By Benjamin Kang Lim
BEIJING, Oct 28 (Reuters) - China’s top banking and insurance regulators have reached retirement age, and a shakeup is expected as early as this week, three independent sources said, a step that would be the first major move in a sweeping reshuffle of the Communist Party leadership that will culminate next year.
Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), and Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), have both reached the compulsory retirement age of 65 for officials who hold a rank equivalent to a cabinet minister.
Securities regulator Shang Fulin, 54, who has a reputation for caution, is the front-runner to replace Liu as CBRC chairman, said the sources, who requested anonymity because they are not authorised to speak to reporters.
Earlier, other sources said Jiang Jianqing, 58, chairman of the Industrial and Commercial Bank of China, the world’s biggest lender, was a candidate for the CBRC post. He’s still viewed as a contender.
Barring a last-minute change, China Construction Bank (CCB) chairman Guo Shuqing, 55, is tipped to take Shang’s place as the chairman of the China Securities Regulatory Commission (CSRC), said the sources, one of whom has ties to the top leadership.
It was not clear who will take over the CCB post from Oxford-educated Guo, who earlier was also considered a possible central bank chief. CCB is the world’s second-most valuable bank.
Xiang Junbo, 54, a war hero-turned-banker, is expected to become the new CIRC chairman, the sources said. Xiang is currently chairman of the Agricultural Bank of China, the country’s third-largest lender by assets.
The changes will mark the highest-profile personnel swaps to be made as a part of a broad leadership turnover that will run through the next 17 months and see China’s President Hu Jintao and Premier Wen Jiabao hand over power to a younger generation of leaders.
Hu and Wen are due to retire their Communist Party posts at the 18th Congress next fall, and their presidency and premiership positions at a parliament session in March 2013.
Age limits will force out older leaders from throughout the Communist Party, local governments, military, and cabinet ministries, making way for younger leaders to move up.
The final decision will be confirmed by the Communist Party’s Organisation Department, which is in charge of key personnel moves for government and Party bodies, state-owned businesses, and the military.
Spokespeople for the banking, securities and insurance regulatory bodies declined to comment when reached by telephone.
China has pursued a busy financial regulatory reform agenda over the years, easing controls over key sectors and prices, and launching a fledgling offshore market for the yuan in Hong Kong.
There are plenty of challenges for the new regulators to tackle.
The CBRC must ensure banking system stability while potential exposure to China’s local government debt -- estimated at 10.7 trillion yuan ($1.7 trillion) -- is worked out.
Meanwhile, the central government wants to neutralise the risks of a shadow banking system of business-to-business and high interest-rate individual lending.
And the CSRC must manage the fallout from an accounting scandal involving Chinese companies listed on U.S. stock exchanges.
A raft of reforms across the financial sector remain in the pipeline, but analysts say progress will begin to slow next year as China prepares for the leadership reshuffle in late 2012.
(Additional reporting by Beijing Newsroom and Nick Edwards Editing by Don Durfee and Brian Rhoads)
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