November 14, 2012 / 11:09 AM / 5 years ago

UPDATE 1-China central bank job up for grabs as Zhou set to retire

By Nick Edwards and Xiaoyi Shao

BEIJING, Nov 14 (Reuters) - China’s central bank governor, Zhou Xiaochuan, is likely a step nearer retirement on Wednesday after he was left out of a key policymaking group of the ruling Communist Party.

Zhou’s name was a notable absence from the list of 205 members of the party’s Central Committee, membership of which is a condition of holding a cabinet-ranked job such as central bank chief.

Zhou turns 65 - the mandatory retirement age for a Chinese cabinet minister, although there are cases where people have stayed in post beyond it - in January. He has been central bank chief since December 2002.

A spokesman at the PBOC declined to comment when asked by Reuters about the decision.

Market analysts have long thought that Zhou was likely to leave the PBOC in any reshuffle of top economic posts prompted by a change of leadership at the top of the party, agreed in a once-a-decade handover of power at a congress held in Beijing this past week.

The surprise though is to see him out of the party’s inner circle of power that precludes him from elevation to another senior role, such as state councillor, from which many analysts had expected him to drive the next round of long-anticipated financial market reforms.

A state councillor ranks as a national-level leader. The retirement age for such posts is 67.

While there was no immediate official announcement of any change at the top of the central bank, market talk centred on the elevation of four men - regarded by analysts as possible PBOC chiefs - to the committee Zhou is leaving.

Financial sector regulators Guo Shuqing, chairman of the China Securities Regulatory Commission (CSRC), and Xiang Junbo, chairman of the China Insurance Regulatory Commission (CIRC), were elevated to the central committee.

So too were Lou Jiwei, chairman and CEO of the China Investment Corporation sovereign wealth fund, and Bank of China chairman Xiao Gang.

“It’s pointless to try to predict who will be the next central bank chief,” Shen Jianguang, chief economist at Mizuho in Hong Kong, told Reuters. “All we know is that Zhou is going to retire.”

Guo, 56, who has held positions as the head of State Administration of Foreign Exchange and China Construction Bank, is seen as the front-runner as he has a similar background to Zhou - both being well-respected scholars who were architects of China’s economic reform plans in 1980s.


Two other notable departures from the central committee were Finance Minister Xie Xuren and Zhang Ping, chairman of the powerful National Development and Reform Commission - the top economic planning agency.

Commerce Minister Chen Deming, previously an alternate member of the central committee, was not on the new list of alternate members, also implying he will be retiring.

It was not immediately clear when changes to the portfolios occupied by incoming and departing men would take place.

Nothing may change before newly appointed leaders at the very top of the party - likely to be confirmed on Thursday as Xi Jinping and Li Keqiang - formally take up government posts in March 2013.

The PBOC’s Zhou has been a vocal advocate of market-based reforms, driving the wider international use of the yuan currency for trade settlement and promoting regulatory shifts to smooth the opening of country’s capital account and currency convertibility.

The central bank, on Zhou’s watch, was pivotal in forging a consensus within the party leadership that led to the landmark revaluation of the yuan in 2005 and the decision in June 2010 to end a two-year peg to the dollar introduced to help China weather the global financial crisis.

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