New chiefs at China’s top banks signal further reshuffles ahead

The reshuffle at the top of two of China’s largest state-controlled banks is the latest phase of a management change for the country’s $40 trillion financial industry, as the government seeks to restrain any turbulence ahead of a twice-a-decade meeting of the ruling Communist Party.

Tian Guoli (田國立), formerly chairman of Bank of China Ltd., has been named as the new chairman of China Construction Bank Corp., succeeding Wang Hongzhang, who is retiring, people familiar with the matter said on Monday. Chen Siqing (陳四清), previously Bank of China’s president, has been promoted to become the bank’s party secretary, a Communist party role that typically paves the way for him to take the chairmanship, the people added.

The changes “show leadership reshuffles in financial and economic sectors will become a general trend,“ said Hu Xingdou, an economics professor at the Beijing Institute of Technology. ”The leadership wants to install people that they can trust to clean the troublesome financial industry.“

As President Xi Jinping prepares for a leadership transition this fall, China’s regulators have been attempting to clamp down on financial risks, with policymakers now targeting everything from corporate acquisitions to returns on savings products banks sell to yield-hungry consumers.

Other moves at the top of state banks and at the country’s regulators are likely, and suggest the government is maintaining its tight control over the levers of the financial system ahead of the Party congress, said Oliver Rui, professor of finance at the China Europe International Business School in Shanghai. “We are going to see further consolidation of power from the Party over its control of China’s biggest financial institutions,” Rui said.

As well as filling Chen’s role at Bank of China, the government is expected to appoint a new chairman for the China Insurance Regulatory Commission and an assistant chairman for the China Banking Regulatory Commission, as former officials holding the jobs are being probed for corruption.

Another senior financial role will come vacant if Ma Kai, one of the country’s four vice premiers and responsible for macroeconomic policies, retires as expected after the party congress. Wang Yang, another vice premier who oversees commerce, is likely to take a new role. And Zhou Xiaochuan, the nation’s longest-serving governor of the central bank, may retire.