SHANGHAI (Reuters) - China named new heads to three top financial regulatory posts on Saturday, the official Xinhua news agency said, the first big step in a comprehensive leadership change that will culminate when its top political leaders retire.
The personnel changes are the highest-profile yet in a broad transition of top officials that will run through the next 17 months at a time when the global economy is grappling with a debt crisis and looking to the world’s second-largest economy for financial support.
China’s President Hu Jintao and Premier Wen Jiabao are due to retire their Communist Party posts at the 18th Congress next fall, and their presidency and premiership positions at a parliament session in March 2013.
The Xinhua announcement on Saturday marks a handing over of power to a younger generation and confirms a Reuters report citing three independent sources that a shake-up would be announced as early as this week.
A broad number of officials will retire from Communist Party, state, military and regulatory jobs in the coming months, forced out as they hit the official retirement age.
“There is going to be a major reshuffling of leadership positions in the next two years. We’re going to see a big game of musical chairs as some officials retire and others move into empty slots and advance along their careers,” said Patrick Chovanec, associate professor at Tsinghua University’s School of Economics and Management in Beijing.
Securities regulator Shang Fulin, 54, was named chairman of the China Banking Regulatory Commission (CBRC), replacing Liu Mingkang. He has proven adept at navigating choppy financial waters, managing to introduce a raft of much-needed reforms to stock and futures markets despite investor jitters over their potential impact.
As head of the China Securities Regulatory Commission (CSRC), Shang oversaw a series of innovations, including the launch of a Nasdaq-style second board, index futures and margin trading, as well as the unloading of a large overhang of previously untradable shares in state companies.
Former China Construction Bank chairman Guo Shuqing, 55, will take up the post of chairman of the China Securities Regulatory Commission. Late on Friday, the bank said Guo resigned due to the need to attend to state financial work.
Xiang Junbo, 54, former chairman of Agricultural Bank of China, will take up the post of chairman of the China Insurance Regulatory Commission (CIRC). AgBank also said on Friday that Xiang, a war hero-turned-banker, resigned “due to the need of state financial work.”
Xiang will oversee an industry that includes the world’s two biggest life insurers — China Life and Ping An — and is currently facing headwinds from weak investment returns.
“State financial work” will entail keeping China on its ambitious path of reform as it continues to ease controls over key sectors and prices, open up to foreign companies and promotes a fledgling offshore market for the yuan in Hong Kong.
Age limits will force out older leaders from throughout the Communist Party, local governments, military, and cabinet ministries, making way for younger leaders to move up.
Liu who headed the CBRC and Wu Dingfu, chairman of the CIRC, have both reached the compulsory retirement age of 65 for officials who hold a rank equivalent to a cabinet minister.
“It’s not at all unusual for people to move from a posting with a state-owned bank to a posting with a regulatory agency or a ministry,” said Tsinghua University’s Chovanec.
“These are not two separate worlds in China; this is a single system where the (Communist) Party decides postings for members inside ministries and bureaucracies.”
Additional reporting by Terril Jones in Beijing; Editing by Brian Rhoads