Guo Shuqing, head of China’s new regulator for the banking and insurance sectors, has been appointed the Communist Party chief and deputy governor of the People’s Bank of China (PBOC), official publication Financial News reported on Monday.
As the party chief of PBOC, Guo will exert the widest influence at one of the world’s most powerful central banks, which unlike its peers in some countries is not fully independent. Its decision-making is broadly subject to the political influence of the Communist Party and the government.
Two sources with direct knowledge of the internal announcement previously told Reuters that Guo would take on those two positions. The appointment also confirms a Reuters report on Sunday that Guo can be expected to be installed soon in the role of Communist Party chief of the PBOC, according to sources.
To have the same person serve as both the PBOC’s party chief and a deputy governor is unusual in China’s financial regulatory regime.
As PBOC’s party chief, Guo outranks new PBOC Governor Yi Gang politically, but as a vice governor he is one step below Yi.
For 15 years, Zhou Xiaochuan, Yi’s mentor, had served as both PBOC’s governor and party chief. Guo himself is both chairman and party head of the newly established China Banking and Insurance Regulatory Commission (CBIRC).
Both men will support Liu He, China’s new vice premier and a key economic adviser and trusted ally to President Xi Jinping, to push the central government’s development and reform agenda.
Guo’s unique role will allow him to coordinate policymaking and implementation between PBOC and CBIRC, and help advance Beijing’s financial reforms, sources said.
As PBOC’s party boss, he will ensure that the central bank is aligned with the Communist Party’s agenda, which is to situate the party at the core of China’s economic leadership, sources said.
Politically influential, Guo is a full member of the Communist Party’s Central Committee – the largest of the party’s elite ruling bodies. Yi is just an alternative member.
However, Yi is still expected to be in charge of PBOC’s day-to-day operations, sources said.
Yi, a U.S.-educated economist and 21-year central bank veteran and previously Zhou’s right-hand man, will be able to ensure the consistency of the central bank’s monetary policy, sources said.
Simultaneously holding the positions of party boss and deputy ministerial head is not without precedent in China. Zhang Yesui is currently the party chief of the foreign ministry and a vice foreign minister at the same time.
The economy and the party have become ever more intertwined since a twice-a-decade party congress in October when President Xi Jinping consolidated his grip on power. Party control is deemed necessary to help push through reforms, including those in the economic and financial spheres.