China appoints US-trained economist head of central bank

Zhou Xiaochuan, who is retiring after a record 15 years in the post, is the most prominent Chinese figure in global financial circles.

By: AP | Beijing | Published: March 19, 2018 9:51 am

Yi Gang, 60, received his Ph.D. from the University of Illinois and taught at Indiana University. (Reuters)

China’s leadership has appointed a US-trained economist to succeed the longtime governor of its central bank, Zhou Xiaochuan, at a time when the ruling Communist Party is trying to reduce financial risks and surging debt.

The ceremonial Chinese legislature on Monday approved the appointment of Yi Gang, a veteran deputy central banker who is known to foreign companies, investors and regulators as head of China’s foreign exchange regulator, to lead the People’s Bank of China.

Yi, 60, received his Ph.D. from the University of Illinois and taught at Indiana University.

Zhou, who is retiring after a record 15 years in the post, is the most prominent Chinese figure in global financial circles. At 70, he is well beyond official retirement age but stayed on following the handover of power to a new generation of leaders under President Xi Jinping in what was seen as an effort to reassure companies and financial markets of stability.

The appointment comes as Beijing is trying to rein in surging debt that prompted international ratings agencies to cut its credit rating last year. The ruling Communist Party has declared controlling financial risk a priority this year.

Zhou warned in October that rising debt could have a “severe impact” on the economy but said last week regulators believed they had debt under control.

The formal powers of China’s central bank governor are limited despite the position’s high profile. Unlike central banks of other major economies, the People’s Bank doesn’t make monetary policy. Instead, its mission is to carry out policy made by an official body the identity of whose members is secret.

The People’s Bank is widely seen as an advocate of conventional, market-oriented economics.

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