China delays retirement of senior state banker: sources
Chinese President Hu Jintao has delayed the retirement of China Development Bank's (CDB) chairman, sources said, suggesting that Beijing wants to keep a steady hand at the helm of the country's most powerful policy bank at a time of rising economic risks and global market volatility.
In its policy role, state-owned CDB provides loans to China's largest infrastructure projects and offers financial aid for China's industrial giants to internationalize.
Chen Yuan, 66, will stay on as the bank's chairman until his five-year term ends in 2013 despite passing the compulsory retirement age of 65 for cabinet ministers, said two sources who have direct knowledge of the situation.
The sources, who have ties to China's top leaders, declined to be named, since they are not authorized to speak with the media.
China's economy continues to grow strongly despite sputtering growth in the United States and Europe, but the country's leaders worry that the growing debt crisis abroad could hurt China's prospects. Stability at CDB could make it easier for the government to manage local government debts.
Politics also appear to have played a role in the move.
President Hu made an exception for Chen due in part to the latter's political pedigree in a bid to woo "princelings" -- the children of the country's political elite -- ahead of a sweeping Communist Party leadership reshuffle next year, said the sources.
"Hu Jintao kept on Chen Yuan to show goodwill to 'princelings'," one of the sources told Reuters.
Good relations with China's politically influential princelings could help Hu secure promotions for his proteges after he steps down in 2012, say analysts.
It was not clear whether two other ministerial-level officials who have reached or passed the compulsory retirement age -- banking regulator Liu Mingkang who turns 65 this month and 66-year-old state pension fund chief Dai Xianglong -- would also have their terms extended.
Senior Chinese officials rarely stay in their posts past retirement age.
Chen chose to remain in CDB for now, turning down an offer from Hu to promote him to a vice-chairman of the top advisory body to parliament, the second source said, adding that he is likely to be appointed to the advisory post in 2013.
Chen is no ordinary banker. He is the eldest son of Chen Yun, a comrade-in-arms of Mao Zedong and for decades China's most influential economic planner.
The older Chen, who died in 1995, was best known for his "bird cage economy" theory likening China's socialist market economy to a bird that should be kept from flying away by the cage of state control.
During his 10-year stint as CDB president, Chen Yuan secured a higher profile for CDB, buying a stake for his bank in Britain's Barclays Plc and making it a pioneer in China's asset-backed securities market.
Chen's bank also plays a key role in Beijing's strategy of securing resources around the globe. At a summit in April this year, Chen signed local currency credit deals with its BRICS counterparts and is ready to pump up to 10 billion yuan ($1.6 billion) of loans into Brazil, Russia, India and South Africa as the first batch. China in turn is expected to receive oil and minerals from these projects.
"Chen Yuan is not just trustworthy, but knows his job," said Huang Jing, a veteran China watcher and director of the Center on Asia and Globalisation at National University of Singapore.
The bank was one of the main sources of the lending to China's troubled local government financing vehicles. Those loans, estimated to total $1.5 trillion, are a source of worry for the government, which fears that a slowing economy could trigger defaults.
CBD's assets grew to 5.1 trillion yuan in 2010 compared with 4.5 trillion yuan in 2009 and 3.8 trillion yuan in 2008, according to the bank website (www.cdb.com). Its non-performing loan ratio was 0.68 percent in 2010, down from 0.94 percent in 2009 and 0.96 percent in 2008.
CDB has transformed itself into a commercial bank, but Chen told domestic news portal Sohu (www.sohu.com) in June that there was no timetable for his bank to list.
[Source: By Benjamin Kang Lim, Reuters, Beijing, 12Aug11]
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