On July 25, 2023, China announced the replacement of its central bank chief as the country grapples with reviving its sluggish economic growth. Economist Pan Gongsheng will succeed
outgoing central bank governor Yi Gang, according to the official Xinhua News Agency.
Yi Gang had been leading the People's Bank of China (PBOC) since 2018 but has reached retirement age. The decision to appoint Pan Gongsheng was made during a meeting of Chinese legislators on Tuesday. Pan had been appointed as the PBOC's Communist Party secretary on July 1 and previously served as the head of China's foreign exchange regulator since 2016, a challenging period when the country faced significant capital flight.
The 60-year-old Pan has an extensive background in Chinese banking and politics, having also held the position of one of the central bank's vice-governors since 2012. He is known for his experience and problem-solving skills, having worked at two major state-owned banks.
Analysts from the Beijing-based consultancy Trivium noted that Pan successfully navigated his various roles and built a reputation as a politically savvy problem solver.
Neil Thomas, a China specialist at the Asia Society, commented that Pan Gongsheng is a financial technocrat and not a staunch Xi loyalist. This indicates that President Xi Jinping is prioritizing China's economic concerns more than before the 20th Party Congress, during which Beijing's top leadership secured a third term in power for Xi.
As the Chinese economy faces challenges, the central bank has recently implemented several interest rate cuts to stimulate economic activity. However, despite these measures, the country reported disappointing economic growth in the second quarter, with a 6.3 percent expansion compared to the 7.1 percent predicted by analysts. The growth figure was considerably lower than expected, even considering the low base of comparison with the previous year when China endured Covid-related lockdowns in major cities.
Youth unemployment has also surged to a record 21.3 percent in June, adding to the country's economic woes.
The Chinese Politburo acknowledged on Monday that the economy was confronting "new difficulties and challenges." This change in leadership at the central bank reflects the country's commitment to addressing the economic struggles it is currently facing. Photo by Carpkazu, Wikimedia commons.
