* Zhou re-appointed central bank chief
* Lou Jiwei appointed finance minister
* Xu Shaoshi named top economic planner
* Gao Hucheng named commerce minister
By Sui-Lee Wee and Kevin Yao
BEIJING, March 16 China kept Zhou Xiaochuan on
as governor of the central bank on Saturday in a bid to speed up
market-based reforms needed to sustain long-term growth in the
world's second-largest economy and to ensure policy continuity
amid global uncertainties.
The re-appointment of Zhou, a key driving force behind
China's financial liberalisation, signals Beijing's bid to put
economic growth on a more sustainable footing.
"By keeping Mr. Zhou as the central bank governor, the new
leaders signal that they endorse what Mr. Zhou has achieved and
wish to continue China's unfinished financial reforms," said
Ting Lu, China economist at Bank of America-Merrill Lynch in
"We expect China's new government to further liberalise
exchange rates, lift capital controls, liberalize interest
rates, open up the banking sector and develop capital markets."
Zhou, who took the helm of the People's Bank of China
(PBOC) in 2002, has led the drive to liberalise interest rates
and abolish the yuan's peg to the U.S. dollar, a step along the
path to turning it into a global currency.
Reuters reported last month that Zhou was to keep his
central bank post, courtesy of his elevation to the Chinese
People's Political Consultative Conference (CPPCC) that carries
"national-level leader" rank and exempts him from compulsory
retirement at 65 for officials in cabinet minister-ranked jobs.
Zhou reached that age in January.,
The announcement, which was widely anticipated following
Zhou's election to the CPPCC, came on the penultimate day of
China's annual session of parliament, the National People's
It was unclear how long Zhou will remain central bank chief,
but a source with leadership ties told Reuters last month that
he was needed to drive capital account reform. Zhou will be the
longest-serving central bank chief since the establishment of
the People's Republic of China in 1949, and among the
longest-serving in the world.
Analysts believe the PBOC aims to make the yuan basically
convertible by 2015. But formidable challenges lie ahead as the
country has entered a stage where big changes face push-back
risks from vested interests, especially from state giants in key
In the near term, Zhou has to keep inflation, which climbed
to a 10-month high of 3.2 percent in February, at bay while
ensuring the economic recovery remains on track.
Zhou said this week that China must stabilise inflation
expectations and vowed to manage the risk of rising prices as
the central bank's first priority. [ID: nL3N0C518Y]
China's parliament also appointed Lou Jiwei, former head of
China Investment Corp., the nation's sovereign wealth
fund, as finance minister on Saturday.
Lou, a key architect of China's tax reforms in 1994, will
lead reforms to lower the tax burden on smaller firms, with more
fundamental changes needed to wean growth-obsessed local
governments off their reliance on land sales for survival.
"His appointment is not a surprise given that Lou is an old
hand on finance and tax issues," said Haibin Zhu, China
economist at JPMorgan Chase in Hong Kong.
"Finance and tax reforms are unavoidable but will probably
be the most difficult."
China's former land and resources minister, Xu Shaoshi, was
named chairman of the National Development and Reform
Commission, the economic planning agency that wields approval
authority over major investment projects.
Gao Hucheng was named commerce minister to oversee the
country's vast export sector amid rising spats with trade