REPORT: China May Push Out Its Central Bank Head
China's long-time Central Bank head Zhou Xiaochuan may be pushed out of office, the Wall Street Journal reports. President Xi Jinping is considering replacing him with someone more in agreement with him over economic reforms, according to party officials.
Over the past few months there has been a distinct shift in Chinese policy. Xi has signaled that the country will no longer use economic stimulus — like infrastructural projects — and low interest rates to grow the economy. Some analysts estimate the country's debt-to-GDP ratio to be at about 250%. The government understands this is not sustainable.
Reform, however, will be painful, and the economy is already showing signs of slowing down. Earlier this month the country released a slew of dismal economic data, including the lowest industrial production since 2008. China may miss its 2014 GDP growth target of 7.5% for the first time in years, and Xi has signaled that he may be OK with that.
According to the Journal, the word is that Zhou may be replaced with Guo Shuqing, a former banker and securities regulator. Guo has been attending important meetings recently.
Replacing Zhou, however, sends a completely different signal. He's a reformist who has tried to lay down the law on lifting government controls of the economy. He is also well-known entity on the international scene and represented China at meetings like the G20.
'Everybody seems to be interested in talking about reform, but they really fear what they are professing to love,' said Zhang Xiaohui, head of the PBOC's monetary-policy department, in a May 2014 meeting, according to a transcript of her remarks viewed by the Journal.