Thursday, August 18, 2005

As a follow-up, a reporter read my piece and asked to what extent is Huijin really a "subsidiary" of the PBOC. This is a good question, and I provide my answer below:

Strictly speaking, Huijin is a subsidiary of SAFE, which is the sole "investor" in Huijin, but SAFE is an entity subordinate to the PBOC. In operational terms, it answers directly to the State Council Leading Group on Restructuring the State-owned Banks, which is headed by VP Huang Ju, but the daily affairs of the LG is handled by the head of the main office, Zhou Xiaochuan. Also, I am not a 100% sure, but I think Guo Shuqing still doubles as the chairman of the board at Huijin, while Xie Ping serves as CEO. Both spent years in the PBOC/SAFE network. Granted, there are MOF officials on the board, and the vice chairman of the board has deep MOF experience. Nonetheless, I think MOF influence took a big hit when Xu Fangming, a board member and head of the MOF financial department, was arrested in suspicion of corruption. Thus, I think the PBOC, through Zhou, has the dominant influence over Huijin.

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