Guo Shuqing, United Nations agency is stepping down as governor of Shandong province to require management of China’s banking regulator, returns to Beijing at a decisive moment for the country’s national economy following years of unsafe economic process.
The immediate challenge for the new chairman of the ChinaBanking regulative Commission (CRBC) is formidable – Guo should smartly address troubled loaning within the country’s 232 trillion yuan ($34 trillion) banking sector and implement more durable measures to manage gently regulated shadow banking activities.
For Guo, extremely thought to be one amongst China’s most old money services professionals, returning to Beijing follows associate accomplished career together with appointments as chairman of China Construction Bank house (SS:601939) (HK:0939), the top of the China Securities regulative Commission, and last as a provincial governor.
Guo is taken into account by several as a zealous reformist, drawing up quite seventy new policies throughout his eighteen months as chief stock exchange regulator from 2011 to 2013.
He tried to revive a stagnant stock exchange, boosting participation by foreign investors whereas crusade against widespread trading, poor info revealing and weak company governance.
He additionally advocated reform of the initial public offerings system and promoted the delisting of loss-making corporations.
“Guo’s appointment to CBRC brings him back to his space of core expertise: banking,” same James tube, a former freelance director at 2 Chinese banks and author of China’s BankingTransformation.
“CBRC may be a huge, difficult organization. you’ve got to be a competent manager. Guo Shuqing has tested unquestionably he is capable of doing the work.”
Guo, a philosophy major and a visiting scholar at Oxford University, is a native of China’s Inner Mongolia region and is a fluent English speaker. Since 2001, he also has served as a deputy central bank governor and as a top foreign exchange regulator.
Like central bank governor Zhou Xiaochuan and former finance minister Lou Jiwei, Guo is widely respected as a reform-minded policymaker.
He was appointed to run CBRC to replace Shang Fulin, who has reached the official retirement age of 65.
BAD LOANS, SHADOW BANKING
Degenerating and containing risk have been identified as top priorities for the current government, as China’s top leaders prepare to gather at the twice-a-decade leadership reshuffle of the ruling Communist Party this autumn.
China’s banking sector is dominated by state-owned lenders, which are responsible for supporting political and economic priorities of central and provincial governments.
Guo, 60, also must wrestle with the thorny problems associated with helping regulate China’s fast-growing online finance industry, which has become a hothouse for both innovation and fraud.
A prolific author with more than 300 research papers and 16 books to his name, Guo inherits a banking sector that has expanded swiftly, fueled by the country’s rapid credit growth.
Banking assets over the last five years have more than doubled, helping to push the volume of non-performing loans at Chinese commercial banks to 1.51 trillion yuan by the end of last year, the highest since 2005.
China’s shadow banking industry, comprising a spread of opaque and lightly-regulated money merchandise, additionally has full-grown speedily underneath the colour of monetary innovation.
Shadow banking’s trap with ancient money establishments, particularly a lot of vulnerable tiny and mid-sized banks, has raised issues concerning potential general risks.
Shang, United Nations agency light-emitting diode the CBRC from 2011 to 2016, long-faced criticism for not being firm enough on those activities.
“Shang has not been a tricky regulator keep things in restraint,” same Fraser Howie, associate freelance analyst and author of Red market economy. “Banking is much a lot of difficult and opaque than it had been before.”
“SERIOUS, RESPECTED” REGULATION
Guo’s has to start up with “serious and respected” regulation addressing shadow banking merchandise, Howie said.
Guo can work closely with China’s powerful financial organization, that is alteration oversight of the stormy quality management business that has drawn the attention of investors seeking high yields and fast profits.
Before connexion the securities regulator, Guo steered China Construction Bank house to its roaring initial share sale, that raised $8 billion.
Guo can have to be compelled to navigate the CBRC through the money regulative system shake-ups within the returning months and years. Market speculation concerning unifying banking, insurance, securities regulators underneath the leadership of the financial organization has been rampant since China’s stock exchange crash in 2015.
“Don’t take an excessive amount of risk. however not insufficient either. If you do not take any risk however are you able to build any cash,” Guo told Reuters in associate interview in 2010.