October 31, 2011 / 12:46 AM / 7 years ago

RPT-NEWSMAKER-A steady reformer for China's securities regulator

(Repeats story first sent on Oct 29)

By Nick Edwards

BEIJING, Oct 29 (Reuters) - Guo Shuqing, China’s new securities regulator, has climbed to the top of China’s financial ranks by sticking to a formula combining a balanced approach to risk with gradual reform.

Guo’s favourite proverb — “Listen to both extremes and take the middle course” — speaks volumes about the approach the former chairman of China Construction Bank took to managing the world’s second-most valuable financial institution.

“Don’t take too much risk. But not too little either. If you don’t take any risk how can you make any money,” he quipped in an interview with Reuters last year.

On Saturday, China announced that Guo had stepped down as CCB chairman to take the reins at the China Securities Regulatory Commission, a job that will offer plenty of chances to ponder risk and reform in the country’s scandal-prone capital markets.

The 54-year-old former academic known for his plain-folk style, has spooned out his share of bitter medicine over a three-decade career, including asking CCB shareholders last year to cough up billions to recapitalise the bank after a state-led lending binge in 2009 to prop up China’s economy during the global downturn.

“Guo is a politician who also has a profound understanding of the global economy,” said a CCB banker while Guo was still the bank’s chairman. “He may not be familiar with every aspect of the banking business, but he has a long-term vision that has placed customer-service at the core.”

The philosophy major and Oxford-educated scholar, who speaks English fluently, has moved easily between academia, government and a rapidly growing commercial sector that has helped China become the world’s second-biggest economy.

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Guo, a native of the poverty stricken Inner Mongolia autonomous region, says he washes up the dishes by hand at home most days.

“It’s good exercise... I don’t want to use a dishwasher and waste water or electricity,” he said in the Reuters interview, as several of his top lieutenants sitting next to him looked on.

A pragmatist, Guo studied for a master’s degree in Marxist and Leninist theory, writing a thesis titled “Thoughts About Certain Fundamental Problems in China’s Economy” that warned of grave risks of using Western macroeconomics theories in a China which had just begun to embrace reform.

The new securities regulator, who enjoys tennis, has published several books on China’s economy, including one co-authored with Zhou Xiaochuan, head of China’s central bank.

His ascent through the ranks of the financial elite saw him serve as vice governor of inland Guizhou province, and later as chairman of the country’s foreign exchange regulator, the State Administration of Foreign Exchange (SAFE) from 2001-05.

Guo came in for criticism while at SAFE for using taxpayer money to bail out the country’s major lenders in an attempt to make them more market oriented.

He joined CCB, which counts Bank of America as a strategic shareholder, as chairman in 2005 after SAFE’s $22.5 billion bailout left the agency as the bank’s largest shareholder.

Seven months after Guo took over, CCB sold shares publicly for the first time in Hong Kong and two years later in Shanghai, making it the first state-owned Chinese lender to float shares in both bourses.

After leading CCB out of the woods, rumours had swirled about what would be next for the academic-turned-official-turned-executive. His new job as chairman of the securities regulator was on the list of possibilities, and some even said central bank governor.

“No, no, that’s just a rumour,” he said during the earlier interview, laughing. “I don’t mind retiring after this.” (Additional reporting by Samuel Shen; Editing by Don Durfee and Brian Rhoads)

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