You may remember that the Chairman of Sinopec, Chen Tonghai, suddenly resigned last June. This prompted plenty of discussion about whether there had been a disagreement with the government over the level of subsidies paid to keep domestic oil product prices low.
Now, this morning, China’s Finance Minister, Jin Renqing, has also quit. There are suggestions that this reflects rising official concern over accelerating Chinese inflation and the surging stock market. The timing is also a surprise, coming as it does just 6 weeks before the 5 yearly Communist Party Congress, and is sure to prompt questions about possible policy changes.
However, according to AFX News, there is another side to the story, and the two resignations are linked. They quote a report in Hong Kong’s Ming Pao newspaper that says ‘Jin was sacked after he introduced a woman to Chen’, and she then became Chen’s mistress. They add that ‘the relationship between Jin and the unnamed woman was unclear’.
The role of Finance Minister in China is fairly critical in today’s global economy, as is the Chairmanship of Sinopec. One waits to see whether more will emerge about whether policy, or personal, reasons were behind these sudden departures. Do any readers have more information that they could share with us?
2 thoughts on “China’s Finance Minister resigns”
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If the real motive is performance in the job (rather than on the job!) this could indicate a shift in policy direction.
A Chinese bureaucrat was quoted as saying, shortly after WTO entry, “China is like an elephant riding a bicycle”.
By this he meant that China had to peddle very hard in terms of economic growth to avoid a heavyweight accident.
The policy to date seems to have been to talk about cooling the economy down, while in reality allowing growth in excess of 10% to substitute all the jobs being lost as a result of WTO accession.
But if the Finance Minister has been sacked for not controlling inflation, as I said, this could be a shift in the direction of economic policy, raising the dilemma of how growth can be moderated while still creating sufficient jobs to guarantee social stability.
But perhaps the bigger risk to stability is a stock market crash, made all the more likely by the current bubble in mainland indices.
Looks like a change in policy to me.