China Appoints New Central Bank Leader Amid Economic Woes

Experts say it’s Xi Jinping’s act of emergency

Pan Gongsheng, deputy governor of People's Bank of China and director of the State Administration of Foreign Exchange, answers a question at a press conference during the First Session of the 13th National People's Congress in Beijing on March 9, 2018. Wang Zhao/AFP via Getty Images

Chinese leaders appointed a new Communist Party chief at the People’s Bank of China (PBOC) on July 1, a surprise move that some experts say is a desperate attempt to revive China’s flagging economy.

Pan Gongsheng, 59, deputy governor of the PBOC, would eventually replace Yi Gang, the central’s bank current governor, who has held the post for five years.

China faces foreign capital outflows as the yuan continues to fall against the dollar. Experts told The Epoch Times the new appointment won’t resolve the economic crisis.

A Surprise Move

China observers say Mr. Pan was probably the last person to be considered for Chinese leader Xi Jinping’s economic leadership team.

Mr. Pan, an alternative member of the 19th Central Committee of the Chinese Communist Party (CCP), was removed from the list during the 20th National Congress in October 2022.

Earlier this year, it was widely reported that Mr. Xi had his two close associates—Zhu Hexin, chairman of the Chinese financial conglomerate Citic Group, and He Lifeng, a long-time ally and vice premier—as leading candidates for top positions at the central bank.

However, Mr. Pan’s educational background, foreign training, and experience made him suitable for the political post. He holds a doctorate in economics from the Renmin University of China. He did his postdoctoral research at Cambridge University and worked as a senior research fellow at Harvard University.

China affairs commentator Wang He told The Epoch Times that the unexpected appointment suggested the Chinese economy is in a worse crisis than the international community had thought.

Mr. Xi’s political appointments during the CCP’s national meeting last year reflected his over-confidence about the economy, Mr. Wang said.

“The leadership made a serious mistake then, and it’s making major adjustments now,” he said, suggesting a lack of competence among Mr. Xi’s current associates.

Economist Li Hengqing told The Epoch Times that the Chinese leadership’s decision to appoint Mr. Pan was a surprise move because Beijing can’t trust those who have had training from foreign institutes even though they have the right skills to do the job.

Paramilitary policemen patrol in front of the People's Bank of China, the central bank of China, in Beijing on Jul. 8, 2015. Greg Baker/AFP via Getty Images

After the 20th National Congress, the top leadership was rearranged and included cadres who received an education in China. For example, He Lifeng, who was appointed as vice premier, holds a doctorate in economics from Xiamen University; Li Yunze, who was recently appointed as head of the newly established National Financial Regulatory Administration, holds a doctorate in economics from the Graduate School of Chinese Academy of Social Sciences and Peking University.

A Difficult Mission

The Chinese media reported that with the new appointment, Mr. Pan is expected to deal with “the ever-complex international situation” and “conquer domestic economic growth challenges.”

The media touted Mr. Pan’s expertise and achievement in the finance sector and national exchange rate reform.

However, Mr. Wang is not optimistic that the new appointment will resolve the economic crisis. China’s recession is a result of a combination of long-term abnormal economic development and growing antagonism toward the communist regime, he said.

He believes Mr. Pan’s technocratic background, without particular ties to a political faction, is why Mr. Xi would approve of him.

Mr. Pan could serve as a consultant, but it remains to be seen if the leadership would take his advice, Mr. Wang said.

Mr. Li doesn’t believe that a new central bank leader can boost the sagging economy.

“The regime can’t stop the outflow of foreign capital,” he said.

Mr. Li doesn’t believe the CCP cares about the currency exchange rate. “It [CCP] would only focus on keeping capital inside China,” he stated.

Haizhong Ning and Luo Ya contributed to this report.