China reshapes economic team to battle trade tensions, debt pile

US-educated officials promoted to key positions

BEIJING: Mr Xi Jinping reshaped his core economic team yesterday, promoting two trusted, US-educated lieutenants to key positions at a time of escalating trade tensions with Washington and concerns over a growing debt mountain.

Parliament approved the nomination of Mr Xi's influential adviser Liu He, a Harvard-educated Communist Party official who as vice-premier is expected to oversee the financial and economic sectors.

The deputy governor of the People's Bank of China (PBOC), Mr Yi Gang, was elevated to head the central bank, replacing Mr Zhou Xiaochuan, another advocate of reforms who had held the job since 2002.

The appointments were made at an annual session of the National People's Congress that has boosted Mr Xi's influence on the world's second-largest economy, with presidential term limits abolished and his name added to the constitution.

The reshuffle gives Mr Xi trusted hands at the economic controls as China faces the prospect of a tit-for-tat trade war with the US and concerns that ballooning debt has made the country vulnerable to a potential crisis.

Mr Liu travelled to Washington earlier this month and met with US officials at the White House, but his trip has not stopped Mr Donald Trump from considering new trade measures against China.

"The most important task is carrying out a stable monetary policy, and at the same time pushing forward financial reform and opening, while maintaining financial stability," Mr Yi told reporters after his appointment.

"There will be a series of reform and opening policies and measures to come," Mr Yi said, according to the central bank's news outlet Financial News.

A massive overhaul of China's bureaucracy announced last week - the biggest in a decade and designed to boost efficiency - will give the central bank more power to push through such reforms.

The PBOC was given the responsibility of drafting new laws and regulations for the banking and insurance sectors, and with it new authority over China's financial system.

An economic reformer, Mr Yi studied in the US, earning a PhD in economics from the University of Illinois and then a tenured faculty position at Indiana University, before returning to China to take a position at Peking University. He moved to the central bank in 1997.

Chief among his concerns will be China's mounting debt, whose growth analysts say resembles trends that precipitated financial crises elsewhere.

Relations with the US are also among the first challenges Mr Yi and Mr Liu are likely to face.

In addition to promoting Mr Liu, the parliament on Saturday elevated Mr Wang Qishan, a Xi confidant and former trade negotiator, to the vice-presidency, giving him another experienced ally to deal with Washington.- AFP