China cen­tral banker Zhou’s book may fuel re­tire­ment spec­u­la­tion

The Pak Banker - - Front Page -


The pub­li­ca­tion of a book by Zhou Xiaochuan may fuel spec­u­la­tion that China’s long­est-serv­ing cen­tral bank gover­nor since the 1960s is close to re­tir­ing.

“The Global Fi­nan­cial Cri­sis” in­cludes 45 speeches, ar­ti­cles and in­ter­views by Zhou, 64, from 2007 to 2012 on his views of the in­ter­na­tional tur­moil, China Busi­ness News, a Shang­hai-based news­pa­per, re­ported on Oct. 29. The most re­cent is from June and 24 items are be­ing pub­lished for the first time, the news­pa­per said, cit­ing a pub­lisher’s de­scrip­tion.

“The ex­pec­ta­tion is that he will ei­ther re­tire or be moved else­where be­cause he’s been in his job a long time,” said Willy Wo-Lap Lam, ad­junct pro­fes­sor of his­tory at the Chi­nese Univer­sity of Hong Kong. “The pub­li­ca­tion of the book looks like a swan song.”

Zhou presided over China’s first change in cur­rency pol­icy in a decade, when of­fi­cials ended the yuan’s peg to the dol­lar in 2005, and is help­ing to over­see a loos­en­ing of con­trols on in­ter­est rates. His sta­tus may be­come clearer at a Com­mu­nist Party congress start­ing next week, where the party will name its cen­tral com­mit­tee in a once-a-decade lead­er­ship tran­si­tion. If he’s no longer a mem­ber, that could sig­nal a change.

Zhou is ap­proach­ing a decade in the job af­ter tak­ing the role in De­cem­ber 2002. His age in­di­cates that he’s likely to step down soon, said Yao Wei, China econ­o­mist at So­ci­ete Gen­erale SA in Hong Kong.

The book “is his sig­nal to ev­ery­body that his ten­ure is com­ing to an end,” said Bo Zhiyue, se­nior re­search fel­low at the Na­tional Univer­sity of Sin­ga­pore’s East Asia In­sti­tute. The book wasn’t avail­able from the cen­tral bank, which said it would be on sale soon. The Peo­ple’s Bank of China didn’t im­me­di­ately re­spond to faxed ques­tions seek­ing com­ment on when Zhou may leave his role.

Pre­vi­ous col­lec­tions of Zhou’s ar­ti­cles in­clude a July 2008 book con­tain­ing re­marks from 1991 to 2004 on eco­nomic re­forms, and a De­cem­ber 2008 book, ac­cord­ing to list­ings on e-com­merce sites and dang­

Shen Jian­guang, chief Asia econ­o­mist at Mizuho Se­cu­ri­ties Asia Ltd. in Hong Kong, said the tim­ing of the new work doesn’t nec­es­sar­ily mean Zhou will re­tire and a de­ci­sion will come af­ter the congress.

Given that Zhou was a “scholar in the be­gin­ning” and not a po­lit­i­cal leader and has had many ar­ti­cles pub­lished be­fore, the book is “just a co­in­ci­dence, not any sig­nal,” said Shen, who for­merly worked at the Euro­pean Cen­tral Bank. Dur­ing the global fi­nan­cial cri­sis, Zhou ar­gued for re­duc­ing the world’s de­pen­dence on the dol­lar, urg­ing the In­ter­na­tional Mone­tary Fund to ex­pand the use of so-called Spe­cial Draw­ing Rights and move to­ward a “su­per-sov­er­eign re­serve cur­rency.”

The PBOC, un­like cen­tral banks in the U. S., U. K. and Europe, doesn’t have po­lit­i­cal in­de­pen­dence and its ac­tions are sub­ject to the ap­proval of, or de­cided by, China’s cab­i­net.

This year the cen­tral bank has twice low­ered in­ter­est rates and twice cut lenders’ re­serve re­quire­ments in re­sponse to the deep­est eco­nomic-growth slow­down since 2009. The cen­tral bank also widened the yuan’s trad­ing band against the dol­lar to 1 per­cent from a daily range of 0.5 per­cent in place since 2007.

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