Where is the Deputy Governor of Finance going? Central | Local | Provincial Governor

The 14th Lujiazui Forum was held in Shanghai from June 8th to 9th.

Li Yunze, Director of the State Administration for Financial Supervision and Administration, stated at the forum that he will work hard to open up new prospects for financial supervision and resolutely eliminate regulatory gaps and blind spots; Continuously rectify the chaos in the financial market and severely punish serious illegal and irregular behaviors.

This is the first time since the establishment of the State Administration for Financial Regulation that Li Yunze, the first director, has made an appearance and delivered a speech at a public forum. Li Yunze, who has experience working in both financial institutions and local governments, is also the first ministerial level "leader" born in the 1970s.

At the unveiling ceremony of the State Administration of Financial Regulation on May 18th, Wang Jiang, the deputy director in charge of daily work in the Office of the Central Financial Commission, attended.

Public opinion has noticed that both Wang Jiang and Li Yunze have served as deputy governors of local finance. Li Yunze went north to Beijing directly from his position as Vice Governor of Sichuan to take up his new position, becoming the first director of the State Administration of Financial Regulation.

Since the beginning of this year, the new trends of the vice governors of finance have attracted attention. After experiencing the local party and government system, whether continuing to stay in the local area, returning to the financial industry, or returning to the financial system to become regulators, the deputy governors of finance seem to have become a new force of cadres.

"The Vice Governors of Finance" are "returning"

In recent years, it has not been uncommon for local governments to appoint deputy governors of finance.

Around 2018, in addition to the existing regular cadre exchange mechanism, a group of young and strong financial system cadres went to their respective places as a new trend and phenomenon. They are often transferred directly from the First and Second Sessions of the Communist Party of China and state-owned banks to provincial government deputy positions, thus being known as the "Deputy Governor of Finance" by the public opinion.

Since the beginning of this year, many vice governors of finance have returned from their local positions after serving for many years, and their promotion has also accelerated.

Li Yunze is the Deputy Governor of Finance who has returned to the financial regulatory department and has taken his position to the next level.

Public information shows that Li Yunze was born in 1970. He has worked in the banking system for a long time, worked at China Construction Bank for over 20 years, and later served as the Vice President of Industrial and Commercial Bank of China. In September 2018, Li Yunze was appointed as the Deputy Governor of Sichuan Province, becoming one of the highly anticipated Deputy Governors of Finance. In May 2022, Li Yunze was appointed as a member of the Standing Committee of the Sichuan Provincial Party Committee, Deputy Governor of the Provincial Government, and Deputy Secretary of the Party Group.

On the morning of May 18th, Wang Jiang attended the unveiling ceremony of the State Administration for Financial Regulation. This is Wang Jiang's first public appearance as the Deputy Director in charge of daily work at the Central Financial Office.

According to the public resume, Wang Jiang was born in 1963. Looking back, Wang Jiang's first financial stop was the China Construction Bank system, where he worked for 16 years. He has extensive experience and has served as the president of Bank of China and China Construction Bank among the four major banks. In July 2017, Wang Jiang was sent to Jiangsu as the Vice Governor, becoming one of the few Financial Vice Governors in the country at that time. He returned to the banking industry in 2019.

The establishment of the Central Financial Commission and the State Administration for Financial Supervision and Administration are important arrangements for the new round of China's financial regulatory system reform. Previously, there were many speculations in the market about who would become the director of the State Administration for Financial Regulation.

According to analysis, this reform of financial regulatory agencies has further streamlined the regulatory system and strengthened the responsibilities of all parties. The selection of responsible personnel for relevant institutions needs to be considered from multiple perspectives. It can be seen that the financial vice governors who have returned from the local government are given more expectations.

In fact, since the beginning of this year, other vice governors of finance have returned from local governments.

In April of this year, Ge Haijiao, the Vice Governor of Finance who took over as Chairman of Bank of China, served as a member of the Standing Committee of the Hebei Provincial Committee and Executive Vice Governor before taking office. He had previously worked at Agricultural Bank of China and Everbright Group Co., Ltd.

In May, the China Development Bank announced that Tan Jiong would be appointed as the Vice Chairman and President of the bank. Tan Jiong had previously worked in the financial system for a long time. According to public information, in September 2019, Tan Jiong was transferred to the position of Deputy Governor of Guizhou Province and later elected as a member of the Standing Committee of the Guizhou Provincial Party Committee, concurrently serving as the Minister of the United Front Work Department of the Provincial Party Committee. Starting from February 2023, appointed as the Deputy Secretary of the Party Committee of the National Development Bank.

It is generally believed that with the continuous advancement of financial regulatory system reform, a new round of personnel changes in finance has begun, and centrally managed financial institutions will also face a wave of personnel changes. I believe there will be some new developments from the Deputy Governor of Finance within the year.

"Some important positions in some financial institutions are still vacant, and some cadres are facing the problem of 'handing over the baton' at an advanced age." Dong Ximiao, Chief Researcher of Zhaopin, analyzed to a reporter from China Economic Weekly. For example, the chairmen of ICBC and CCB have clearly stated that they will serve in the National People's Congress and the Chinese People's Political Consultative Conference, and the next step will inevitably involve job changes. "It's hard to say when this major personnel adjustment will be completed."

The next stop for the Financial Vice Governors

Behind the phenomenon of "Vice Governor of Finance", there is a practical need to serve the local economic and social development, and it has also become a new path for the training and improvement of financial cadres.

After experiencing the local party and government system, the deputy governors of finance have taken different development paths.

For example, Zhu Hexin, the current Chairman of CITIC Group, has previously served as the Deputy Governor of Sichuan Province. In 2018, he returned to Financial Street and became the Vice Governor of the Central Bank. In March 2020, Zhu Hexin was appointed as the Party Secretary and Chairman of CITIC Group.

Li Bo, the current Vice President of the International Monetary Fund, also served as the Deputy Mayor of Chongqing, during which he was responsible for local financial supervision and financial work. In April 2021, Li Bo returned to the central bank and became the deputy governor of the central bank. In August 2021, Li Bo was appointed as the Vice President of the IMF.

Some vice governors of finance also stayed in the local area and became standing members of provincial party committees.

In January 2018, Yin Yong, then Vice Governor of the People's Bank of China, was appointed as the Deputy Mayor of Beijing, and in December of that year, he became a member of the Standing Committee of the Beijing Municipal Committee. In June 2022, Yin Yong was elected as the Deputy Secretary of the Beijing Municipal Party Committee. In January of this year, he was elected as the Mayor of Beijing.

In 2018, Wu Qing, then Chairman of the Board of Directors of the Shanghai Stock Exchange, became a new member of the Party Group of the Shanghai Municipal Government. Earlier, he worked for many years at the China Securities Regulatory Commission. In September 2019, Wu Qing became a member of the Standing Committee of the Shanghai Municipal Committee; In December 2021, Wu Qing was appointed as the Executive Vice Mayor of Shanghai.

Guo Ningning, who was appointed as the Deputy Governor of Fujian in 2018, was appointed as a member of the Standing Committee of the Fujian Provincial Committee in 2021; Kang Yi, who was appointed as the Deputy Mayor of Tianjin in 2018, was appointed as the Party Secretary and Director of the National Bureau of Statistics in 2022; Liu Guiping, Executive Vice Mayor of Tianjin, was appointed as Vice Mayor of Chongqing in 2016, and previously held positions such as President of China Construction Bank; Cai Yunge, who was transferred to the position of Deputy Mayor of Chongqing in March 2021, was appointed as a member of the Standing Committee of the Chongqing Municipal Committee in 2022.

"The financial industry has strong professionalism, and the quality requirements for industry talents in the financial industry are multifaceted. In addition to their own professional knowledge and abilities, they also need to coordinate various relationships." Xu Hongcai, Deputy Director of the Economic Policy Committee of the China Policy Science Research Association, told a reporter from China Economic Weekly that most cadres who have grown up in large banks and financial regulatory departments have strong professional abilities, and these talents are very suitable for local governments to engage in financial management work. This talent exchange mechanism has important practical significance in promoting economic development and maintaining financial stability.

In the eyes of the outside world, working locally can reflect and enhance the abilities of cadres. Financial executives who work locally not only utilize their own advantages to introduce financial vitality to the local economy and create a good financial ecosystem, but also have a wealth of personal experience and career. This is also one of the reasons why the country vigorously promotes talent exchange between the government and the financial system.

"Finance is the core of modern economy, and local economic development cannot be separated from finance. It is most appropriate to have an expert as the 'parent' in charge of local economic and financial work." Xu Hongcai said that the two-way communication between the government and financial system officials may form a normalized mechanism in the future.

Dong Ximiao also believes that people with financial expertise and work experience should be promoted to serve in local government leadership positions, not only limited to provincial governments, but also including municipal and county-level governments.

More than half of the provinces in China are equipped with "Vice Governors of Finance"

While there have been personnel changes among the deputy governors of finance, there is also a portion who still serve the local area, shouldering various missions such as introducing financial vitality to the local economy, strengthening financial supervision, and preventing and resolving local financial risks.

According to incomplete statistics from China Economic Weekly, as of the end of May, 18 provinces in China have been equipped with financial vice governors from the financial system. This means that more than half of the provinces in China already have vice governors in finance.

From their resumes, they are mostly financial cadres who have grown up from the "One Bank, Two Meetings", the five major banks, and policy banks. In the talent selection and candidate team of the Deputy Governor of Finance, the presence of local financial bureau directors has also begun to appear. In Dong Ximiao's view, the Deputy Governor of Finance has gradually become a standard configuration in various provinces, firstly reflecting the central government's emphasis on financial work, and secondly, it is indeed a practical need for local development.

"Financial work is very professional, and professional things require professional people to do." Dong Ximiao said bluntly, on the one hand, it is necessary to provide financial services for the high-quality development of regional economy. On the other hand, it is to prevent regional financial risks. In recent years, local finance has developed rapidly, but it has also highlighted many problems, such as the risk events of P2P and various local financial institutions. This requires professional people to lead and manage, which is the background of the emergence of the Deputy Governor of Finance. "Not only the Deputy Governor of Finance, but in some places there are also Deputy Mayors and County Magistrates of Finance.".

Xu Hongcai's analysis suggests that with the adjustment of the financial regulatory framework, a new basic framework for financial regulation has been formed. This institutional reform plan highlights the unified leadership of the Party Central Committee over financial work, reflecting the requirement that financial authority is mainly the central authority. Among them, the Central Financial Commission and the Central Financial Work Committee were established at the central level, and the State Council Financial Stability and Development Committee was abolished. This involves two levels of relationship, one is the relationship between the Party and the government, and the other is the relationship between the central and local governments.

One is to highlight the strengthening of the Party's centralized and unified leadership over financial work, which can enhance the coordination of financial integration and uphold the political and people-oriented nature of financial work. The previous pattern of "one bank, two meetings" has changed to "one bank, one bureau, one meeting", with each department performing its own duties, which is more conducive to resolving corruption risks and unreasonable factors in the financial industry, and promoting its healthier development.

The second is to clarify the central local relationship in the field of financial regulation. Establishing a local financial regulatory system mainly composed of local dispatched agencies of the central financial management department, involving the coordination of the relationship between the former and the original financial regulatory agencies of the local government. For example, local financial regulation poses risks to "7+4" institutions. For example, local financial holding groups, which belong to local state-owned assets, participate in and control many financial institutions, including banks, securities, and insurance. Local governments have important responsibilities for regulating their behavior and ultimately obey the leadership of the central government.

He bluntly stated that talent exchange between financial institutions and local party and government systems is conducive to improving the comprehensive abilities of relevant personnel and cadres responsible for local financial supervision. "Some cadres dispatched by the local government office may not be familiar with the business, and it is not possible for outsiders to lead insiders."

In Dong Ximiao's view, the local government's emphasis on finance is more reflected in financial talents.

"Everyone has seen the group of deputy governors of finance, but this group alone is not enough." Dong Ximiao believes that government leadership positions should introduce more officials with financial professional backgrounds. "And local regulatory agencies, especially some small and medium-sized financial institutions, should not let old-fashioned administrative officials go, but let those who truly understand finance go."

In Dong Ximiao's view, when local party committees and governments nominate candidates for senior executives in small and medium-sized banks, they should prioritize their work experience and professional qualities, and not allow administrative officials lacking financial industry experience to serve in small and medium-sized banks. The regulatory authorities should apply the qualification approval system and strictly monitor the selection of senior executives, especially the "top leaders" of small and medium-sized banks.

"Nowadays, some local party committees and governments have the habit of sending administrative officials without financial industry experience or people without financial industry experience as bank chairmen, which can easily lead to problems. For example, Cai Guohua, the former chairman of Hengfeng Bank who has been demoted, once served as the deputy mayor of Yantai City.". Shen Renkang, former chairman of Zhejiang Commercial Bank who was investigated, previously served as the mayor of Quzhou City. "People without financial industry experience, purely administrative officials, without financial industry experience, are prone to problems."