China Central Bank Boss's Old Colleagues Recount His U.S. Years

(Bloomberg) -- Before Yi Gang studied economics in the U.S. and ascended through the ranks of China’s central bank, he was sent to work in rural areas at the twilight of the country’s cultural revolution.

Then, history intervened. In 1977, when Deng Xiaoping re-started the annual college entrance examination, the 19-year-old Yi figured he didn’t have enough time to prepare for physics and chemistry exams and his family background wouldn’t allow him to go into politics and law, so he set his targets on the economics department of Peking University.

China Central Bank Boss's Old Colleagues Recount His U.S. Years

He got up at 4 a.m. on the day of the exam, helped the chef cook a breakfast of steamed buns, pickles and porridge for his fellow workers, and packed sweet buns for their lunch. After breakfast at 6:30 a.m., a group of 10 or so young people walked 5 kilometers to the exam site. He passed.

Some 40-odd years later, Yi, now 60, is succeeding Zhou Xiaochuan as governor of the People’s Bank of China. Colleagues who worked with him during his time teaching in the U.S. from 1986 to 1994 recall Yi as humble and hard-working.

"He wasn’t the sort of person who tried to take credit for things; he sort of quietly did his job," said Steven Russell, an economics professor and former colleague of Yi’s at Indiana University-Purdue University Indianapolis. "At least in the beginning of his tenure in the central bank of China, that was probably helpful to him rather than the reverse because it was a time where there was a lot of turmoil."

For more on the PBOC change

Read about Zhou Xiaochuan’s legacy of reform and debt
See what economists say about Yi’s appointment
Click here for a look at the big challenge facing Yi
Here for a look at the PBOC’s growing global heft 
And here for a summary of his recent thoughts on policy

Yi finished his undergraduate work in the U.S. at Hamline University in Minnesota and then went on to receive his master’s and doctorate degrees from the University of Illinois. The recount of how his academic life started stems from articles he has written that are posted on Peking University’s website.

What Yi may have missed in Chinese political opportunities during his studies abroad he made up for in book smarts -- math and statistics, in particular. During his academic studies, Yi was particularly interested mathematical models to analyze and understand the economy, according to George Judge, one of Yi’s professors at the University of Illinois.

Yi did extensive research in econometrics and statistics which ultimately turned into journal articles, according to Judge. His 1986 dissertation was titled "Stein Estimation and Model Selection."

"It was unbelievable to see what happened to him, how he was able to assimilate such a wide area of knowledge and it was also interesting to see the range of problems he was interested in," Judge said in a phone interview.

Duty Calls

After working as a professor for years at IUPUI, Yi returned to his home country in 1994.

"A lot of the reason he went back was a sense of obligation that it was sort of his job to help out the people of China," Russell said.

China Central Bank Boss's Old Colleagues Recount His U.S. Years

Yi’s pay was lean upon his return, recounts a classmate from the Peking University days.

"I asked him, ‘is that enough to make ends meet?,’" said Pan Muping, who was making more than Yi’s monthly payment in a day as an investment banker at the time. "He had to dip into his savings."

Yi’s rise to the head of the PBOC was a surprise to some of his former American colleagues.

"I thought he would never be able to be in charge of a central bank because you needed a communist party connection," according to Robert Sandy, emeritus professor of economics at IUPUI, who worked alongside Yi when they were professors in the U.S. "He was very much a technocrat."

To contact Bloomberg News staff for this story: Shelly Hagan in Washington at shagan9@bloomberg.net, Xiaoqing Pi in Beijing at xpi1@bloomberg.net.

©2018 Bloomberg L.P.

With assistance from Shelly Hagan, Xiaoqing Pi