China central bank rumors

Chinese central bank chief Zhou Xiaochuan may lose his job, following internal battles over modernizing the economy, the Wall Street Journal reported Thursday.

Quoting officials with knowledge of the plan, the paper claimed President Xi Jinping was considering replacing the Zhou who had led the People's Bank of China since 2002. The latter has been the architect of broad financial reforms in the world's second-largest economy, helping fledgling capital markets to develop.

Chinese officials said the departure of Zhou would be justified on the grounds of the 66-year-old's age. But the Wall Street Journal insisted that disagreements over financial and monetary policies would be the real reason for his ouster.

Growth worries

Zhou has been pressing for more market reforms, including a liberalization of interest rates. But the party leadership fears the impact of an economy whose growth has slowed recently.

China is at risk of falling short of the government's 7.5-percent GDP expansion target, raising investor expectations that policymakers would further loosen fiscal policy to stoke growth.

However, senior leaders have publicly ruled out any dramatic policy easing, saying that China cannot always depend on easy credit to lift its economy.

The Wall Street Journal said if a reshuffle would come about, the governor of Shandong province, Guo Shuqing, would be the main candidate to be Zhou's successor. Guo is a former banker and securities regulator.

hg/cjc (dpa, Reuters)