Rising star to run new natural resources ministry

Rising star to run new natural resources ministry

Mon, 19/03/2018 - 14:08
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Lu Hao

陆昊在2013年成为中国最年轻的省长,于黑龙江省任职。照片来源:路透社

China has chosen Lu Hao, a young politician who's risen swiftly through the Communist Party ranks over the past 15 years, to run a new Ministry of Natural Resources, as the government undergoes its biggest overhaul in years.

Current ministers for agriculture and environmental protection were also voted in to run their expanded ministries amid a broad government reshuffle at this year's annual National People's Congress.

The selections were read out at the Great Hall of the People in Beijing, following last week's announcement of sweeping government reforms with the creation and expansion of several new ministries aimed at making policymaking more efficient.

At 50, Lu is young for a politician by China's standards and has risen through the ranks quickly, becoming the youngest provincial governor in the country when he was made governor of Heilongjiang in the industrial and cornbelt northeast, in 2013.

Under his tenure, Lu has overseen economic and social upheaval in the region, which was hit hard by the steel and coal industry downturn in 2016 and saw widespread protests by workers over unpaid wages and pay cuts.

He was marked out as a rising star when he was appointed head of the Communist Youth League in 2008.

While Chinese President Xi Jinping has moved to sideline the faction, once seen as a breeding ground for future leaders, he still needs broad party support and can't completely ignore those associated with the League.

Another Youth League alumnae, Hu Chunhua, was also appointed a vice premier on Monday.

A graduate in economics from the prestigious Peking University, Lu was Beijing's youngest vice mayor when he was named to the position in 2003 at the age of 35.

The Ministry of Natural Resources will replace the Ministry of Land & Resources, State Oceanic Administration (SOA) and the national surveying and mapping bureau.

Li Ganjie, head of the Ministry for Environmental Protection (MEP), was elected to take over the reins of the new Ministry of Ecological Environment, which will absorb the MEP and take on duties overseeing river, marine and soil pollution as well as climate change held by other ministries and departments.

Han Changfu has been agriculture minister since 2009 and will head the new Ministry of Agriculture and Rural Affairs, which will oversee policy on agriculture, rural areas and its people.

Earlier today, China elevated a key confidante of President Xi Jinping to one of the top positions in government as Beijing cracks down on riskier financing and a debt to reduce systemic risks to the world's second-largest economy.

The election of Liu He by parliament to be a vice premier also comes as the United States presses China to cut its trade surplus by $100 billion. Harvard-educated Liu, 66, was the most prominent envoy to visit Washington recently in a bid to prevent the outbreak of a trade war.

While most of the personnel changes on the economic team were widely anticipated, the choice of Yi Gang to take over as the new head of the People's Bank of China (PBOC) was unexpected.

Yi is a vice governor of PBOC and a protege of outgoing chief Zhou Xiaochuan. His appointment is seen as pointing to continuity in monetary policy even as one of the world's biggest central banks is gaining considerable new regulatory power.

The head of a newly merged banking and insurance regulator is expected to be announced on Monday. Reform-minded Guo Shuqing, 61, the current chair of the China Banking Regulatory Commission, is viewed as the top candidate to play that role.

The chief of a powerful new competition and food safety regulator will also be unveiled.

As Xi begins his second five-year term as president, Beijing is streamlining regulators and ministries to cut inefficiencies while expanding the remit of others such as the central bank to boost their policymaking powers.

"China's ministries are giant, nationwide siloes and fiefdoms that never talk to one another. Hence, in order to accomplish anything major, the command must come from the top down; only they can get ministries to work together," Cliff Tan, east Asian head of global markets research at Bank of Tokyo-Mitsubishi UFJ, said in a note.

"Such a setup nearly guarantees the continuation of power that is never devolved, otherwise nothing would get done."

Liu has a deep understanding of the country's economic issues, and was elected last October into the 25-member Politburo, the second-highest tier in Beijing's political power structure after the seven-member Politburo Standing Committee,

Liu won a top Chinese economics study award in 2015 for his research on the global financial crisis, and is widely seen as masterminding Xi's supply-side reforms which are cutting excess factory capacity and pivoting the economy away from low-value industries.

Liu, who speaks fluent English, gained a master's degree in public administration at Harvard's Kennedy School of Government in 1995.

He had been the head of the General Office of the ruling Communist Party's Central Leading Group for Financial and Economic Affairs and a vice minister of the National Development and Reform Commission (NDRC) - China's top economic planner.

Zhou's protege

U.S.-educated Yi Gang, 60, has been vice PBOC governor since 2008. He is seen as instrumental in steering monetary and currency policy, including the landmark devaluation of the yuan in 2015 and more recently a tightening in capital controls.

The PBOC and other regulators are trying to rein in risks from an increasingly complex financial system and a rapid build-up in debt without jolting markets or hurting economic growth.

"The main task right now is to implement prudent monetary policy, push forward financial sector reform and opening up, and keep the financial sector stable," Yi told reporters on the sidelines of Monday's parliament session at the Great Hall of the People.

But Yi is not regarded as a heavyweight like his boss Zhou, and he may play a supportive role with Liu overseeing the economy and finance sector on the whole, some economists say.

"Frankly speaking, (Yi's nomination is) a bit unexpected as he holds a relatively low political ranking as the alternative member of CPC Central Committee," said Tommy Xie, China economist at OCBC Bank in Singapore.

The Central Committee is the largest of the party's elite decision-making bodies, and is made up of 204 full members and about 170 alternate members.

"In terms of implication, we see policy continuation as Yi will support Liu He to drive economic reform. Both are the main driver to China's reform in the past few years," Xie said.

Yi, one of the highest-ranking "sea turtles" - a colloquialism for Chinese returning from overseas - has a PhD in economics from the University of Illinois. He was also the head of the State Administration of Foreign Exchange (SAFE) from 2009 to 2016.

With Yi's background and his reputation of being pro-reform, his nomination would be good news for foreign investors, Xie also said.

Zhou, 70, who is China's longest-running central bank head, having taken the job in 2002, is expected to announce his retirement soon.

Separately, Liu Kun, head of the budget office of parliament, was elected to be the new finance minister, replacing Xiao Jie. Liu was formerly a vice finance minister.

Zhong Shan was re-elected as the commerce minister. He Lifeng was also re-elected as the head of NDRC. (Reporting by Shu Zhang and Christian Shepherd Additional reporting by Kevin Yao and Lusha Zhang Writing by Ryan Woo; Editing by Sam Holmes and Kim Coghill)

(Reporting by Shu Zhang and Christian Shepherd; additional reporting by Meng Meng and Ben Blanchard; writing by Josephine Mason; Editing by Amrutha Gayathri and Richard Pullin)