Analysts say Yi Gang’s reappointment is intended to boost market confidence as China faces major challenges at home and abroad.
China has kept its central bank governor and finance minister in their posts in an unexpected move that analysts describe as an attempt to reassure markets and investors as the country focuses on combating economic headwinds.
Yi Gang, 65, was approved by China’s parliament on Sunday to remain governor of the People’s Bank of China (PBOC), and Liu Kun, 66, to remain on as finance minister.
“The government sent a positive signal to the market by keeping these senior financial experts in cabinet,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.
“The global economic outlook is challenging. Continuity and stability in the management of economic and financial affairs are helpful in increasing market confidence,” Zhang said.
The most significant change in the ongoing annual session of the National People’s Congress is the promotion to prime minister on Saturday of Li Qiang, 63, a longtime confidant of President Xi Jinping. The former Shanghai Communist Party boss is taking on a role in charge of managing the economy, replacing Li Keqiang, 67, who stepped down after two five-year terms.
Xi has installed allies in key roles amid a sweeping government reshuffle as he embarks on a norm-breaking third five-year term as president.
Yi, who was educated in the United States and named PBOC governor in 2018, was widely expected to retire after being removed from the Central Committee of the ruling Communist Party during the party’s once-in-a-five-year congress in October. was left.
Sources had told Reuters news agency last month that Zhu Hexin, chairman of state-run financial conglomerate CITIC Group Corp, is likely to succeed Yi as head of the central bank.
The appointments “indicate that the government has put professionalism, management and the art of fine-tuning at the forefront when it comes to electing the central bank governor and finance minister, as positions at the helm of core economic departments require enormous professional require skills.” said Sun Fei, an economist.
Top Xi aides Ding Xuexiang and He Lifeng, as well as former Tianjin mayor Zhang Guoqing and former party secretary of Shaanxi Province Liu Guozhong, were also appointed as deputy prime ministers.
“Both Ding and He are close political allies of President Xi, and Mr. He and President Xi have known each other for decades,” Nomura analysts wrote in a recent note.
“Such close relationships could benefit the policymaking of the new government and coordination between ministries,” the analysts said.
As expected, Wang Wentao remained as Minister of Commerce.
Zheng Shanjie, governor and deputy party secretary of Zhejiang province, was approved to take over as the head of the National Development and Reform Commission, the powerful state planner.
The government is faced with the task of reviving the Chinese economy, which grew just three percent last year – one of its weakest performances in decades.
China’s housing market, which together with construction accounts for more than a quarter of gross domestic product (GDP), is still in a slump after Beijing began cracking down on excessive borrowing and rampant speculation in 2020.