China wealth fund, Commerce Ministry to get new heads

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BEIJING: China will likely appoint savvy international dealmakers to run its giant sovereign wealth fund and Commerce Ministry in a soft power push to soothe fears over a planned spending spree to boost Beijing’s ownership of strategic global assets. Securities regulator Guo Shuqing is tipped to take the helm at the $482 billion state investment vehicle, China Investment Corp (CIC), and China’s chief trade representative, Gao Hucheng, is seen running the Commerce Ministry, two sources with leadership ties told Reuters.

The appointment of seasoned, English-speaking financial negotiators to run the two agencies is a sign that China’s new leaders would make commercial logic a major thrust of the push for market access Beijing needs for planned acquisitions of $560 billion of overseas assets in the five years to end-2015.

“The next government will pay more attention to trade policy and investment policy and the direction will be more open,” said Tu Xinquan, associate director at the China Institute of WTO Studies at the University of International Business and Economics in Beijing.

Sources with ties to the leadership and officials at China’s top ministerial think-tanks say the change of personnel reflects the focus President-in-waiting Xi Jinping and Premier-designate Li Keqiang have on furthering China’s ambitions in the global economy. Academics said such appointments fit with the overall external thrust of China’s new leadership.

“Here you have people who know the global system, and this is about China becoming much more active in it,” said Scott Kennedy, director of the Research Center for Chinese Politics & Business at Indiana University. Guo has climbed to the top of China’s financial ranks by sticking to a formula combining a balanced approach to risk with gradual reform. His favourite proverb - “Listen to both extremes and take the middle course” - speaks volumes about the approach the former chairman of China Construction Bank (CCB) took to managing the world’s second-most valuable financial institution.

“Don’t take too much risk. But not too little either. If you don’t take any risk how can you make any money,” the 56-year old quipped in an interview with Reuters in 2010.

The philosophy major and Oxford-educated scholar, who speaks English fluently, has moved easily between academia, government and a rapidly growing commercial sector that has helped China become the world’s second-biggest economy.
He joined CCB as chairman in 2005 after a $22.5 billion bailout left the State Administration of Foreign Exchange, which Guo headed, as the bank’s largest shareholder. Seven months after Guo took over, CCB sold shares publicly for the first time in Hong Kong and two years later in Shanghai - China’s first state-owned lender to float shares in both bourses.

“The financial markets are generally quite positive on Guo, because he’s got a track record of delivering on his promises,” said Stanley Li, an analyst at Mirae Asset Securities in Hong Kong who has met Guo a number of times. “A reformer who is able to deliver is actually rare in China, as you tend to get people who talk a lot but can’t deliver, or you get those who just don’t want to rock the boat.”

Gao has been in charge of China’s global trade negotiations since 2010, and his years of experience as a trade negotiator could elevate the Commerce Ministry’s role in policy battles, sources say.

The 61-year old, who didn’t join the Communist Party until his late 30s, worked at the ministry’s predecessor – the Ministry of Foreign Trade and Economic Cooperation – beginning in the early 1990s. Currently the longest serving of the Commerce Ministry’s vice ministers, Gao studied abroad, worked in Africa, and earned his doctorate in sociology in Paris, according to his official biography.

The likely appointments are part of a sweeping redistribution of top financial posts that will take place during the annual 2-week full session of parliament that began on Tuesday.

 

Courtesy: The News


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