2024-08-24
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
Interface News reporter | Yang Zhijin
Jiemian News Editors | Zhou Pengfeng and Jiang Yiman
On July 31, the 11th meeting of the 14th Hunan Provincial People's Congress Standing Committee was held at No. 190 Shaoshan Middle Road, Changsha. The meeting decided to appoint Wang Junshou as the vice governor of Hunan Province. When Wang Junshou went to the rostrum to receive the appointment letter, the venue burst into warm applause.
Prior to this, Wang Junshou worked in the financial system for 30 years, successively serving in local city commercial banks, the former China Banking Regulatory Commission, the former China Banking and Insurance Regulatory Commission and the State Financial Regulatory Administration. After taking up a post at a local level, officials like Wang Junshou who have extensive experience in the financial industry are called "deputy governors of finance" (deputy mayors in municipalities and vice chairmen in autonomous regions, collectively referred to as deputy governors below).
According to statistics from Jiemian News, since the Fifth National Financial Work Conference in 2017, the number of deputy provincial governors for finance has increased intensively, gradually becoming an institutionalized arrangement. So far, 17 provinces, autonomous regions, and municipalities (hereinafter referred to as provinces) have been equipped with deputy provincial governors for finance, accounting for 55%. Deputy provincial governors for finance have become one of the most watched groups, and the market is paying close attention to their new initiatives during their tenure.
Ten days after taking office, Wang Junshou launched his first investigation at the Hunan Provincial Party Committee Financial Office and the Hunan Branch of the People's Bank of China. During the investigation on August 12, Wang Junshou said that we should stand at the height of being politically conscious and taking the overall situation into consideration, comprehensively build a chain debt repayment mechanism, provide reasonable and sufficient liquidity for the real economy, prevent and resolve financial risks, and effectively activate financial assets.
The Hunan Provincial Party Committee Financial Office is a newly established department in this round of institutional reform. But this is not an isolated case. Since the beginning of this year, 31 provinces have successively established provincial Party Committee Financial Offices. As the office of the provincial Party Committee Financial Committee, its main tasks are to focus on supervision, risk management and strengthening party building work in financial institutions. According to public information, the director of the provincial Party Committee Financial Office is generally concurrently held by the deputy governor in charge of finance.
The current reform of the financial sector is accelerating, and the reform of the central-local financial regulatory system is an important part. The position of the deputy provincial governor of finance is particularly critical in this reform. In the future, how to coordinate and do a good job in risk prevention, strengthening supervision, promoting development, and strengthening party building will be an important topic for them during their tenure.
Wang Junshou was born in March 1971 and is now 53 years old. Similar to Wang Junshou, the other 16 vice governors of finance were also born around 1970. Most of these vice governors of finance had the same growth experience and started working in the mid-1990s. At that time, China was in urgent need of professionals in economics and finance.
The Fifth National Financial Work Conference was held on July 14-15, 2017. The conference proposed that the Party's ability to lead financial work should be enhanced, and that leading cadres at all levels, especially senior cadres, should strengthen their study of financial knowledge and strive to build a large team of high-quality financial talents with both integrity and ability.
Six days after the meeting ended,Bank of CommunicationsFormer Vice President Wang Jiang was appointed as Vice Governor of Jiangsu Province, marking the beginning of a large number of financial system officials becoming vice governors. After working in Jiangsu for two and a half years, Wang Jiang successively served as President of Bank of China, President of China Construction Bank, and Chairman of Everbright Group. In May 2023, Wang Jiang served as Executive Deputy Director of the Office of the Central Financial Committee and Executive Deputy Secretary of the Central Financial Work Committee.
According to a review by Jiemian News, 15 provinces had deputy governors for finance in August 2019. Although there have been constant changes since then, the proportion of provinces with deputy governors for finance has been steadily increasing, and deputy governors for finance have gradually become an institutionalized arrangement. As of August 2024, 17 provinces have deputy governors for finance, accounting for 55%.
The frequent appearance of deputy provincial governors in finance is a requirement for China's financial deepening. According to the data from the National Bureau of Statistics, the added value of China's financial industry has increased from 7.65 billion yuan in 1978 to 10 trillion yuan in 2023, and the proportion of GDP has increased from 2.1% to 7.9%. If measured in absolute terms, the added value of China's financial industry in 2023 will be equivalent to the annual GDP of Indonesia, and it can be among the top 16 in the world in terms of GDP. At the same time, financial risks have begun to emerge in recent years, and professionals are urgently needed to deal with them.
Judging from their work experience, these 17 deputy provincial governors have worked in the financial system for more than ten or even thirty years and have extensive experience in financial work. Among them, eight, or nearly half, served as deputy governors of large state-owned banks before becoming deputy provincial governors. This means that deputy governors of large state-owned banks are the largest source of candidates for deputy provincial governors in the financial sector.
Secondly, there are 4 people from central financial regulatory departments, including 2 from the central bank system (including the State Administration of Foreign Exchange), 1 from the Financial Regulatory Administration (including the China Banking Regulatory Commission and the China Banking and Insurance Regulatory Commission), and 1 from the China Securities Regulatory Commission.
In April 2022, Liu Guiping, deputy governor of the central bank, was transferred to Tianjin as deputy mayor, and once again served as deputy governor of finance. Liu Guiping worked at the Agricultural Bank of China for more than 20 years, gradually rising from a grassroots employee to the president of a provincial branch. In 2014, he was transferred to China Investment Corporation as deputy general manager. Two years later, he was transferred to Chongqing, the only municipality in the western region, as deputy mayor. In March 2019, Liu Guiping returned to the financial system again and served as president of China Construction Bank.
"I have 27 years of experience working in finance, 25 of which were in large state-owned commercial banks, and the last three years in the government, also in charge of finance. Although I have just joined CCB, I can be considered a veteran in the financial industry. My 27 years of work experience have taught me that I should persist in serving the national strategy and the real economy," Liu Guiping said at CCB's performance briefing in March 2019 when talking about his role transition from a local official to a senior executive of a large bank.
Thirdly, there are three people from local financial regulatory departments. In November 2022, Zhang Yanyun, director of the Zhejiang Provincial Local Financial Management Bureau, was transferred to the position of vice governor of Zhejiang Province, setting a precedent for the head of a local financial regulatory department to be promoted to deputy governor of finance. In 2023, Jie Dong, director of the Shanghai Local Financial Regulatory Bureau, and Wei Xiuchang, director of the Jiangxi Provincial Local Financial Supervision and Administration Bureau, were also promoted to deputy governors of finance, serving as deputy mayor of Shanghai and vice chairman of the Tibet Autonomous Region respectively.
This important change shows that the importance of local financial supervision and administration bureaus is increasing. With the development of economy and finance, local governments established financial offices in the early 21st century, but the nature of the institutions was unclear and their main functions were mainly service-oriented. In 2008, the provincial government financial offices were approved by the Central Organization Department and became formally established; in 2018, the provincial government financial offices added the name of local financial supervision and administration bureaus to strengthen supervision of quasi-financial institutions.
In addition, there are two people from local financial regulatory departments, such as Huang Zhiqiang, deputy general manager of CITIC Group, who was appointed as vice chairman of the Inner Mongolia Autonomous Region.Minmetals CapitalChairman Ren Zhufeng was transferred to the position of vice governor of Jiangxi Province. CITIC Group is one of the first companies approved for a financial holding company license, with CITIC Financial Holdings Co., Ltd. as the holding platform; Minmetals Capital is the financial holding platform of Minmetals Group, which owns Minmetals Securities, Minmetals Trust, Foreign Trade Financial Leasing, Minmetals Futures and other financial licenses.
Financial supervision is mainly a central government responsibility. The central government is more concerned about preventing and resolving financial risks, financial reform, and high-quality economic and financial development, while local governments are more willing to participate in the allocation of financial resources and support local economic development. Therefore, how to effectively coordinate central and local financial supervision and balance risk resolution and financial development is very important for the stable development of China's economy and finance.
In order to strengthen the cooperation between central and local financial supervision, the local coordination mechanism of the Office of the Financial Committee of the State Council was established in various provinces in 2020. The mechanism is convened by the provincial branches of the central bank, and the former Banking and Insurance Regulatory Bureau, Securities Regulatory Bureau, State Administration of Foreign Exchange, Local Financial Regulatory Bureau, local finance and development and reform departments serve as members. However, at that time, some heads of provincial branches of the central bank were only at the deputy department level, making it difficult to coordinate effectively. "Previously, the central sub-branches of the central bank in provincial capitals were mostly at the deputy department level, and they had no right to participate in department-level meetings held by local governments." said an industry expert who declined to be named.
In January 2021, Tao Ling, then director of the Secretariat of the Office of the Financial Committee of the State Council, wrote that the primary goal of financial supervision is to prevent financial risks and protect the legitimate rights and interests of depositors and investors, but some places are more focused on promoting regional economic and financial development, mainly introducing financial institutions to help local enterprises obtain credit, bond issuance and stock listing resources. However, due to insufficient manpower and other reasons, there are weak links and loopholes in local financial supervision and financial risk management.
In particular, in the process of resolving financial risks, local governments tend to let the central financial regulatory authorities take the brunt of the consequences. The China Financial Stability Report (2021) released by the central bank stated that before various investor protection systems were established, the People's Bank of China passively assumed part of the financial risk disposal costs and financial reform costs in order to maintain financial and social stability. However, the generalization of the lender's functions is likely to cause moral hazard. Financial institutions and local governments have repeatedly played games with the central bank on the conditions for the use of funds.
The new round of institutional reform aims to solve the above problems. At the central level, the Financial Committee of the State Council was upgraded to the Central Financial Committee, which is responsible for the top-level design and overall coordination of financial stability and development. At the same time, the Central Financial Work Committee was established to unify the leadership of the Party's work in the financial system.
Since the beginning of this year, the reform of the local financial regulatory system has been launched one after another: first, the establishment of the provincial party committee financial committee and its office, and the provincial party committee financial work committee; second, the provincial party committee financial office, the provincial party committee financial work committee, and the provincial local financial management bureau are co-located. In accordance with the central government's requirements, the provincial party committee established the financial committee and its office, and the financial work committee, which should be set up on the basis of the existing local financial work institutions, that is, one institution, mainly responsible for supervision and risk management, and strengthening the party building work of financial institutions.
As of August 22, many provinces have held meetings of the provincial Party Committee's Financial Committee. According to a review by Jiemian News, the director of the provincial Party Committee's Financial Committee is either the governor or the provincial Party Secretary and the governor, while the director of the provincial Party Committee's Financial Office and the secretary of the provincial Financial Working Committee are concurrently held by the vice governors in charge of finance. The vice governors of finance in some provinces also concurrently serve as deputy directors of the provincial Party Committee's Financial Committee, such as Zhang Xin, vice governor of Guangdong Province, and Huang Zhiqiang, vice chairman of the Inner Mongolia Autonomous Region.
Considering that the provincial party secretary and governor need to coordinate and lead all work in the province, financial work may still be handled by the deputy provincial governor of finance who is also the director of the provincial party committee's financial office and the secretary of the provincial financial working committee. There are a series of difficult problems to be solved, such as how to carry out party building in the local financial system; how to strengthen regulatory communication horizontally in financial supervision, how to coordinate with the central financial office and other departments vertically to facilitate policy transmission; how to balance economic development and risk mitigation, etc.
Wang Junshou's thinking on this issue can provide a glimpse of the situation. Wang Junshou said during the National "Two Sessions" in March this year that it is necessary to strengthen the centralized and unified leadership of the Party Central Committee over financial work and implement hierarchical responsibility according to administrative divisions and institutional levels. The central financial regulatory authorities and their dispatched agencies strictly perform their regulatory duties and strengthen business guidance and supervision of local institutions with financial management functions. Local party committees and governments should strengthen overall coordination, earnestly grasp the party building of local financial institutions, prevent and deal with risks, and ensure local financial stability.
Some places have also set new tones. In July this year, Huang Zhiqiang, executive vice chairman of the Inner Mongolia Autonomous Region, director of the Party Committee's Financial Office, and secretary of the Financial Working Committee, presided over a work meeting to implement the spirit of the National Conference of Directors of Local Party Committees' Financial Offices. He said at the meeting that we must focus on risk prevention and actively and prudently prevent and resolve various risks and hidden dangers in the financial field. We must continue to strengthen supervision and integrate the Party's overall leadership into all aspects of financial work. We must accurately promote development, promote the gathering of financial resources in key areas and weak links of high-quality development, and do a good job in the "five major articles".
The National Conference of Directors of Financial Offices of Local Party Committees was held in Beijing on May 21 this year. Since the deputy governors of finance in each province also serve as directors of the local party committees’ financial offices, they should have attended the meeting.
He Lifeng, director of the Central Financial Office, said at the meeting that we must face the risks and hidden dangers in the financial sector, follow the main line of work of preventing risks, strengthening supervision, and promoting development, pay attention to strategies and methods, adhere to seeking truth from facts, and take measures according to local conditions to do a solid job in the key work of the financial sector. At present, we must coordinate and strictly prevent and control the intertwined risks such as real estate risks, local government debt risks, and local small and medium-sized financial institutions, and severely crack down on illegal financial activities.
The resolution of the above three financial risks has also been mentioned in many high-level meetings recently and is also the focus of current financial work. In recent years, due to the adjustment of the real estate market, local government land sales revenue has been halved, debt pressure has increased sharply, and non-standard defaults of urban investment have increased. Some local small and medium-sized banks have invested more funds in real estate and financing platforms, and their assets have deteriorated. The three types of risks are intertwined.
How to resolve these three types of risks and block the transmission paths between them is a test for the deputy governor of finance. The first meeting of the Hunan Provincial Party Committee's Financial Committee held on July 12 proposed that risk prevention and mitigation should be the eternal theme, focusing on controlling the total amount of local debt risks, focusing on reducing the stock of real estate risks, and focusing on preventing financial risks from changing, so as to effectively eliminate all kinds of risk hazards in the bud.
According to a review by Jiemian News, most of the 17 vice governors of finance majored in economic management, which is very suitable for financial work. Eleven of them have obtained a master's degree or above (excluding those who are working), accounting for as high as 65%, and five of them have obtained a doctorate degree.
When dealing with debt issues, the deputy provincial governors for finance will respond more professionally and will persuade institutional investors through professional communication. Between 2019 and 2022, provinces such as Guizhou, Shanxi, and Tianjin successively held bond investor forums, where the local deputy provincial governors for finance personally led the team to attend and directly faced investors' questions, which played a positive role in boosting the local regional credit environment.
For example, Tianjin held a bond market investor forum in June 2021, where then-Vice Mayor Kang Yi explained Tianjin's economic development and open market bond risk prevention measures. Kang Yi said that Tianjin will improve the assessment system for state-owned enterprise leaders, sign debt risk responsibility letters, and pursue and hold accountable those who fail to prevent and resolve open market bond default risks and damage the legitimate rights and interests of investors.
Kang Yi has extensive experience in the financial industry. He worked at CCB for more than 20 years. In November 2016, he became the vice president of ABC and a year later, he became the vice mayor of Tianjin. After serving as the vice mayor of Tianjin for four years, he was transferred to the director of the National Bureau of Statistics in March 2022.
According to Jiemian News, in addition to being in charge of financial affairs, the deputy provincial governors of finance are also in charge of development and reform, finance, taxation, culture and tourism, etc., facing a more complex social and economic ecology. Among them, eight deputy provincial governors of finance also serve as members of the provincial party committee standing committee, which enables them to better coordinate provincial resources to resolve risks.
Collect and organize the latest news information and make it available for free for everyone to read
