Chinese leaders are into discussions for replacing the Central Bank chief owing to disagreements over direction of financial policy. Questions are raised as to how deeply and quickly Beijing wants to remake the economy in midst of slow growth.
Xi Jinping, the Chinese leader is considering the removal of Zhou Xiaochuan, the face of Chinese economy to global markets, as a part of wider personnel shuffle that comes after the internal battles are over.
The discussions occur as Mr. Xi tries placing more allies into top positions in the Communist Party, military and government. The personnel shifts are expected around a major party conclave which is to be held in the month of October, said the officials. However, no final decision about Mr. Zhou has been taken.
Since last few months, Mr. Zhou has been constantly pressing for market changes which includes liberalization of interest rates. Meanwhile, the Chinese leadership has concerns over overhauls now placing another burden on an economy which is struggling in order to meet the 7.5 percent annual growth target of the government.
One reason of retaining Mr.Zhou is the fear of market reaction to his departure. Once he is removed, uncertainty can be added about the direction of China’s economic policy making and strength of leadership’s commitment to overhauls.
There would be a subtle shift in balance of power between reactionary and reformist forces after the removal of Mr. Zhou.
Guo Shuqing is the top contender for succeeding Mr. Zhou at the People’s Bank of China.