Exclusive: Head of China's CIC tipped as next finance minister
BEIJING (Reuters) - The head of China's $410 billion sovereign wealth fund is the front-runner to become the country's next finance minister, two independent sources said, a move in the country's broad leadership reshuffle that will culminate in 2013.
Lou Jiwei, 61, currently chairman of China Investment Corp (CIC), is tipped to replace Xie Xuren as finance minister, the sources said. They requested anonymity to avoid political repercussions.
"Lou will step down (as CIC chairman). He will go to the Finance Ministry," one source with ties to China's top leadership said. This was confirmed by a second source close to the ministry.
The change would come as part of the Communist Party's leadership transition, under which President Hu Jintao and Premier Wen Jiabao will hand over power to a younger generation.
CIC declined to comment when reached by telephone, and the ministry was not immediately available for comment.
In October, China appointed new bosses for its top banking, securities and insurance regulators.
If elevated, Lou will lead a Finance Ministry that has been at the forefront of China's efforts to tackle 10.7 trillion yuan ($1.7 trillion) of debt that local governments piled up as a result of China's stimulus program during the global financial crisis.
The appointment of Lou as the next finance minister could bolster Beijing's efforts to diversify its $3.2 trillion foreign exchange reserves, said Li Jie, the director at the Reserves Research Institute at the Central University of Finance and Economics in Beijing.
"Lou's past years in CIC must tell him how difficult it is to manage a stockpile of foreign exchange assets," said Li.
When Lou will become finance minister was unknown. But it could be as early as October, when Xie reaches the mandatory retirement age of 65 for cabinet ministers, or in March 2013 when the State Council, China's cabinet, undergoes a shake-up.
Historically, China's finance minister hasn't been the top-ranked official in charge of finance -- that job is reserved for the Politburo Standing Committee member in charge of finance, currently Vice Premier Wang Qishan.
But the post is becoming more important as China confronts challenges ranging from staggering local government debt levels to pressure to cut taxes on businesses and individuals.
Last year, Lou wrote an article for the reform-minded journal Comparative Studies, laying out his views of the pressing financial and economic changes needed in China.
They included reform of personal income taxes, the fiscal relationship between the central and local governments, and capital account convertibility for the tightly controlled yuan currency.
CIC President Gao Xiqing, 58, a Duke University-trained lawyer, is likely to succeed Lou as chairman, barring any last-minute change, said a senior financial industry source who also asked not to be identified.
Lou initially had been tipped to head a new ministerial-level body that would manage the country's state-owned banks and non-bank financial enterprises, including brokerages, insurers, trust firms and funds.
Century Weekly, a magazine published by Caixin media, said last December that the proposal to create a financial State-owned Assets Supervision and Administration Commission, or SASAC, had been shelved.
A computer programmer turned economist, Lou was a vice finance minister before being promoted to manage the sovereign wealth fund.
He has not worked in the central bank but, according to official biographies, the avid golfer has co-authored several books and papers on economic reform with central bank governor Zhou Xiaochuan.
Born on Dec 24, 1950, Lou's schooling was cut short by the 1966-76 Cultural Revolution when he was a teenager. After five years in the army, when he taught himself mathematics, he went to work in 1973 as a computer programmer at a big Beijing steelworks.
He won a place at the prestigious Tsinghua University, where he majored in computing, and then took a master's degree in economics from the Chinese Academy of Social Sciences, a top government think-tank.
(Additional reporting by Zhou Xin and Beijing newsroom; Editing by Brian Rhoads and Neil Fullick)
- Tweet this
- Share this
- Digg this