Ruling party approves list of nominees to fill top government positions

Rising star: Liu He, Xi’s top economic policy adviser

Chinese leaders have approved nominees for top government jobs, state media said, as the ruling Communist Party also promised changes to the country’s regulatory structure.

The party’s Central Committee agreed on the list during a three-day conclave that ended yesterday in Beijing, the official Xinhua News Agency reported. State media didn’t release names or their intended posts, which could potentially include the top central bank job.

A broad communique released after the meeting pledged further changes to the economy and to “adamantly remove any restrictions that keep the market from playing a decisive role.” The document pledged “institutional reform” of the party, government, military and other public bodies and promised to balance power between the central and local governments.

The closed-door gathering comes before the annual National People’s Congress starting Monday, at which President Xi Jinping and other top cabinet figures will be formally appointed to new terms. It was the Central Committee’s third such meeting since Xi secured a second term in October, the most in a similar period since the process was standardized four decades ago.

In addition to selecting a successor to People’s Bank of China Governor Zhou Xiaochuan, the government is considering a merger of the China Banking Regulatory Commission and the China Insurance Regulatory Commission, Bloomberg News has reported. The moves could be pivotal in attempts to defuse the nation’s ticking time bomb of debt – which stands at around 260 percent of output and growing – without derailing the economic expansion.

Politburo members mentioned by analysts in connection with the PBOC governor role include Xi’s top economic policy adviser, Liu He, the head of the banking regulator, Guo Shuqing, and Hubei provincial party chief Jiang Chaoliang. Also unresolved is Xi’s pick to lead the Financial Stability and Development Committee, which was established last year to help curb risk.

Liu is visiting the U.S. this week with an expanded role managing the rising trade tensions between the governments in Beijing and Washington.

More curbs on money-market funds

China plans to expand its unprecedented crackdown on financial risk to money-market funds by capping how much investors can redeem in a day, people familiar with the matter said.

The limit for same-day redemption will be set at 10,000 yuan (USD1,580), said the people, who asked not to be identified as they’re not authorized to speak publicly. The same restriction will apply when investors use their assets in money-market funds directly for payment and consumption, the people said.

Such a move would be the latest tightening by China’s policy makers, who are making stability job No. 1 as they work to balance continued expansion with defusing the country’s debt bomb. Those efforts culminated in the unprecedented government takeover of Anbang Insurance Group Co. earlier this month, just before President Xi Jinping gathered top cadres for a plenum to select government leaders and the national legislative meeting next week.

The move by regulators brings them into areas once seen as less risky. The country’s money- market funds expanded to a total value of almost $1.1 trillion by the end of 2017, up from $680 billion the previous year, according to the Asset Management Association of China.

“The financial regulatory crackdown is far from over,” Rob Subbaraman, an economist at Nomura in Singapore, said in a note Wednesday. “The unrelenting crackdown on shadow financing, market speculation and corruption has steadily raised the cost of funding and tightened overall financial conditions.”

The People’s Bank of China and the China Securities Regulatory Commission didn’t respond to faxes seeking comment on the matter Wednesday.

Some Chinese money-market funds allow investors to use the money they hold in the fund directly for purchasing online and in traditional retail stores, such as the Ant Financial-controlled Tianhong Yu’E Bao Money Market Fund, China’s largest such entity.

The central bank last year urged Ant, a financial affiliate of Alibaba Group Holding Ltd., to reduce the maximum amount individuals can invest in Yu’E Bao to limit financial market risk, people with knowledge of the matter said in May.

The PBOC revised the statistics methodology for calculating the M2 broad money supply last month to better gauge the scale of money market funds. MDT/Bloomberg