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Personnel Tracker

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Xiao Yaqing (肖亚庆) takes State Administration for Market Regulation Director-General, replacing the retiring Zhang Mao (张茅)

Incumbent State Asset Supervision and Administration Commission (SASAC) Party Secretary Hao Peng (郝鹏) takes Xiao’s SASAC Chairman position concurrently. On 21 May 2019, State Council appointed Xiao Yaqing as the new SAMR Director-General, replacing Zhang Mao, who is retiring due to age limit—Zhang was born in 1954 and has reached age limit set for full ministerial-ranking officials. Xiao’s SASAC Chairman vacancy has been taken concurrently by his colleague, incumbent SASAC Party Secretary Hao Peng. Zhang Mao is a well-connected princeling, whose father was one of the early-generation leaders of Xinhua News Agency’s HK Branch since early 1990s. Zhang’s father-in-law was Gu Mu, former Vice Premier of the State Council. Zhang was initially appointed SAMR Party Secretary in March 2018 when the SAMR was newly established, with Bi Jingquan (毕井泉) serving as its founding Director-General. Following the Changchun vaccine scandal of 2018, Bi resigned and Zhang took SAMR Director-General position subsequently. Xiao is a renowned reformer and a very capable SOE manager during his tenure as Chinalco Chairman, as well as during his latest tenure as SASAC Chairman. Yet, Xiao is known to be an outspoken advocate for stronger role of SOEs and state-owned assets in China’s economy—his latest appointment to SAMR will raise question in the market on the future trajectory of China’s market reform. Following the March 2018 restructuring of State Council, SAMR now combines the full or partial capacity of State Administration of Industry and Commerce (SAIC), MOFCOM, National Development and Reform Commission (NDRC), and State Council Anti-Trust Commission. Xiao’s position will be critical in understanding China’s future approach to anti-trust review, and of course, its approach to foreign investment review, as China catches up with the United States on making SAMR into an agency with the mandate similar to that of CFIUS. Hao Peng is one of the defense technocrats that are in hot seats since Xi took power—Hao worked for 17 years in AVIC’s Lanzhou subsidiary before entering into the government. Currently, there are nearly a dozen officials of full ministerial/provincial ranking who have spent a significant amount of their career in China’s defense technology sector, including Heilongjiang Party Secretary Zhang Qingwei (张庆伟), Liaoning Party Secretary Chen Qiufa (陈求发), Guangdong Governor Ma Xingrui (马兴瑞), and Hunan Governor Xu Dazhe (许达哲).

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Former CSRC chief ousted

News: Former China Securities Regulatory Commission (CSRC) Chief Liu Shiyu (刘士余), who was transferred to All-China Federation of Supply and Marketing Cooperatives (ACFSMC) as Vice Party Secretary in January, turned himself in today to CCDI. Liu is now under investigation for violation of party displine and law. Quick Take: Liu had previously based his entire career in the financial sector—he spent ten years in PBOC and two years in Agricultural Bank of China, and was appointed CSRC chief in Feb 2016. In January this year Liu was replaced by Yi Huiman (易会满), and was transferred to ACFSMC, an institution established in the 1950s and now overseen by the State Council. Liu’s case is most likely related to the IPO of banks in his hometown Jiangsu Province and may have broader repercussions in the financial sector. Contact us for more in-depth analysis on Liu’s case. Fujian vice governor appointed secretary-general… News: Fujian Vice Governor Zheng Xincong (郑新聪) was appointed Fujian CCPSC member and Secretary-General today. Quick Take: A Fujian local, Zheng had been working for the province since 2001 and previously served in several prefectural-level cities. He was appointed Fujian Vice Governor in January 2018. Currently, Fujian is still lacking its Political and Legal Affairs Commissions Chief and Organization Department Chief.

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Former China Securities Regulatory Commission (CSRC) Chairman Liu Shiyu (刘士余) surrendered himself to Central Commission for Discipline Inspection (CCDI)

Liu is the third full-ministerial-ranking officials under investigation in 2019, the second full-ministerial-ranking officials who surrendered to CCDI voluntarily, the other being former Yunnan Party Secretary Qin Guangrong (秦光荣), and the first incumbent Central Committee full member to surrender to CCDI voluntarily. There has been rumor on Liu being investigated by CCDI ever since he was removed from CSRC in January 2019 and appointed to All-China Federation of Supply and Marketing Cooperatives (ACFSMC) as Chairman. Since its founding in 1954, the state-owned ACFSMC has played an important role in China’s rural areas. As well as satisfying the daily demands and needs of rural residents, it has also provided Chinese farmers with agricultural products, including seeds, fertilizers, fuel and machinery services, while simultaneously helping them with transportation, packaging, marketing and the sales of their agricultural products via its enormous network. Yet, ACFSMC is largely a “retirement” place and many suspected Liu’s move to ACFSMC as a way for CCDI to fully investigate his wrongdoings in CSRC without his interference. Liu is potentially implicated for two reasons. First, Liu shared office with ousted Huarong Asset Management Co. Ltd. Chairman Lai Xiaomin (赖小民) for four years from 1998 to 2002 in People’s Bank of China (PBOC)—it is likely that Liu as CSRC Chairman did favor for Lai, who had run one of China’s biggest asset manager for a decade. Second, during Liu’s tenure as CSRC Chairman, which was known for harsh regulation on IPOs, dozens of urban commercial banks of Jiangsu province conducted IPO in China’s A-share. Liu is a Jiangsu native and this pattern was suspected by many as Liu’s favoritism over his home province.

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MFA’s Department of Asian Affairs Director Chen Xu (陈旭) becomes new Chinese Ambassador to UN Geneva

On 17 May 2019, MFA’s Department of Asian Affairs Director Chen Xu becomes Chinese Ambassador to UN Geneva. Chen’s appointment has followed the pattern of the position—China has been appointing officials from MFA and Ministry of Commerce (MOFCOM) alternately to the position of Chinese Ambassador to UN Geneva. Chen’s predecessor to the position was Yu Jianhua (俞建华), who has been a career MOFCOM official and had been appointed China’s Trade Representative and Deputy Minister at MOFCOM a month ago. Yu’s predecessor to the position was Ma Zhaoxu (马朝旭), who was a career MFA official now serving as Chinese Ambassador to UN in New York City.

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Former Ningxia organization department chief transferred to CAC

News: Former Ningxia Organization Department Chairman Sheng Ronghua (盛荣华) was transferred to Cyberspace Administration of China (CAC) as deputy director of its general office today. Quick Take: A Hunan local, Sheng had previously worked in Hunan province for 34 years until Feb 2017, when he was transferred to Ningxia as Organization Department chief. Interestingly, Sheng is now the only CAC general office deputy director with no prior experience in the cyber industry—both of his two other colleagues Yang Xiaowei (杨小伟) and Liu Liehong (刘烈宏) were leading central SOEs in telecommunication before their appointment to CAC. Moreover, there had been a notable wave of personnel reshuffling among provincial Organizational Department heads—Sheng’s appointment today is the 9thsince 2019. Now Jilin, Heilongjiang, Fujian, Jiangxi and Ningxia are all lacking their Organization Department chiefs. Personnel change in MFA continued… News: Former national counter-terrorism security commissioner Cheng Guoping (程国平) was appointed to the Department of External Security Affairs at MFA today. Quick Take：Cheng’s political career has been mostly based in MFA—his previous posts include Department of European and Central Asian Affairs Director-General, and ambassador to the Republic Kazakhstan. He was appointed MFA Vice Minister in 2011, but left MFA in 2016 for a special post as national counter-terrorism security commissioner, administered directly by the central government. Born in 1952, Cheng is now aged 67, already above the age limit set for vice-ministerial level official. His appointment today is a good indicator of the rising importance of external security in foreign affairs matters.

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China appointed a vice-ministerial ranking minister-counselor to Chinese Embassy in Japan

On 16 May 2019, former Ministry of Science and Technology (MST) vice-ministerial ranking official Xia Mingjiu (夏鸣九) was appointed Minister-Counselor of the Chinese Embassy in Japan. The news came into light at the beginning of June 2019. Historically, State Council ministries have been tasked to appoint their officials to Chinese embassies across the world to assist the work of ambassadors on respective areas. For example, China’s counsels on trade and commerce are usually from MOFCOM while counsels on culture and tourism are usually from Ministry of Culture and Tourism, instead of being from Ministry of Foreign Affairs (MFA). These counsels are usually selected from (vice-) departmental ranking officials, primarily because the highest ranking an ambassador can have in China is vice-ministerial. Xia’s appointment to Chinese Embassy in Japan broke this tradition—Xia is effectively of the same ranking as Chinese Ambassador to Japan. Xia will likely be tasked to facilitate technology cooperation between China and Japan, an initiative that is particularly important as China faces technology stalemate with the United States and may no longer be able to gain any technology know-how from the United States. Japan as a leader in technology sector becomes a natural choice for China to mingle with.

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Heilongjiang official transferred to Ministry of Civil Affais

Heilongjiang official transferred to Ministry of Civil Affais

News: Former Heilongjiang Organization Department chief Wang Aiwen (王爱文) was transferred to Ministry of Civil Affairs (MCA) today as Vice Minister. Quick Take: Wang started his political career in 1987 in the then-Ministry of Labor, which was replaced by and integrated into the Ministry of Human Resources and Social Security (MHRSS) in 1998. During his 18-year service, Wang was mainly in charge of employment-related matters. He was transferred to Heilongjiang in 2005, and had then been promoted within the province, and became the provincial Organization Department head in 2016. During his term in Heilongjiang, Wang has been widely praised for his capacity—especially his political performance in Yichun, where the city saw a GDP growth of almost 10% every year while he was serving as Party Secretary from 2011 to 2015. Now that he is appointed back to the central government, his role in MCA remains to be seen.

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Hunan sees a reshuffle on its CCPSC

Earlier in May 2019, Hunan CCPSC member and CCP Committee Secretary-General Xie Jianhui (谢建辉) was appointed Hunan Executive Vice Governor. Her old post has been taken by Hunan CCPSC member and Hunan SASAC Party Secretary Zhang Jianfei (张剑飞). A Hunan native, Zhang Jianfei was initially promoted onto vice-provincial level in November 2013 as Hunan Vice Governor, and then took concurrent appointment as Hunan SASAC Party Secretary, a position that only has full-departmental ranking, in July 2017. Zhang was promoted into Hunan CCPSC in December 2017, and gave up his vice governorship one month later in January 2018, only keeping the Hunan SASAC Party Secretary position. In such way, Zhang is the only provincial CCPSC member nationwide that takes the concurrent appointment as provincial SASAC Party Secretary. It is possible that the leadership of Hunan really valued SASAC work, but it is still highly unprecedented to have a provincial CCPSC member supervising SASAC. Now that Zhang has taken the position of Hunan CCP Committee Secretary-General, we expect him to give up the Hunan SASAC Party Secretary position in the very near future.

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Personnel reshuffling continues in Guangdong

News: Former Shantou Party Secretary Fang Lixu (方利旭) was appointed head of China Council for the Promotion of International Trade (CCPIT) Guangdong Committee (广东贸促会) today, replacing Lin Tao (林涛), who was promoted to Heyuan Mayor. Fang’s successor is Ma Wentian (马文田), former Guangzhou Vice Mayor. Quick Take: As we observed, there has been a notable wave of personnel reshuffling in the Teoswa region in Guangdong recently, following the latest ones on 8 May. CCPIT is a provincial foreign trade promotion organization, with main responsibilities to promote Guangdong’s cross-border economic cooperation and further the internationalization of local businesses. CCPIT has previously played an important role particularly with trade and matters concerning HK and Macau. More importantly, Fang is the first departmental-level ranked official to be appointed to the post—his predecessor Lin Tao was only ranked vice departmental-level as Shanwei CCPSC member and Propaganda Department Chairman before being transferred to CCPIT. This means that CCPIT is going to play a bigger role in the region, most likely to better assist the rapid development of the GBA.

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Former Yunnan Party Secretary Qin Guangrong (秦光荣) surrendered himself to the Central Commission for Discipline Inspection (CCDI)

Qin is the eighth provincial party secretary ousted since the beginning of Xi’s anti-corruption campaign, and the second Yunnan Party Secretary ousted. Qin’s predecessor as Yunnan Party Secretary, Bai Enpei (白恩培), was ousted on 29 August 2014 and was sentenced for death penalty with two-year reprieve. When the sentence was automatically reduced at the end of the two-year term, Bai was sentenced to life imprisonment without commutation or parole. Qin’s voluntary surrender to CCDI is a result of the investigation of CCDI against his son Qin Ling (秦岭) that was launched weeks ago. Qin Ling was a senior manager of China Huarong Asset Management Co. Ltd., where former Board Chairman Lai Xiaomin (赖小民) is being prosecuted for accepting bribes, corruption, and bigamy. Under Lai, Qin Ling served as Board Chairman of Huarong Investment Stock Co. Ltd. (02277.HK), a Hong Kong-listed subsidiary of Huarong Asset Management. According to two sources in Beijing, Qin Ling leveraged his father’s connection to help arrange meetings between already-ousted Politburo member and Chongqing Party Secretary Sun Zhengcai (孙政才) and Lai Xiaomin, who aspired to utilize his SOE experience and take senior government/party positions before being ousted. Xi has been very sensitive to local leaders colluding with each other—especially as Chongqing and Yunnan are neighboring provinces—any collusion by local leaders would potentially pose threat to regime stability and central government’s firm grasp of local politics. Other than Qin and Bai, ousted provincial party secretaries include aforementioned former Chongqing Party Secretary Sun Zhengcai, former Hebei Party Secretary Zhou Benshun (周本顺), former Liaoning Party Secretary Wang Min (王珉), former Tianjin Party Secretary Huang Xingguo (黄兴国), former Gansu Party Secretary Wang Sanyun (王三运), and former Shaanxi Party Secretary Zhao Zhengyong (赵正永). In Yunnan, five other vice-provincial officials have been ousted since the beginning of Xi’s anti-corruption campaign, including former Yunnan Vice Party Secretary Qiu He (仇和), former Yunnan CCPSC member and Kunming Party Secretary (张田欣), former Yunnan CCPSC member and CCP Committee Secretary-General Cao Jianfang (曹建方), former Yunnan CCPSC member and Political and Legal Affairs Commission Chairman Meng Sutie (孟苏铁), and former Yunnan Vice Governor Shen Peiping (沈培平)—all of whom had worked under both Bai and Qin, who were Yunnan Party Secretary from 2001 to 2011 and from 2011 to 2014, respectively. Even before Qin’s ouster, Yunnan was one of the provinces where corruption was most prevalent—Qiu He was Zhang Tianxin’s predecessor as Kunming Party Secretary before being promoted to become Yunnan Vice Party Secretary, while Zhang’s successor as Kunming Party Secretary Gao Jinsong (高劲松) was also ousted, right after his Kunming Party Secretary appointment when Yunnan CCPSC didn’t even have the chance to appoint Gao into the provincial CCPSC. This pattern, where a number of officials consecutively taking the same position were all found corrupt, is distinctive especially in Yunnan, which means the corruption networks were stronger and more interconnected than those of other provinces. With Qin’s latest ouster, we expect that he will give up more names of his corrupt subordinates during the investigation in exchange for shorter sentence, especially if he himself did not take much bribe other than helping his banker son politically. This means that more disruption should be expected in local officialdom of Yunnan, which is still recovering from massive ousters caused by the investigation of Bai Enpei and Qiu He, former no.1 and no.3 of the province. Notably, Qin was a senior leader of Communist Youth League (CYL) in Hunan in the early stage of his career, and was very well-liked by Ling Jihua (令计划) and Li Yuanchao (李源潮), chief of staff and HR manager to Hu Jintao, respectively. The ouster of Qin Guangrong also increases the chance of ouster of former Jiangsu Party Secretary Luo Zhijun (罗志军), who was Li Yuanchao’s close associate in Jiangsu and another senior figure of CYL.

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