China's appointment of financial technocrat Pan Gongsheng to a top political post at the central bank points to growing concerns within the country's leadership over systemic risks in its sprawling financial sector, policy insiders and analysts said.
Pan, who came to prominence fighting capital outflows, will be in position to take over the top job at the People's Bank of China when Governor Yi Gang steps down, two policy sources told Reuters.Pan, central bank deputy governor since 2012 who turns 60 this month, is not expected to deviate from China's measured pace of policy easing to support the recovery, analysts said.
In 2016, Pan also took on the role of China's top foreign exchange regulator, managing the world's largest foreign exchange reserves of around $3.2 trillion. It is not immediately clear how Pan will look to make an impact, but PBOC watchers expect him to steer policy to support the economy, even as the central bank has"Pan's appointment will help maintain policy continuity and stability, as we face pressures internally and externally," said Gu Tianyong, an influential economist at the Central University of Finance and Economics in Beijing.
Zhou and Yi introduced pro-market reforms during their mandates, but the new structure limits PBOC's policymaking abilities and fits better with Pan's focus on risks, analysts said.The world's second-largest economy, under an overall debt burden of three times its output, is struggling to gain momentum due to waning external demand and its failure to lift household consumption, a long-standing weak spot.
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