointment of the new central bank leadership is expected to be reviewed at the annual meeting of China’s rubber-stamp parliament, the National People’s Congress, in early March.

Apart from appointing new leaders at the financial regulators, the party is also expected to undertake a wider government reshuffle, including appointing new ministers.

The changes will come at a crucial moment for China’s economy, which is bouncing back from the austerity of President Xi Jinping’s zero-Covid polices last year.

It also follows a Communist party conference in October, in which Xi was able to appoint his own loyalists to the Politburo standing committee, the party’s most senior decision-making body.

Apart from a pandemic blip in 2020, when gross domestic product expanded just 2.2 per cent, China’s growth rate last year of 3 per cent was the slowest since 1976.

The new appointments will be closely watched by the market after Xi moved in recent years to exercise closer control over the economy, cracking down on private entrepreneurs as part of his policy of “common prosperity”

Economic challenges facing China’s central bank include fostering a recovery in the property market, with many of the country’s main developers defaulting on their debts. Other problems include controlling systemic financial risks in the wake of corporate and financial distress caused by Covid.

Among other potential appointments expected to be announced at next month’s legislative meeting, Wu Qing, the Shanghai vice-mayor who supervises the financial and business affairs of China’s financial hub, is the leading candidate to head the country’s top securities watchdog, the China Securities Regulatory Commission.

Yi Huiman, the chair of the CSRC, is among the favourites to take over at the China Banking and Insurance Regulatory Commission, the banking regulator, according to a separate source familiar with the nomination.

Zhu’s candidacy for the PBoC, which was first reported by the Wall Street Journal, follows a long career at state-owned lenders, starting with Bank of Communications, where he served for two decades until 2015.

Zhu took other roles in rival Bank of China and in the local government in western Sichuan province before he was appointed as vice-governor at the PBoC in 2018.

Two years later, in 2020, Zhu was appointed chair of Citic Group, where he beefed up the conglomerate’s role in financial bailouts of struggling institutions including Huarong Asset Management and regional banks.

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