Exclusive: China may replace key cabinet official to battle slowing growth, market turmoil

BEIJING (Reuters) - Beijing is close to naming the mayor of China’s fastest-growing metropolis as Premier Li Keqiang’s right-hand man to help tackle a stalling economy and market turbulence, a dramatic move that underlines government unease about financial stability.

Chongqing mayor Huang Qifan speaks during a news conference in Beijing in this March 4, 2011 file photo. REUTERS/Stringer/Files

The planned personnel change close to the pinnacle of power in China comes after renewed turmoil on the stock and currency markets this year that sparked fresh concerns about whether regulators were up to the job of maintaining order.

Huang Qifan, 63, mayor of the southwestern metropolis of Chongqing since 2010, is tipped to replace Yang Jing, 62, as secretary-general of the State Council, or cabinet, two sources with ties to the leadership and two financial industry sources told Reuters.

“Huang Qifan did an excellent job in Chongqing,” one source with leadership ties said. “Hopefully, his appointment would boost investors’ confidence and stabilize the stock market.”

As well as the immediate challenge of reducing market volatility, the government faces an uphill battle to achieve annual average economic growth of at least 6.5 percent from 2016 to 2020.

China expects growth in the world’s second-largest economy to cool to around 7 percent in 2015, the slowest rate in a quarter of a century.

The cabinet secretary-general helps the premier oversee the entire spectrum of portfolios from the economy to finance, industry, agriculture, energy, the environment, state planning and technology, among others.

If confirmed, Huang would be the sixth most powerful cabinet official after Premier Li and four vice premiers, the sources said.

While the exact nature of his role is unclear, the sources added that Huang would help Li coordinate various ministries and technically have similar, if not more clout than the vice premiers, who have specific portfolios.

The State Council Information Office did not immediately respond to faxed requests for comment and the Chongqing city government declined immediate comment when reached by telephone.

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Chongqing’s economy grew at 11 percent in the first nine months of 2015 from a year earlier, versus 10.9 percent in the whole of 2014, defying slowing economic growth nationally.

It also retained its lead among 31 provinces and provincial-level municipalities.

In addition to the impressive statistics, Huang was among a handful of provincial officials who accompanied Chinese President Xi Jinping on a state visit to the United States last year, a sign his political star was on the rise.

Huang is widely respected as an expert on financial and economic affairs, appearing frequently as a commentator in domestic media.

He is also a political survivor, weathering a scandal in 2012 which clipped the wings of his high-flying and flamboyant boss, Bo Xilai, then Chongqing party secretary and a member of the party’s decision-making Politburo.

In China, the downfall of a senior politician can often spell the same fate for his closest allies.

It was not immediately known where Yang, the outgoing cabinet secretary-general, would go next.


Huang had previously been named as a potential replacement for the embattled head of the China Securities Regulatory Commission, Xiao Gang.

On Tuesday, Reuters reported that the cabinet had set up a working group to upgrade its financial section to serve as an interim manager until a “super regulator” structure can be put into place, aimed at better coordination between the country’s banking, securities and insurance watchdogs.

It was not clear how Huang’s appointment as State Council secretary-general, should it be confirmed, would affect that process, if at all.

An announcement on Huang could come after a meeting of the elite Standing Committee of the National People’s Congress, or parliament, this month or next, or during parliament’s annual full session in March.

The ruling Communist Party’s Organisation Department, which is responsible for personnel changes, has done background checks on and spoken to three candidates in recent months, the sources said.

“Huang Qifan is the front-runner,” a second source with leadership ties said.

The others are Bayin Chaolu, who turns 61 this year and is party boss of the northeastern province of Jilin, and You Quan, 62 this month and party boss of the southeastern province of Fujian.

The sources spoke on condition of anonymity because they were not authorized to speak to the media, and the planned personnel change was still being finalised.

Huang, who holds a rank equivalent to a cabinet minister, is near the retirement age of 65 for officials of his seniority, but it is not unusual for key appointees to work past retirement age.

Additional reporting by Meng Meng; Editing by Mike Collett-White and Pete Sweeney