Responses to Yi Gang’s appointment as PBOC governor

Yi Gang has been appointed as the governor of the People’s Bank of China, replacing governor Zhou following the latter’s retirement

Below are some of the responses by economists on his appointment:

Lu Ting, chief economist at Hua Tai Securities in Hong Kong

“With comprehensive academic training and over two decades experience in central banking, Governor Yi is a discreet, pragmatic and firm reformer who’ll surely push forward market-oriented reforms on liberalizing interest rates, enhance renminbi exchange-rate flexibility and mitigate financial risks”.

Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered in Hong Kong

“This means a seamless transition. Policy continuity is ensured, and that’s going to set the mind of the markets at ease. The direction of opening up and reform in the financial sector will not falter”.

Leland Miller, president of China Beige Book International

“From a markets perspective this is nothing but good news. But the reality is that while Yi Gang will run the PBOC, he won’t run Chinese monetary policy. Liu He will be his boss, Xi Jinping will be Liu He’s boss, and everything will be run from the top”.

Frederic Neumann, co-head of Asian economics research at HSBC Holdings in Hong Kong

“Yi’s appointment as governor of the PBOC signals continuity. Yi has worked closely with his predecessor Zhou Xiaochuan, and will likely continue to push for reforms, including opening China’s capital markets and liberalizing the exchange-rate regime. As a technocrat, Yi commands considerable expertise, providing a steady hand at the top of China’s central bank that now has extended powers over macroprudential policies”.

The consensus seems to be that his appointment is good news, and it is definitely very much a continuation of things from Zhou. Pretty much a “seamless transition” as put forth in the responses above.

But it’s going to be a tough task for Yi who comes in at a time when the focus of China’s administration is to deleverage and to deal with persistent problems surrounding financial risks over the last decade.