New Chiefs at China's Top Banks Signal More Reshuffles AheadBloomberg News
Bank of China’s Tian becomes chairman of Construction Bank
President Xi prepares for leadership transition in fall
The reshuffle at the top of two of China’s largest state-controlled banks is the latest phase of a management change for the country’s $40 trillion financial industry, as the government seeks to restrain any turbulence ahead of a twice-a-decade meeting of the ruling Communist Party.
Tian Guoli, formerly chairman of Bank of China Ltd., has been named as the new chairman of China Construction Bank Corp., succeeding Wang Hongzhang, who is retiring, people familiar with the matter said on Monday. Chen Siqing, previously Bank of China’s president, has been appointed to succeed Tian as chairman, the bank said in a statement on Tuesday.
The changes “show leadership reshuffles in financial and economic sectors will become a general trend," said Hu Xingdou, an economics professor at the Beijing Institute of Technology. "The leadership wants to install people that they can trust to clean the troublesome financial industry."
As President Xi Jinping prepares for a leadership transition this fall, China’s regulators have been attempting to clamp down on financial risks, with policymakers now targeting everything from corporate acquisitions to returns on savings products banks sell to yield-hungry consumers.
Other moves at the top of state banks and at the country’s regulators are likely, and suggest the government is maintaining its tight control over the levers of the financial system ahead of the Party congress, said Oliver Rui, professor of finance at the China Europe International Business School in Shanghai. “We are going to see further consolidation of power from the Party over its control of China’s biggest financial institutions,” Rui said.
As well as filling Chen’s role at Bank of China, the government is expected to appoint a new chairman for the China Insurance Regulatory Commission and an assistant chairman for the China Banking Regulatory Commission, as former officials holding the jobs are being probed for corruption.
Another senior financial role will come vacant if Ma Kai, one of the country’s four vice premiers and responsible for macroeconomic policies, retires as expected after the party congress. Wang Yang, another vice premier who oversees commerce, is likely to take a new role. And Zhou Xiaochuan, the nation’s longest-serving governor of the central bank, may retire.
Senior Chinese financial officials can move seamlessly between posts at the top of the state-owned banks and at the country’s financial regulators. During the last major management reshuffle in the nation’s financial industry, in late 2012 and early 2013, Tian Guoli took the helm of Bank of China from Xiao Gang, who went on to head the China Securities Regulatory Commission until he was removed after the 2015 stock-market crash.
"In the West, we also see bankers move to become regulators, but there’s normally a cooling period, which you don’t see in China,” noted Rui.
Tian, born in 1960, joined Bank of China as chairman in May 2013 from state-controlled Citic Group. Before that, he was head of China Cinda Asset Management Co. and also held various positions at Construction Bank.
Tian used to work under Wang Qishan, who ranks sixth in the Communist Party hierarchy and oversees Xi Jinping’s signature anti-corruption campaign. Tian was the assistant president at Construction Bank in 1997 when Wang was the president of the bank.
Bank of China expanded assets under Tian’s leadership by over 40 percent from the end of 2012 to stand at 18 trillion yuan ($2.7 trillion), making it the world’s fourth-largest lender by assets. Industrial & Commercial Bank of China Ltd., Construction Bank, and Agricultural Bank of China Ltd. held the top three spots. Bank of China also spearheaded the nation’s lending efforts on Xi’s Belt and Road Initiative, with a commitment to provide over $100 billion of financing to 460 projects by the end of March.
Chen, also born in 1960, is a 27-year veteran at Bank of China. He became president, the second-highest ranking position at a Chinese state-owned bank, in early 2014 after holding various positions, including head of risk management.
— With assistance by Jun Luo, and Keith Zhai