Bankers Gain Over Engineers as Xi Promotes Future China Leaders
Bankers Gain Over Engineers as Xi Promotes Future China Leaders
(Bloomberg) -- Chinese President Xi Jinping is installing ex-bankers and former executives from state-owned enterprises to key political springboards, suggesting future governments could look very different from the current one dominated by engineers.
A survey by the Economist Intelligence Unit found that 10 of the 16 politicians born in the 1970s who now hold “sub-provincial” or “sub-ministerial” posts hail from banking or industrial SOE backgrounds. Such prominent ranks often come with membership to a provincial party standing committee or a vice-ministerial role, well-positioning them for top posts in China’s seniority-centric political system.
The financial backgrounds of the potential new guard -- including five with extensive banking experience -- stand in contrast to those of the current members of the party’s all-powerful 25-member Politburo. None of them have worked in the financial sector, and most, including President Xi Jinping, are engineers by training.
“The lack of financial expertise at the top of the party explains the promotion of younger officials with experience in the sector, given that managing financial risk has moved up the policy agenda,” the report said.
The financial backgrounds of the new generation of officials could have implications for economic policy, the EIU said.
They include Yang Jinbai, the vice-chairman of Guangxi province and former deputy general manager of state electric utility monopoly State Grid; Zhuge Yujie, secretary-general of the Shanghai municipality party standing committee, whose early career was spent with local SOEs; and Li Bo, vice-chairman of the All-China Federation of Returned Overseas Chinese, the former director-general of the central bank’s monetary policy department.
“While an engineer-turned-politician might be happy to approve the type of massive infrastructure projects associated with China’s rapid development, an official with financial experience will hold the purse strings more tightly,” the report said. “For advocates of market reform, this represents grounds for optimism about China’s long-term economic policy trajectory.”
Xi’s preference for promoting executives from SOEs was clear during a reshuffle ahead of the 19th Party Congress in 2017, a twice-a-decade meeting where key policy decisions and personnel changes are often unveiled. Between 2015 and 2017, he installed eight former executives from state-owned firms in top provincial leadership posts across China -- doubling the four ex-corporate managers who were serving ahead of China’s previous big leadership shuffle in 2012 -- Bloomberg reported at the time.
At the congress, Xi broke with decades of tradition to unveil a new leadership lineup that didn’t include a clear potential heir. His push to scrap term limits in 2018 later paved the way for him to remain in office indefinitely, leaving the party to forge ahead with no obvious successor to his rule.
--With assistance from Ruth Pollard.
To contact Bloomberg News staff for this story: Dandan Li in Beijing at dli395@bloomberg.net
To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Karen Leigh, Colin Keatinge
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With assistance from Bloomberg