Taiwan Seen Shunning Change in Search for New Central Banker

Updated on
  • Economists see Deputy Governor Yang as most likely successor
  • Incumbent says he won’t seek new term after 20 years in job

As Taiwan searches for a new central bank governor for the first time in two decades, economists see the government choosing more of the same.

Deputy central bank governor Yang Chin-long is the leading contender to become Taiwan’s first new chief policy maker since 1998 after Perng Fai-nan’s term ends in February, according to a survey of economists. Yang topped the poll ahead of another widely tipped candidate, current Premier Lin Chuan.

Yang is the continuity candidate, having worked at the central bank throughout Perng’s term, during which time Taiwan’s economy has doubled in size. Government officials have so far remained tight-lipped about which candidates they’re considering. The final decision rests with President Tsai Ing-wen.

With the top five names in the survey all men over 60, the result represents the view among economists that the government will prioritize stability over change at the central bank.

“The age of the top five contenders is something to pay attention to but a seamless transition is the top concern,” said Kevin Wang, an economist at Taishin Investment Advisory in Taipei and a participant in the survey.

Taiwan’s central bank isn’t the only one facing a possible change of leadership next year. Federal Reserve Chair Janet Yellen’s current term ends in February. The Bank of Korea’s Lee Ju-yeol will step down in March and the Bank of Japan’s Haruhiko Kuroda concludes his term in April. Also, People’s Bank of China Governor Zhou Xiaochuan is nearing retirement age.

Yang Chin-long: Continuity Candidate

Apart from a few years as a researcher at the Taiwan Academy of Banking and Finance in the 1980s, Yang Chin-long has spent most of his career at the central bank. Having started out in the Department of Economic Research, he worked his way up through the organization over the intervening 28 years to become deputy governor. On his way, he worked in two key divisions, foreign exchange and banking, making him an obvious choice.

Having been deputy governor since 2008, the 64-year-old Yang can be expected to continue a “stability-first” philosophy and present no surprises. While in some ways an advantage, his long years of service at the central bank also mean he lacks the experience in the private sector that other leading contenders offer.

Lin Chuan: President Tsai’s Trusted Lieutenant

President Tsai named Lin Chuan premier to lead her cabinet, despite the fact he is a political independent, underlining the level of trust she has in him. But Lin’s term has been marked by protests over government infrastructure plans and labor and pension reforms. There’s been continued speculation in Taiwanese media he could step down and take over as head of the central bank.

With a doctorate in economics from the University of Illinois at Urbana-Champaign, the 65-year-old has previously served as Taiwan’s finance minister and chief statistician. His strong ties to the president would likely mean a good working relationship between the government and a central bank led by Lin. But what he doesn’t have is experience at the central bank managing monetary policy.

Chen Shih-meng: Economist, Polemicist

A veteran figure in Taiwan independence circles, Chen Shih-meng has been active in both politics and academia. Deputy governor of the central bank from 2000 to 2002 and chief of staff to former President Chen Shui-bian, he authored of an economics textbook still widely used in Taiwanese universities. His knowledge of monetary policy isn’t in question.

The 69-year-old Chen has been more involved in politics recently, establishing a group advocating for Taiwan’s formal independence from China. In March, Tsai nominated him to become a member of the government-oversight body. His appointment still awaits legislative approval.

Wu Rong-i: An Old Hand

Wu Rong-i is a heavyweight of the ruling Democratic Progressive Party, having served as vice premier. After earning a Ph.D in economics from the University of Leaven in Belgium, Wu gained experience in both government and finance throughout his career. His resume includes stints as chairman of both the Taiwan Stock Exchange and the Taiwan Futures Exchange. He’s now an adviser to the president and the chairman of Taiwania Investment Management, a government-led investment vehicle.

Though qualified, his age could count against him. At 77, he’s one year younger than Perng.

Shea Jia-dong: Change Agent

Shea Jia-dong was deputy central bank governor between 1996 and 2000, playing a key role alongside Perng in guiding Taiwan through the Asian Financial Crisis. The 68-year-old has been among the loudest critics of the central bank’s monetary policy, forcing it to publicly respond on several occasions. Central bank currency interventions and its contributions to the national coffers are policies Shea has publicly criticized. He would need little time settling into the new role, but could unsettle investors used to the stability-first approach of his predecessor.

Others

NameTitleScore
Yen Tzung-taDeputy central bank governor6
Chen Po-chihSenior adviser to the President4
Perng Fai-nanCentral bank governor3
Harry YenDirector-general of central bank’s foreign exchange department3
Sean ChenFormer Premier3
Hu Sheng-chengChairman of Chung-Hua Institution for Economic Research3
Wu Tang-chiehChairman of Hua Nan Financial Holdings3
Cheng Cheng-mountVice chairman of Financial Supervisory Commission1
Liang Ming-yihCentral bank board member1

Methodology: Respondents were asked to rank the three most likely candidates for the central bank governor’s position when Perng’s term expires in February, 2018, with three points for a top ranking, two for second and one for third. Each individual result was then divided by the maximum vote possible and multiplied by 100 to come up with a final score. Twenty-three economists took part in the Aug. 8-15 survey. The Bloomberg poll did not provide a list of candidates to choose from. Participants were free to submit the names of any candidates.

— With assistance by Jeff Kearns, Argin Chang, and Hannah Dormido

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