Headquarters of the People's Bank of China.
Credit: Reuters Photo
Beijing/Hong Kong: China is set to appoint Zhu Hexin, a veteran banker and chief of state-run financial conglomerate CITIC Group, as the new head of its foreign exchange regulator, four people familiar with the matter said, amid growing headwinds for the economy and markets.
Zhu's appointment to lead the State Administration of Foreign Exchange (SAFE) is expected to be announced as soon as this week, said one of the sources.
Zhu, 55, would also be named a deputy governor of the People's Bank of China (PBOC), which oversees the foreign exchange regulator, said the source.
Three sources said that the ruling Chinese Communist Party's so-called central organisation department conducted suitability checks on Zhu last week, a practice followed for all high-profile government appointments in the country.
Representatives at the PBOC, SAFE, and CITIC did not immediately respond to Reuters' requests for comment. Reuters was not able to reach the party's central organisation department and Zhu for comment.
All the sources did not wish to be named as they were not authorised to speak to the media.
Zhu's appointment as the head of SAFE will come at a time when the world's second-largest economy is struggling to boost growth, fend off risk of financial instability, and stabilise the currency to stem capital outflows.
A severe downturn in the property sector, which accounts for about a quarter of economic activity in China, and a mountain of local government debt also pose major challenges for the banking sector and the broader economy.
Zhu will take over the forex regulatory head role from Pan Gongsheng, who has held the post since 2016 and who was named the central bank governor in July. Zhu was also a contender for the PBOC governor role, Reuters and other media had reported.
He previously held senior posts at state lenders Bank of Communications and Bank of China.
An engineering graduate from the Shanghai University of Finance and Economics, Zhu has also been a deputy central bank governor, and vice governor of Sichuan province in southwestern China.
His challenges appear formidable.
Chinese government advisers will recommend growth targets for next year ranging from 4.5 to 5.5 per cent to a policymakers' meeting, as Beijing seeks to create jobs and keep long-term development goals on track, Reuters reported on Wednesday.
China's yuan has lost nearly 3.5% against the dollar so far this year, but peak pessimism may have passed as the yuan firmed 2% in the past week amid a weak U.S. dollar and persistently strong yuan midpoint fixings.
Capital outflows from China rose sharply to $75 billion in September, the biggest monthly figure since 2016, Goldman Sachs' preferred gauge of foreign exchange flows showed, underscoring intensifying depreciation pressure on the yuan.