China keeps central bank governor, finance minister in their ‎posts

China unexpectedly kept its central bank governor and finance minister in place during the annual session of parliament on Sunday, prioritizing ensuring policy continuity at a time when internal and external economic challenges loom on the horizon.

According to “Reuters”, President Xi Jinping broke with the custom by retaining Yi Jang (65 years) as governor of the People’s Bank of China and Liu Kun (66 years) as finance minister, while he began appointing allies in key positions as part of amendments that come with the beginning of his term, the third in five years.

But the changes came less than expected as most cabinet ministers retained their posts. However, more changes are expected to be announced in the coming weeks as China implements a reorganization process for its financial sector and other government agencies.

“Choosing continuity in these sensitive economic roles shows concern for credibility and stability,” said Matti Beckink, director of China at the Economic Information Network at The Economist.

“It may also be an implicit acknowledgment of some of the challenges that Beijing is facing at the moment… The real challenge for the third Xi administration is whether it will deal with the structural imbalances in the Chinese economy and implement the necessary reforms to ensure China’s ability to compete in the long term,” she added.

The government has set a target for economic growth in 2023 at about five percent, up from three percent last year, which was one of its lowest rates of economic growth in decades.

As expected, on Sunday, China appointed Li Shangfu, who is subject to US sanctions over Russian arms purchases, as defense minister, and announced four vice premiers of the State Council.

The most prominent reshuffle in the parliamentary session was the promotion of Li Qiang, 63, who is close to President Xi, as Premier of the State Council on Saturday. The former leader of the Communist Party in Shanghai thus assumes a role dominated by economic management tasks, replacing Li Keqiang, 67, who leaves office after two five-year terms.

Central bank governor Yi, who was educated in the United States and was appointed to the post in 2018, had been widely expected to retire after leaving in October from the ruling Communist Party’s Central Committee during the party’s five-year congress.