China's forex regulator named party chief at construction bank

Asian Economic News, March 21, 2005

BEIJING, March 18 Kyodo

China's top foreign exchange regulator Guo Shuqing has been named China Construction Bank's Communist Party chief, the bank said in a statement dated Thursday, a day after the resignation of its chairman amid graft allegations.

Guo, director of the State Administration of Foreign Exchange and a vice governor of the People's Bank of China, the country's central bank, was named to the powerful post Thursday, according to the statement posted on the bank's website.

The announcement was made after Zhang Enzhao resigned from his post as chairman of China Construction Bank on Wednesday. Friday's statement did not say whether Guo will assume the post of chairman.

Officially, Zhang stepped down for ''personal reasons,'' but the news came amid Chinese newspaper reports that he is under investigation for graft.

The bank's president, Chang Zhenming, is taking over the post of chairman temporarily.

The resignation of Zhang has raised concern it may hurt the Chinese government's plan to list the bank as well as the Bank of China on the stock market, possibly overseas or in Hong Kong and Shanghai.

Guo's appointment to the post at China Construction Bank may also send ripples to foreign exchange markets.

The appointment comes at a time when China is under pressure from other countries to introduce more flexibility in the foreign exchange rate mechanism.

China maintains a peg of about 8.28 yuan to the dollar, which is blamed by countries such as the United States for making their goods too costly in China and Chinese-made exports too cheap.

Japan's Shinsei Bank President Masamoto Yashiro serves as an independent director at the bank.