Yuan Bears May Triumph Over New PBOC Boss
Consistency is generally a good thing. In the arena of monetary and currency policy, it can have shortcomings.
Mr. Continuity.
Photographer: Qilai Shen/BloombergA huge economy sags, policy appears too timid and a new central bank boss walks into the room. That means a big shift is coming, right? Not in China, judging by the reception a senior personnel selection has received.
Pan Gongsheng was appointed Communist Party chief at the People’s Bank of China on the weekend, setting him up to be the institution’s next governor. He’s also Mr. Continuity. Pan is a PBOC insider and well known in the global salons of monetary policy. Recent remarks suggest he’s unlikely to rock the boat. In a speech in Shanghai last month, Pan expressed skepticism about large-scale stimulus and sounded disdainful of what he called the Federal Reserve’s “big loosening-big-tightening” inclinations. Zero interest rates and quantitative easing got short shrift.
If Pan does become sympathetic to a bolder approach, this must be signed off by the Chinese leadership; the agency isn’t independent in the manner of the Fed or the European Central Bank.