China forms new economic team as Xi kicks off second term

BEIJING: China elevated a key confidante of President Xi Jinping to one of the top positions in government on Monday as Beijing cracks down on riskier financing and a debt build-up that may pose systemic risks to the world’s second-largest economy.
The endorsement of Liu He as a vice premier by the country’s largely rubber-stamp parliament also comes as the United States presses China to cut its trade surplus by $100 billion. Harvard-educated Liu, 66, was the most prominent envoy to visit Washington recently to prevent the outbreak of a trade war.
While most of the personnel changes on the government’s economic team were widely anticipated, the choice of Yi Gang as the new head of the People’s Bank of China (PBOC) was unexpected.
Yi is a vice governor of PBOC and a protege of outgoing chief Zhou Xiaochuan. His appointment is seen as pointing to continuity in monetary policy even as one of the world’s biggest central banks is gaining considerable new regulatory powers.
Yi will have a weighty first test — the US Federal Reserve is expected to raise interest rates on March 21, a day after China’s annual parliament ends, and markets are keen to see if the PBOC follows with a modest move of its own.
The head of a newly merged banking and insurance regulator is also expected to be announced on Monday. Reform-minded Guo Shuqing, 61, the current chair of the China Banking Regulatory Commission, is viewed as the leading candidate.
Liu He is expected to help improve supervision and coordination among regulators and the central bank to fend off financial risks, as head of the cabinet-level Financial Stability and Development Commission (FSDC).
That would put Liu on a similar standing with former economic tsar Zhu Rongji, known for his tough handling of hyperinflation and the economic chaos in the 1990s.
TOP DIPLOMAT: Foreign Minister Wang Yi was on Monday appointed as one of its five state councillors, giving him the country’s top diplomatic post in a vote of confidence for his strong defence of China’s interests amid a host of overseas challenges.
State Councillors, who report to the Cabinet, are more senior than ministers and it is unusual, though not unprecedented, for an individual to hold both positions.
Wang’s elevation was approved by China’s largely rubber stamp parliament in a vote on Monday.
Wang, 64, has been China’s foreign minister since 2013. A career diplomat and fluent Japanese speaker, he has also served as China’s ambassador in Tokyo and head of China’s policy-making Taiwan Affairs Office.
Likened to a “silver fox” by China’s state media and online admirers, due to his looks and his diplomatic wiles, Wang is regarded as suave and charming, but tough, by foreign diplomats.
Unusually friendly to the foreign media for a senior Chinese official, Wang has won plaudits in China for his tough line on issues like the disputed South China Sea and quick-witted — sometimes bad-tempered quips — to counter criticism of China. — Reuters