China re­places fi­nance min­is­ter Lou

The Myanmar Times - - International Business -

CHINA yes­ter­day re­placed fi­nance min­is­ter Lou Ji­wei, state me­dia re­ported, with some an­a­lysts pre­dict­ing more fis­cal stim­u­lus in the world’s sec­ond-largest econ­omy.

Mr Lou was re­lieved of his du­ties and re­placed by 59-year-old Xiao Jie, the deputy sec­re­tary gen­eral of the State Coun­cil, or cabi­net, Xin­hua news agency re­ported with­out giv­ing more de­tails.

Mr Lou, 65, had been the fi­nance min­is­ter since March 2013, pre­sid­ing over a stock mar­ket boom en­cour­aged by au­thor­i­ties – fol­lowed by a rout in the mid­dle of last year.

Citic Bank In­ter­na­tional chief econ­o­mist Liao Qun told AFP that Mr Lou’s re­place­ment could be rou­tine due to his age, but that the new fi­nance min­is­ter could raise mar­ket ex­pec­ta­tions of tax cuts to spur the econ­omy.

Bei­jing will con­tinue its loose eco­nomic stance as it is un­der pres­sure to keep growth sta­ble, he said.

“A new head could mean fis­cal poli­cies could play big­ger roles in boost­ing growth and China could be more ag­gres­sive in fis­cal poli­cies, given it has al­ready used mone­tary tools many times.”

China’s econ­omy grew an an­nu­alised 6.7 per­cent in July-Septem­ber, the same as the first two quar­ters.

The govern­ment has tar­geted 6.57pc growth for the year, fol­low­ing 6.9pc last year – the slow­est rate in a quar­ter of a cen­tury.

In 2015 China cut its in­ter­est rate five times and sev­eral times low­ered the amount of cash banks must set aside. It also cut the re­serve rate once this year.

Mr Lou’s suc­ces­sor Mr Xiao spent nearly two decades at the fi­nance min­istry and was ap­pointed head of the State Ad­min­is­tra­tion of Tax­a­tion in 2007.

Ray­mond Ye­ung, chief greater China econ­o­mist at ANZ Bank­ing Group, told Bloomberg News, “This per­son­nel change is not ex­pected to change China’s fis­cal pol­icy.

“The govern­ment is still aim­ing to sup­port growth through a deficit bud­get of 3 per­cent of GDP. Since Xiao has a good un­der­stand­ing of the tax sys­tem, the ap­point­ment can fa­cil­i­tate the con­ti­nu­ity of tax re­form.” –

Photo: EPA

Lou Ji­wei presided over a stock mar­ket boom.

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