China's Zhou to remain chief of central bank

The re-appointment of Zhou, a key driving force behind China's financial liberalization, signals Beijing's bid to put economic growth on a more sustainable footing.

“By keeping Mr. Zhou as the central bank governor, the new leaders signal that they endorse what Mr. Zhou has achieved and wish to continue China's unfinished financial reforms,” said Ting Lu, China economist at Bank of America-Merrill Lynch in Hong Kong.

“We expect China's new government to further liberalize exchange rates, lift capital controls, liberalize interest rates, open up the banking sector and develop capital markets.”

Zhou, who took the helm of the People's Bank of China (PBOC) in 2002, has led the drive to liberalize interest rates and abolish the yuan's peg to the U.S. dollar, a step along the path to turning it into a global currency.

Reuters reported last month that Zhou was to keep his central bank post, courtesy of his elevation to the Chinese People's Political Consultative Conference (CPPCC) that carries “national-level leader” rank and exempts him from compulsory retirement at 65 for officials in cabinet minister-ranked jobs.

Zhou reached that age in January.

The announcement, which was widely anticipated following Zhou's election to the CPPCC, came on the penultimate day of China's annual session of parliament, the National People's Congress.

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