As the China continues its leadership transition, there will be a new face at the head of the People’s Bank of China.
Zhou Xiaochuan, governor of the PBOC since 2002, was not on the list of the Communist Party central committee, signaling the end of his tenure. Zhou will likely be remembered as a reformer who precipitated the appreciation of the yuan relative to the USD by 33% since 2005 and guided the nation through the financial crisis.
Though the rule is not iron-clad, the mandatory retirement age for a Chinese cabinet minister is 65 – the age Zhou turns in January. Some are surprised that Zhou hasn’t received another prominent position in the party, but his own words prove instructive – “when you get old, you need to retire.”
Bloomberg reports that possible replacements for Zhou include bankers Xiao Gang and Jiang Jianqing as well as regulators Shang Fulin and Guo Shuqing.
However, Ee Leen Yueh, fixed-income manager at Singapore-based Aberdeen Asset Management, notes that Zhou’s departure will have little effect on Chinese monetary policy:
”However, in terms of the structure in decision-making, the power still very much lies with the State Council given how important monetary policy is and how much that’s tied to central policy in China. I don’t foresee any changes to that centralized structure even with a new leader on board.”
The next governor of the PBOC will face the challenges of restoring China’s high growth rate, which at 7.4% in 3Q has reached its lowest point in over three years, and managing the continued appreciation of the yuan relative to the USD.
Business Insider Emails & Alerts
Site highlights each day to your inbox.