https://orcid.org/0009-0009-6494-2180
ABSTRACT
Since the 18th National Party Congress, many high-ranking business executives and regulators from China’s financial system have been appointed as the so-called ‘airlifted’ vice-provincial governors in financial affairs. This article presents a systematic biographic profile of this group of rising technocrats. It argues that in appointing these central financial elites to provinces, the Party centre has used the cadre personnel management system to promote governance capability building through technocratic professionalization of local administrative leadership, and drive the recentralization of financial governance as Chinese political economy overall shifts towards prioritizing risk management, systemic stability and national security. It also constitutes a venue for cadre grooming. Moreover, this personnel control via airlifting technocratic appointments has often been prompted, and also constrained, by a short-term crisis management imperative to deal with local financial turbulence and restore market stability.
Introduction
Since the 18th National Congress of the Communist Party of China (CCP) in 2012, many high-ranking regulators and business executives from the apex of China’s financial functional system—central financial regulatory authorities and large state-owned financial institutions—have been appointed to over half of China’s provincial administrations as the ‘airlifted’Footnote1 vice-provincial governors in financial affairs (空降金融副省长). This became particularly common during the run-up to the 19th Party Congress.Footnote2 Typically, they also serve as members of the Party Group of provincial government and not infrequently Provincial Party Standing Committees (PPSCs). The rise of these financial technocratic elites is shaped by the Party’s nomenklatura and cadre personnel management system. On behalf of the central leadership, the Central Organization Department manages the selection, appointment, transfer, and dismissal of vice-provincial-rank officials and chief leaders of central SOEs and financial institutions as ‘centrally managed cadres’.Footnote3
Such cadre rotations from the central to local levels and the financial functional system to the administrative bureaucracy is not new, but they used to occur sporadically, as shown in the earlier cases of Wang Qishan (王岐山), Li Lihui (李礼辉), Jiang Chaoliang (蒋超良) and Dai Xianglong (戴相龙) around the turn of the century. There were also programs in the Hu-Wen era that, at a lower-level, appointed central financial cadres as ‘airlifted vice-prefectural mayors in financial affairs’ in several provinces. The frequency, scale and political significance of this policy practice, however, has substantially increased during recent years. Some of the airlifted vice-provincial governors in financial affairs have become rising stars in China’s political system and made their way into the 20th Central Committee.Footnote4 How to characterize this group of senior financial-political elites? What explains such intensified central efforts in personnel management? And what roles have they played in China’s financial governance in the context of central–local relations?
Based on manually collected qualitative data, this article presents a systematic biographic profile of the airlifted vice-provincial governors in financial affairs, as a distinct group of rising technocrats that remains understudied. It argues that in appointing these central financial elites to provinces, the Party centre has mobilized the cadre personnel management system to promote governance capability building through technocratic professionalization of local administrative leadership, and drive the recentralization of financial governance as Chinese political economy overall shifts towards prioritizing risk management, systemic stability and national security. With their professional expertise, resources and connections in the financial system, the airlifted financial technocrats are mandated as ‘central envoys’ and ‘local outsiders’ to promote, regulate and discipline local financial development within the policy parameters redrawn by the central authorities and under stronger top-down political supervision. This tilts the central–local power dynamics in financial governance towards recentralization, and paves the way for recent formal institutional reforms. This also provides a venue for cadre grooming. Moreover, this personnel control via airlifting technocratic appointments has often been prompted, and also constrained, by a short-term crisis management imperative to tackle local financial turbulence and restore market stability. While the Party’s personnel management constitutes an important instrument to reassert central control, it is unlikely the panacea to consolidate China’s financial governance.
This article contributes to the literature on CCP’s cadre personnel management system by extending studies on the career and political mobility of China’s state-business and especially financial elites. While existing studies on China’s provincial political elites focus on ‘first-hand’ (一把手) chief leaders, it looks at vice-governors with specialized supervision responsibilities. It also engages with the scholarship on China’s central–local relations and financial system, by examining the recent recentralization of financial governance, which remains under-researched despite recognition of the overall recentralization drive under Xi Jinping. It argues that the Party’s cadre personnel management has played an important role in recentralizing financial governance, paving the way for the latest institutional reforms, including, at the central level, the reorganization of the financial regulatory architecture under the State Council and the reestablishment of ‘Central Financial Work Committee’ (CFWC) under the Central Committee following the 20th Party Congress.
The rest of this article is organized as follows. The next two sections review CCP’s cadre rotation and personnel management system in the broader contexts of central–local and state–business relations, and the political economy of China’s financial governance. The fourth part presents a biographic study of the airlifted vice-provincial governors in financial affairs on their backgrounds and appointment patterns. It is followed by a discussion of their institutional roles and mandates as the ‘airlifted envoys’ in financial governance. The final section concludes.
CCP’s Cadre Rotation and Personnel Management System
The nomenklatura and cadre personnel management system serves as one of the ‘ultimate trump cards’ of the Party centre to contain centrifugal forces, restructure central–local power dynamics and govern the evolving national political economy,Footnote5 albeit with its own limitations.Footnote6 Notably, cadre rotations constitute an instrument of personnel control to reduce elite power entrenchment, corruption, departmentalism and parochialism, enforce central-/upper-level policy preferences, and strengthen top-down supervision.Footnote7 This features most saliently in vertical rotations across the administrative hierarchy from the higher to lower levels. The Party centre has strategically mobilized airlifted cadres, who are believed to be predisposed to more ‘encompassing interests’ and greater policy compliance due to long-term political socialization and careerist interests, to achieve important policy goals and maintain political macroeconomic stability.Footnote8 Cadres from provincial departments are similarly often appointed to prefectural chief leadership as the ‘eyes and ears’ of the provincial government.Footnote9 Also, cadres on ‘temporary transferred duties’ (挂职), mostly from the higher to lower levels, usually become agents of their upper-level dispatching units.Footnote10
Besides this ‘control’ logic, some also see an ‘empowerment’ logic for cadre rotations, as policy rationales can include regional development, policy implementation or diffusion through resource and knowledge transfer, as well as cadre grooming and evaluation.Footnote11 Nevertheless, rotations may be ineffective to institutional collusion and even lead to the lack of local expertise, reduced accountability and short-termist obsessions with visible political achievements, policy uncertainty and inconsistency, and rent-seeking and corruption.Footnote12 The extant Chinese scholarship finds only mixed governance outcomes of cadre rotations and airlifted chief local leaders.Footnote13
Moreover, a growing literature analyzes the cadre rotations across the SOEs sector and the administrative bureaucracy, seeing the dense personnel network as a leverage for governance.Footnote14 For example, Lin and Milhaupt conceptualize SOE-bureaucracy personnel interlinkages as ‘institutional bridges’ in the ‘networked hierarchy’ of China’s industrial organization system.Footnote15 Many recognize the dual-identities of Chinese SOE leaders as both professional executives and party-state cadres with informal bureaucratic ranks. Transfers to party-state organs have become a common pathway to political promotion for state-business elites, who have emerged in the past two decades as a substantial political force in China (with Central Committee representation).Footnote16
Scholars have observed intensified personnel management efforts in the ‘New Era’ under Xi’s leadership to consolidate central control. The ‘vertical leadership/management system’ over the control of personnel and budgets has been implemented to replace the ‘dual-reporting system’, which fuels tensions and centrifugal tendencies within interlocked ‘tiao’ (vertical) and ‘kuai’ (horizontal) authority relationships, in major functional systems including environmental protection,Footnote17 the judiciary,Footnote18 and CCP’s disciplinary apparatus,Footnote19 to promote vertical integration and upward accountability, albeit with mixed outcomes. Meanwhile, there have been extensive personnel reshufflings of both provincial leadership (with more SOE-executive-turned-officials and non-local ‘outsiders’ in PPSCs)Footnote20 and central SOEsFootnote21 during recent years.
However, there is still scant scholarship on the rotations of China’s financial elites and the implications for Chinese political economy. Only a few works reveal that they enjoy substantial career mobility within the financial system and to party-state organs.Footnote22 Recent studies indicate positive governance effects of local leaders with financial career backgrounds in mitigating the COVID-19 shock on local firm growthFootnote23 and the accumulation of implicit local government debt.Footnote24 Yet, little ink has been shed on the airlifted vice-provincial governors in financial affairs specifically.Footnote25 While the overall recentralization drive in the past decade and its manifestations in some policy arenas have been well-documented, the new central–local dynamics in financial governance remain under-researched. This article fills such research gaps by a systematic examination of this distinct group of rising technocrats and its implications for China’s financial governance and central–local relations.
Political Economy of China’s Financial Governance
China’s financial development has been an intertwined market- and state-building process that is deeply embedded within Chinese political economy, such that institutional reforms in China’s financial system cater to not only the liberal market-oriented logic of growth and accumulation, but also the statist logics of national development, stability maintenance, and consolidation of CCP’s ruling capacity and legitimacy.Footnote26 The Chinese party-state mobilizes various governance instruments—such as administrative-regulatory policymaking and supervision, cadre personnel management,Footnote27 disciplinary rectification, and exercise of ownership rights of financial assetsFootnote28 – to reset the underlying objectives and parameters of financial development.Footnote29 Yet the intrinsic ambiguity, tension and volatility stemming from logic multiplicity and shifting policy priorities in China’s financial governance may also generate endogenous regulatory dilemmas and market turbulence.Footnote30 During episodic bursts of financial pathologies, the short-term crisis management imperative of market re-stabilization tends to dominate, often at the expense of long-term regulatory credibility and market efficiency.
While some analyze China’s financial governance through the lens of elite competition,Footnote31 others emphasize central–local power dynamics in the context of a multi-layered bureaucracy.Footnote32 Scholars examined the earlier round of financial recentralization under Zhu Rongji in the late-1990s, including the establishment of CFWC to enhance and centralize personnel control over financial regulatory authorities and major state-owned financial institutions under the ‘vertical leadership system’, with mixed outcomes though.Footnote33 For example, Heilmann observed ‘a trend towards a reaffirmation of local control in financial business’ since the early-2000s, after the establishment of various ‘finance work offices/committees’ (金融工作办公室/委员会) as local party-state apparatus neither subordinate to nor coordinated with the central financial regulatory bureaucracies and their local branches.Footnote34
There are only limited studies on the central–local power dynamics in financial governance under Xi. Naughton saw the initial signs for a major overhaul in financial regulation towards stronger control during the run-up to the 19th Party Congress.Footnote35 Li and co-authors discussed the reorientation of stock market governance after the 2015 meltdown, and top-level organizational integration of the financial regulatory bureaucracy.Footnote36 Some pointed to the clampdown of online peer-to-peer (P2P) lending platforms, as a case for a financial governance pendulum swinging from pro-innovation decentralization with lax regulation towards pro-stability recentralization under strong political control.Footnote37 Others observed a more centralized, hierarchical quota system in the burgeoning local government bond market under the 2014 revised Budget Law, whereby the Ministry of Finance and provincial governments both obtain larger control over local debt, albeit partially successfully at best.Footnote38 This article shows how the Party centre has mobilized the personnel management system over provincial leadership, to recentralize financial governance since around 2015–17, which also facilitates concurrent institutional and organizational reforms towards recentralization and stronger control.
A Biographic Profile
Following the biographic approach to studying Chinese political elites,Footnote39 we have constructed an original dataset of ‘airlifted vice-provincial governors in financial affairs’ through extensive information search and cross-checks on provincial government gazettes accessed via the CNKI database, government and corporate websites, and official media outlets (see ).Footnote40 To the best of our information, we identified 31 airlifted technocrats with financial work histories at the central level who served or are serving as the vice-governors in financial affairs under Xi’s administration. This section presents a biographic profile of these airlifted financial technocrats, including their age and educational backgrounds, institutional origins and career trajectories, and specific appointment patterns.
Table 1. Airlifted Vice-Provincial Governors in Financial Affairs under Xi’s Administration
Age and Education
Age and educational qualifications have been crucial institutionalized determinants of political mobility in the reform-era since Deng Xiaoping articulated the ‘four modernizations’ (sihua 四化) of CCP’s leadership corps. The airlifted vice-provincial governors in financial affairs were typically born during the mid-1960s to early-1970s, as the 6th–7th generation of Chinese political elites, and around 51-years-old by their respective airlifting appointments. They have relatively high educational attainments: Twenty-two of them (70%) have earned PhD degrees, while Wang Jiang and Ma Xin finished their post-Docs. Almost all of them have degrees in economics, finance and/or accounting, with a few in engineering. Some earned their graduate degrees on a part-time basis during job tenures, a common detour to bypass the dilemma of age limits on the step-by-step promotion ladder.Footnote41
Notably, the political representation of elite university graduates and Central Party School (CPS) trainees is salient. Many are alumni of Tsinghua (7), including PBC School of Finance, Renmin (7), or Peking (3) university, and Shanghai University of Finance and Economics (4). Thirteen of them have attended CPS cadre training programs. The Party School system, centred at CPS, provides an opportunity for Party-sponsored upward mobility and an institutionalized venue where aspiring cadres immerse themselves in official ideology and policies, pursue extra educational credentials and nurture cadre networks.
Institutional Origins and Career Trajectories
Around one-third of these airlifted financial technocrats developed their professional careers in financial regulatory authorities, with the others from central state-owned financial institutions. Most of the former financial regulators originated from the PBOC and the CSRC. Some of them had been transferred to other central organs or local governments before the appointments to vice-provincial governorship in financial affairs. For example, Tong Daochi and Li Bo had been rotated from CSRC and PBOC to MoF and ACFROC, respectively, for one-year-or-two before the airlifting appointments. Wu Qing and Ouyang Weimin had been airlifted earlier in 2010–11 from CSRC and PBOC to prefectural/departmental-rank administrative leadership positions in Shanghai (district head) and Guangzhou (vice-mayor), respectively, before being promoted to vice-provincial governorship around the 19th Party Congress. Zhang Yanyun was airlifted from CIRC to Zhejiang as the head of provincial government ‘finance work office’ (later reorganized as the Provincial Bureau of Local Financial Supervision and Administration 省地方金融监督管理局) in mid-2016 and appointed as the vice-provincial governor in financial affairs in late-2022.
On the other hand, those former financial business executives are typically ‘loyal veterans’ with working experience of over two decades in a single large state-owned financial institution, often climbing from the rank-and-file all the way to senior management. Most of them had also been horizontally rotated away from their long-serving ‘danwei’ to transitional leadership posts in another institution, before being airlifted to provinces. Such executive swaps constitute both a training opportunity to obtain further industry knowledge, resources and networks, and an evaluation and selection process for future promotion. For example, Li Yunze and Kang Yi had devoted most of their professional careers to CCB until 2016, when they were rotated to ICBC and ABC, respectively, as vice-president. They were appointed as the vice-provincial governor in financial affairs of Sichuan and Tianjin two years later.
Moreover, fourteen of them have had substantial international exposure through overseas education, working experience, or short-term professional trainings. For example, Li Bo earned his PhD from Stanford and JD from Harvard, and served as a professional lawyer in New York and Hong Kong, before launching a successful career as a senior central banker during 2004–18. Li headed the legal bureau and later the monetary policy bureau of PBOC and contributed to China’s banking reforms, macroprudential regulation, RMB internationalization and anti-money laundering.
Appointment Patterns
Leadership Positions and Rank-Based Promotion
In such airlifting appointments, the most common leadership position offered is vice-governorFootnote42 and member of the Party group of a provincial administration. Fourteen of them obtained PPSC membership as vice-provincial governors in financial affairs,Footnote43 among whom eight also became the first-among-equal ‘executive (常务) vice-governor’. The PPSC membership and executive vice-governorship not only signify the heavy political weights attached to these airlifted cadres as individual politicians and to financial affairs as a key policy area, but also further boost their authority within the regional political economic establishments.
Through airlifting appointment, 80% of the financial technocrats gained a bureaucratic rank-based political promotion, usually from the prefectural/departmental/central-bureau rank to the vice-provincial/ministerial rank. Such a promotion is particularly favorable to the former financial business executives, as the vice-provincial/ministerial rank is typically the ceiling among state-owned financial institutions, which they may not otherwise obtain.
Law of Geographic Avoidance
In 80% of these airlifting appointments, the law of geographic avoidance (地域回避) has been applied, such that the financial technocrats were airlifted to a province that is neither their places of origin, nor where they have education or working experience. This indicates intended organizational efforts of the Party centre to ensure political insulation of its airlifted envoys in financial governance from local vested interests. Scholars observe that the law of avoidance has been increasingly re-institutionalized in the reform-era as an organizational code in the ‘Party Management of Cadres’ system to rule out the ‘localists’ with weaker policy compliance with the upper-levels,Footnote44 while further strengthened under Xi as the centre makes renewed efforts in the pro-outsiders personnel reshuffling of PPSCs.Footnote45
In a few cases though, this personnel control seems to be calibrated by concerns for local expertise, especially in economically important regions, as Bulman and Jaros have noted.Footnote46 For example, the three cadres airlifted earlier into sub-provincial leadership were promoted to vice-governorship in the same provinces: Wu Qing (Shanghai), Ouyang Weimin (Guangdong), and Zhang Yanyun (Zhejiang).
Length of Tenure
With the exceptions of Tu Guangshao (8.5 years) and Zhu Congjiu (11 years), the typical tenure length for airlifted vice-provincial governors in financial affairs has been less than 5 years, often around 2–4 years. This follows a general trend towards shorter tenures and frequent rotations of China’s local officials in the reform era.Footnote47 This could be an intended effort of the Party centre to contain localism and strengthen top-down control, such that the airlifted financial technocrats could preserve their mandated dual-identities as ‘central envoys’ and ‘local outsiders’ against cooptation by local vested interests. But their short time horizon and lack of local expertise may also cast doubt on their governance capabilities.Footnote48 Some may even argue that such short stints in local office serve more as stepping stones in the Party-sponsored upward career mobility for centrally favored financial elites.Footnote49 There seems to be a recent trend towards longer average tenures though, with some cadres including Guo Ningning, Zhang Lilin, and Cai Dong having served for over 4 years by 2023. And as elaborated below, the airlifted technocrats have played important roles in financial governance, but often indeed been constrained by a short-term crisis management imperative.
Further Rotations
Twenty of them experienced further rotations, through two major pathways. One is the transfer back to the financial system. Notably, four have obtained the full-ministerial rank via this pathway, including Tu Guangshao (once president of CIC), Zhu Hexin (once Party secretary and chairman of CITIC Group), Li Yunze (as inaugural Party secretary and chairman of National Financial Supervision and Administration Bureau, NFSAB, 国家金融监督管理局), and Wu Qing (as Party secretary and chairman of CSRC). Zhu, Li, and Wu were elected as alternate members of the 20th Central Committee. Wang Jiang became the executive deputy director of the newly reinstituted CFWC General Office, after successive rotations from Jiangsu to BOC, CCB and China Everbright Group. Others have been appointed to govern major financial institutions under disciplinary rectification: after the fall of Hu Huaibang (胡怀邦), Ouyang Weimin was appointed as deputy Party secretary and president of CDB in late-2019, while Tan Jiong succeeded him in 2023; and Ge Haijiao became the Party secretary and chairman of BOC, upon the Central Disciplinary and Inspection Commission (CDIC)’s investigation into Liu Liange (刘连舸). Through further rotations, these technocrats have become members of the ‘core executives’ of China’s financial governance.
The other pathway is the transfer to other local party-state leadership positions. Those who followed this pathway have all obtained PPSC membership and should be considered as getting political promotion. In particular, Yin Yong obtained the full-provincial/ministerial rank as the deputy Party secretary and mayor of Beijing and a full member of the 20th Central Committee. Before moving back to CSRC in February 2024, Wu Qing served as the deputy Party secretary of Shanghai. Also, after further rotations from Chongqing to CCB and PBOC, Liu Guiping was again airlifted to Tianjin. As an exception, Kang Yi was transferred to the central government as the director of National Bureau of Statistics. Kang, Liu and a few othersFootnote50 who remain in the provinces were also elected as alternate members of the 20th Central Committee. Such promising post-airlifting career prospects further corroborate their prominence as professionally qualified and politically trusted technocrats in both financial and administrative governance.
This suggests that cadre grooming is an alternative governance logic behind such airlifting appointments. Shih mentioned how an authority delegation to key technocrats under Zhu Rongji to solve financial problems, including the airlifting appointment of Wang Qishan to Guangdong, offered them the opportunity to accumulate experience and political capital, while increasing chances for future promotion.Footnote51 Others noted cadre grooming and evaluation as a rationale for rotations.Footnote52 Existing evidence seems to substantiate this analysis, particularly if one considers the current leadership of central financial regulatory authorities: By February 2024, Li Yunze and Wu Qing lead the NFSAB and CSRC, respectively, while Zhu Hexin and Wang Jiang both serve as the first-among-equal deputy in PBOC and CFWC General Office.
In sum, the airlifted vice-provincial governors in financial affairs share some salient career and political credentials. They possess seasoned professional expertise in finance through academic training and extensive working experience. They have some international exposure via overseas education, working experience and professional trainings. They also demonstrate high political reliability as Party cadres, many with CPS experience. In these airlifting appointments, the Party centre has tactfully used both incentives of bureaucratic rank-based promotion and instruments of control, such as the enforcement of geographic avoidance, to better align their career interests, policy outlooks and behaviors, consolidating their institutional mandates as the ‘central envoys’ in China’s financial governance.
Institutional Roles and Mandates As the ‘Airlifted Central Envoys’
Financial Technocracy and Governance Capability Building
As the CCP makes conscious efforts to upgrade its leadership cadre corps to bolster governance capability, the appointment of airlifted vice-provincial governors in financial affairs epitomizes the rise of professionals-turned-politicians with specialized trainings and expertise in the Party-led leadership talent management system. Scholars observed the ‘technocratic turn’ of Chinese political elites during the 1980s-1990s, and its later reversal with career bureaucrats on the rise again.Footnote53 Before these airlifting technocratic appointments, the vice-provincial governorship in financial affairs was typically assumed by locally groomed administrative career bureaucrats—and infrequently airlifted cadres from central bureaucracies or former industrial SOE executives via rotations, but—without much technical know-how in finance. Therefore, staffing this pivotal leadership position by airlifting experts with relevant academic and professional backgrounds in finance signifies a move towards meritocratic technocracy in local financial governance, while promoting bureaucratic professionalization and recentralization in a mutually-strengthening way.
China’s rapid financial development has rendered financial governance a crucial while increasingly complex policy domain, presenting higher requirements for specialized knowledge and technical expertise in the local governing bureaucracy, for either developmental, regulatory, or disciplinary objectives. In appointing airlifted financial technocrats to provinces, the cadre personnel management system appears capable of selecting leaders with specific qualifications and credentials that meet the Party’s changing governance needs. Eaton and Kostka see central–local rotations as ‘a means of shortening vertical administrative hierarchies’ and transferring ‘resources, knowledge and policy support’ to facilitate local implementation.Footnote54 These cadres can leverage their expertise, resources and connections to promote local financial development and regulatory governance capability building within their jurisdictions.
Moreover, they also serve as the ‘critical nodes’ in the Party’s leveraged personnel control and orchestrate similar technocratic talent mobilization programs at the sub-provincial levels,Footnote55 as Guo Shuqing did in his well-publicized financial reform campaign in Shandong. As a central figure in financial regulation and governance under Xi, Guo was airlifted from the CSRC (Party secretary and chairman) to Shandong as deputy Party secretary and governor in 2013. In August, Shandong provincial government promulgated the ‘Opinions’ for financial reforms, articulating the initiatives to introduce financial veterans into prefectural- and county-level administrative leadership and enhance the professional training and capability-building of local leading cadres on financial affairs.Footnote56 Later, a group of mid-career central financial cadres at the division or deputy departmental/central-bureau ranks were airlifted to almost every prefecture in Shandong as the vice-mayors in financial affairs, mainly on the basis of temporary transferred duties for one-to-two years. Likewise, the airlifted vice-provincial governors in financial affairs have also promoted similar programs within their respective jurisdictions, which are still ongoing across the country. For example, Tan Jiong in Guizhou included such programs in various provincial-level financial development plans.Footnote57 After Ding Xiangqun’s post-airlifting transfer to Anhui as a PPSC member and the Organization Department head, ‘airlifted vice-mayors in financial affairs’ have been appointed to many prefectures in that province. This points to the multi-layered dynamics of airlifting technocratic appointments, whereby financial cadres could also be appointed as chief provincial leaders (such as Guo Shuqing) and at lower levels, as vice-prefectural mayors or vice-county/district heads in financial affairs.
Centralizing Financial Governance Through Personnel Control
Financial governance is closely intertwined with central–local power dynamics in China. In the early reform-era, the banking system and the burgeoning non-bank financial institutions (NBFIs), including trust and investment companies, were often captured by local governments to extend preferential credit to locally favored enterprises, softening budget constraints of the local public sector and fueling the accumulation of nonperforming loans (NPLs).Footnote58 While the restructurings since the late-1990s saved China’s banking system from technical bankruptcy, the fiscal and financial recentralization program under Zhu Rongji faced various limitations and inadvertently generated new central–local tensions and fragilities in financial governance.
The ‘grand bargain’ that the central government struck with localities to push through the recentralization program, as explicated by Liu, Oi, and Zhang, has led to the local off-balance-sheet fiscal reliance on local government financing vehicles (LGFVs) and the accumulation of implicit debt, particularly after the 2008 Global Financial Crisis (GFC) and subsequent massive stimulus.Footnote59 The proliferation of local small and medium-sized financial institutions also created mounting challenges in corporate governance and financial stability, especially if captured by local governments, or certain private capital such as the so-called ‘mafia-like business systems’ (e.g. Baoshang Bank by the ‘Tomorrow Group’ 明天系 or Chengdu Rural Commercial Bank by the Anbang Insurance Group 安邦) and property developers (e.g. Shengjing Bank 盛京by the China Evergrande Group 恒大).Footnote60 Local governments have also enthusiastically experimented with financialized instruments to promote local industrial development, such as government-guided investment funds, sometimes with massive resource misallocation and wastes.Footnote61
Meanwhile, continued financial repression and credit rationing towards private small and medium-sized enterprises (SMEs) have fueled a ballooning shadow banking system, often with tacit local government support under the growth imperatives.Footnote62 The fragility of China’s shadow banking system has been increasingly exposed during the past decade, fueling local financial turbulence and risk contagion to the formal banking system and the property sector, such as in Wenzhou and Ordos. Numerous micro-loan, P2P lending, and wealth management companies, registered with and regulated primarily by local governments, turned out to be Ponzi schemes. Deepening mutual dependence between shadow banking and local debt has also become a primary source of systemic financial risks.Footnote63 Overall, there are persistent and growing central–local tensions in China’s financial governance.
It was after the 2015 stock market meltdown and during the run-up to the 19th Congress that Chinese policymakers began to openly and frequently call for more decisive measures to control ‘systemic fiscal and financial risks’ by stronger Party control and recentralization.Footnote64 In April 2017, President Xi emphasized financial security as a key component of ‘national security’ at the 40th collective study session of the 18th Politburo.Footnote65 Later at the 5th National Financial Work Conference (NFWC) in July, he addressed:
We must uphold the Party centre’s unified leadership over financial affairs … Under the premise that financial governance is primarily a central authority (事权), local governments should consolidate their responsibilities in risk mitigation within respective jurisdictions (属地风险处置责任) in line with centrally-enacted rules.Footnote66
A series of measures were taken to strengthen financial regulation that had lagged behind rapid financial innovation, fill regulatory voids, mitigate inter-agency regulatory competition, and tinker central–local relations in financial governance towards centralization.Footnote67 Institutional reorganizations unfolded to change the sector-based financial regulatory architecture of the ‘one bank three commissions (一行三会)’ configuration. At the 2017 NFWC, the Financial Stability and Development Commission (FSDC) was established under the State Council as a top-level coordinator. In March 2018, CBRC and CIRC were merged into a unified regulatory body, the China Banking and Insurance Regulatory Commission (CBIRC). Most recently, the CFWC was re-instituted under the 20th Central Committee to replace FSDC, while the NFSAB was established to replace the CBIRC in March 2023. Many provincial Party committees have also replicated their own Financial Work Committees by 2024, of which the airlifted vice-provincial governors in financial affairs often serve as the secretary.Footnote68 While these institutional restructurings are still ongoing, the trend is towards streamlining the fragmented authority relationships among various financial regulatory bureaucracies and the central and local governments, strengthening recentralization and upward accountability. Policy-wise, numerous regulations were introduced to tackle specific financial pathologies as mentioned. For instance, the ‘New Asset Management Regulations’ were issued in 2017–18 to contain shadow banking, while the P2P industry was ‘comprehensively eliminated’ (全面清退). LGFVs and property developers’ debt financing has also become major targets for regulatory rectification. China’s financial governance pendulum has swung to more stringent regulation, stronger Party control and recentralization, as Chinese political economy shifts towards prioritizing risk management, systemic stability and national security during recent years, in response to perceived challenges both at home and abroad.
In appointing central financial cadres to provinces, the Party centre has mobilized a team of airlifted envoys to facilitate the implementation of these ‘top-level designs’ for strengthening and recentralizing financial governance. This recentralization unfolds in a graduated way, since provinces continue to function as the key middle layer for policy changes within China’s tiao-kuai institutional authority relationships, while vice-provincial governorship in financial affairs constitutes a strategic pivot in the local bureaucratic politics of financial governance. They are the key decisionmakers of major financial issues in respective provincial jurisdictions.Footnote69 They typically supervise the Provincial Bureaus of Local Financial Supervision and Administration (finance work offices) and provincially managed financial institutions, while liaising with and facilitating coordination among regional branches of central financial regulatory authorities and institutions as well as other local financial institutions. They summon regular inter-departmental joint meetings in financial affairs,Footnote70 pay extensive investigative visits (调研), preside over draftings of provincial financial development plans, hold promotional events for investments, financing, and public listing of local enterprises, chair emergency work teams to manage episodic regional financial turbulence, and lead campaigns against corruption and official misconduct in the local financial system in collaboration with the Party’s disciplinary apparatus, as stipulated by the ‘one position, dual duties’ rule (一岗双责).
Occupying such a key leadership position, these airlifted financial cadres are mandated as ‘central envoys’ and ‘local outsiders’ to rein in local vested interests, to promote, regulate and discipline local financial development within the redrawn policy parameters under stronger top-down political supervision, and to safeguard regional market stability against systemic financial risks. They have mobilized their professional expertise and connections in the financial system and at the central level to solicit resources and policy support, which, in turn, has increased the structural dependence of localities on the centre under the rearticulated ‘top-level designs’. In terms of central–local relations, their overarching mandate in financial governance is to ensure, as Li Yunze aptly put when addressing to a cadre meeting of Sichuan Provincial Rural Credit Cooperatives, ‘high political consistency/compliance with the Party centre’.Footnote71
Cheng Li saw the emergence of provincial leaders with central industrial SOE or technical backgrounds since the 19th Congress in 2017 as a move to broaden Xi’s support within the Party leadership, promote centralization by curbing localism, improve local economic administration with their business experience, and stimulate the development of specific industries.Footnote72 There are similar personnel dynamics in the appointments of ‘airlifted’ vice-provincial governors in financial affairs.
Crisis Management: ‘Chief of the Fire Brigade’
The airlifted vice-provincial governors in financial affairs are referred to in the Chinese media as the so-called ‘Chief of the Fire Brigade’ (救火队长), since their appointments have often been triggered by the urgent imperative to deal with bursts of financial pathologies. While the earlier airlifting technocratic appointments under Zhu Rongji (e.g. Wang Qishan to Guangdong and Li Lihui to Hainan) had long followed a crisis-driven mode, Bulman and Jaros found that in general, the centre tends to reassert control during times of perceived crisis via personnel centralization by airlifting appointments to provinces.Footnote73 As shown in the following case studies, they have played decisive roles in managing local financial turbulence and restoring market stability, but also faced substantial constraints under this short-term crisis management logic.
Zhu Congjiu in Zhejiang
Since the GFC, debt defaults and contagion risks through the informal lending networks among private businesses became pervasive in Zhejiang, culminating in the financial crisis of Wenzhou in 2011, with piling-up NPLs, property-sector collapse and local market turbulence. Upon the establishment of ‘Wenzhou Comprehensive Financial Reform Experimentation Area’ in March 2012, Zhu was airlifted from CSRC in May as the architect of local financial reforms.Footnote74 Initial measures introduced by the provincial government included crack-downs on illegal financial dealings and efforts to formalize and legalize part of informal finance, e.g. through an official contract registration system for private lending and daily reporting of average interest rates (the ‘Wenzhou Index’).Footnote75 Such measures helped to restore market stability, but were too piecemeal and thus criticized by some as ‘symbolic reforms’ to ‘legitimately delay’ solutions to the core institutional pathologies: private SMEs’ financing difficulties in the formal financial system.Footnote76 Reforms seemed to have regained momentum in 2014 when the ‘Private Financing Regulations’, passed by the standing committee of Zhejiang Provincial People’s Congress, took effect as the first local financial legislation in China.
The Wenzhou financial reforms ushered in a wave of financial innovation and development led by private entrepreneurs in Zhejiang who piloted the establishment of private banks. Among the first five private banks approved in 2014, MyBank by Alibaba (Hangzhou) and Minshang Bank (Wenzhou)Footnote77 are headquartered in Zhejiang, while Shanghai Huarui Bank and Kincheng Bank of Tianjin have inaugural investors from Wenzhou. Meanwhile, Zhejiang also pioneered the rise of Fintech and the transformation of private lending into Internet finance and especially online P2P lending. However, this ultimately led to another round of local financial turbulence and regulatory clampdown since 2017.Footnote78 Zhu himself was also put under CDIC investigations in May 2023 and expelled from the Party and officialdom in November.
Tan Jiong in Guizhou
Guizhou is particularly illustrative as a case where the imperative of late development co-exists with the mandates to control fiscal and financial risks. During the past decade, Guizhou changed its development trajectory towards public debt-financed urbanization and industrialization, and became China’s most indebted region.Footnote79 Since 2017, macroeconomic deceleration and stricter regulation led to a surge in defaults on LGFVs’ non-standard debt instruments, which are often packaged into trust or bank wealth management products. Against such backgrounds and upon the default of a prefectural-level LGFV in An’shun (安顺) on trust products, Tan was airlifted from ICBC to Guizhou in September 2019.
Tan led a delegation and hosted a Bond Market Investor Symposium (恳谈会) at Shanghai Stock Exchange in October, reassuring bond redemption by LGFVs in Guizhou to boost market confidence.Footnote80 In tackling local debt, Guizhou piloted the ‘balance sheet approach’ that China’s local governments are now eager to emulate. The underlying logic is that the Chinese government and public sector still hold a considerable amount of state assets, despite local indebtedness.Footnote81 At the SSE symposium, Tan pledged to mobilize the Guizhou Provincial State-owned Capital Operations Company to mitigate local debt problems.Footnote82 In December 2019, the Moutai Group, a flagship provincial SOE, announced the transfer of 50.24 million shares (then about 57 billion yuan) of its publicly listed subsidiary Kweichow Moutai to the Guizhou Provincial State-owned Capital Operations Company, for free.Footnote83 This came to be known as the ‘Guizhou-Moutai Model’. Tan’s leadership legacies were further bolstered by the State Council Document No. 2 in 2022, which permitted Guizhou to ‘moderately raise’ new local government debt quotas and LGFVs to renegotiate with financial institutions for debt roll overs and restructurings.Footnote84 Such measures can mitigate local public debt defaults and potential market shocks in the short term, but cannot be expected to address the institutional pathologies of China’s local public finance.Footnote85 Also, such bureaucracy-led market reassurance and ‘balance sheet solutions’ may inadvertently reinforce moral hazards in the implicit government guarantees behind LGFV debts. The accumulation of explicit and implicit local government debt has continued in Guizhou and elsewhere alike. In early-2023, Tan was appointed as the deputy Party secretary, vice-chairman, and president of CDB.
Li Yunze in Sichuan
The case of Li Yunze signifies the scenarios when the airlifting appointment of central financial cadres have been prompted by the corporate governance crisis of local financial institutions. In September 2018, Li was airlifted from ICBC to Sichuan to supervise restructurings of Chengdu Rural Commercial Bank, one of the largest rural banks in China (with total assets of over 700 billion yuan by 2017) and an important affiliate of the Anbang Insurance Group which had been taken over by the CIRC due to illegal financial dealings. Through multiple connected entities, Anbang controlled 55.5% shares of this local rural bank, deposited insurance premiums to expand its balance sheet and engage in regulatory arbitrage, and manipulated it for various lending and investment activities. By mid-2020, Anbang’s shares in this bank were transferred to a group of municipal- and district-level state asset holding and investment companies, while the Chengdu municipal state-owned assets supervision and administration commission became the controlling shareholder.Footnote86 Besides, Li also headed joint work groups at the provincial-level on both the restructuring and consolidation of two troubled city commercial banks of Panzhihua (攀枝花) and Liangshan (凉山) into the first provincial-level state-owned ‘Sichuan Bank’, and the rectifications of Sichuan Trust, which experienced massive product defaults while captured by local ‘mafia-like business systems’ – the Hongda Group (宏达系) and broader networks of the so-called ‘Dazhou Gang’ (达州帮)—which had engaged in property development, extensive connected-party transactions and illegal capital appropriations. In May 2023, Li was promoted as the inaugural Party secretary and chairman of the newly-established NFSAB.
There are several similar cases in other provinces, including the airlifting appointments of Zhang Lilin to Liaoning to supervise the restructuring of the troubled Jinzhou (锦州) Bank and more recently Shengjing Bank in Shenyang after the collapse of Evergrande; Huang Zhiqiang to Inner Mongolia after the regulatory takeover by the PBOC and CBRC of Baoshang Bank in May 2019, which had been captured by the ‘Tomorrow Group’; and Zhang Min to Henan upon the liquidity run of several small-scale village and township banks in late-2022 that spilled over to cause local social instability.
Constraints of the ‘Central Envoys’
While the airlifted vice-provincial governors in financial affairs serve as the ‘central envoys’ to promote local regulatory governance capability building, recentralize financial governance, and tackle regional financial turbulence, they also face substantial constraints, including short time horizons, potential tensions between developmental and regulatory/disciplinary mandates, and a ‘muddling-through’ strategy of problem-solving. For instance, financing difficulties of private SMEs, the pile-up of implicit local government debt, and the expansion of shadow banking to satisfy these funding needs are major structural pathologies of China’s economy and financial system that warrant deeper institutional reforms with a longer-term orientation. Cadre rotations are not the panacea for effective governance and the eradication of institutional collusion among local vested interests.Footnote87 Nor is recentralization in general, as demonstrated in many other policy arenas.Footnote88 In fact, the ‘bureaucracy-business revolving door’ (政商旋转门) may itself become a hotbed for rent-seeking.
Recent years have witnessed several corruption cases involving airlifted financial cadres. Having served as the airlifted vice-provincial governor of Hubei, Tong Daochi was appointed as PPSC member of Hainan and Party secretary of Sanya in late-2018. Later, Tong was put under CDIC investigation in late-2020 and expelled from the Party and officialdom in April 2021, for massive bribe-taking and insider-trading since 2004 during his CSRC leadership and for collusion with private businesses to sabotage centrally mandated rectifications against the Phoenix Island, a notoriously environmentally destructive artificial island for lavish property development in Sanya. In June 2022, Tong was given life sentence with a two-year reprieve. Likewise, Zhu Congjiu ended up in CDIC investigations in May 2023 and was expelled from the Party and officialdom in November, for defiance against major central policies, developing political patronage, massive bribe-taking and various rent-seeking activities that dated back to his leadership in CSRC over public listing approvals, like Tong did. Notably, their misconducts occurred both before and after the airlifting appointments.
Conclusion
This article presents a systematic examination of airlifted vice-provincial governors in financial affairs as a distinct group of rising technocrats in China. We offered a nuanced understanding of the multiplicity of governance logics and a context-specific reading of the relevant personnel management processes. It argues that in appointing these central financial elites to provinces, the Party centre has used the cadre personnel management system to strengthen local regulatory governance capacity, groom professionally qualified and politically trusted cadres, manage local financial crises, and recentralize financial governance, as Chinese political economy shifts towards prioritizing risk management, systemic stability and national security. Persistent and growing central–local tensions in financial governance and episodic bursts of regional financial turbulence created the impetus for the central leadership to consolidate its top-down control over local financial affairs, including through cadre personnel management. The Party centre has used both incentives of bureaucratic promotion and instruments of control to align the career interests, policy outlooks and behaviors of the airlifted cadres. With their professional expertise, resources, and connections in the financial system, they are mandated as the ‘central envoys’ and ‘local outsiders’ to promote, regulate, and discipline local financial development within the policy parameters rearticulated by the ‘top-level designs’ of the centre. This tilts the central–local power dynamics in China’s financial governance towards stronger and more assertive central supervision, paving the way for formal institutional reforms. Some of the airlifted cadres have also obtained the full-ministerial/provincial rank, entered the 20th Central Committee, and become members of the ‘core executives’ of China’s financial governance, including chairing the central financial regulatory authorities.
Our findings seem to revise the perceived trade-off in provincial leadership appointments between central control and responsive regional governance. The airlifted cadres’ technocratic expertise and ability to solicit resources and policy support from the central level differentiate them from their locally sourced/groomed counterparts and give them the potential to strengthen local governance capacity while bolstering central control and raising the structural dependence of localities on the centre. However, the realization of such potential is constrained in practice by the central leadership’s ability to control and discipline these airlifted agents as well as the inherent complexity of financial governance. Moreover, such personnel control via airlifting technocratic appointments has often been prompted, and also constrained, by a short-term crisis management imperative to deal with local financial turbulence and restore market stability. The airlifted vice-provincial governors in financial affairs have faced challenges in terms of delicate balancing acts between the short-term imperative of market re-stabilization and longer-term market-oriented reforms and fiscal/financial discipline against moral hazards, tensions between rectification versus developmental policy objectives, as well as collusion and corruption. Although the Party’s personnel management serves as an important instrument of governance, it is not the panacea to address central–local tensions and pathologies in China’s financial system. In policy areas ranging from shadow banking, local debt, to the property sector, deeper institutional reforms with a long-term orientation are needed.
Going forward, we call for further research on the actual governance performance and outcomes of airlifted financial technocrats, the broader multi-layered dynamics of airlifting technocratic appointments, and their implications for China’s financial governance and inter-governmental relations, especially from a sub-provincial perspective.
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Notes
1 Bo (2002) referred to provincial leaders with political origin in the centre as ‘airlifted’. See Zhiyue Bo, ‘Governing China in the Early 21st Century: Provincial Perspective’, Journal of Chinese Political Science 7(1), (2002), pp. 139.
2 China Newsweek, ‘16省空降“金融副省长”’ [‘Airlifted Vice-Governors in Financial Affairs in 16 Provinces’]. November 4, 2019. accessed March 11, 2021, http://www.inewsweek.cn/politics/2019-11-04/7516.shtml.
3 John P. Burns, ‘Strengthening Central CCP Control of Leadership Selection: the 1990 Nomenklatura’, The China Quarterly 138, (1994), pp. 458–491; Hon S. Chan, ‘Cadre Personnel Management in China: The Nomenklatura System, 1990–1998’, The China Quarterly 179, (2004), pp. 703–734; Kjeld Erik Brødsgaard, ‘Politics and Business Group Formation in China: The Party in Control?’ The China Quarterly 211, (2012), pp. 624–648; Chen Li, ‘Holding “China Inc.” Together: The CCP and the Rise of China’s Yangqi’, The China Quarterly 228, (2016), pp. 927–949, and ‘China’s Central State Corporatism: The Party and the Governance of Centrally Controlled Businesses’, in The Chinese Communist Party in Action: Consolidating Party Rule, ed. Yongnian Zheng and Lance L. P. Gore (Routledge, 2020), pp. 220–239.
4 Cheng Li, ‘Pioneers: Financial Technocrats in the post-1970s Generation’, China & US Focus. May 26, 2022. accessed January 24, 2023, https://www.chinausfocus.com/2022-CPC-congress/pioneers-financial-technocrats-in-the-post-1970s-generation.
5 Burns, ‘Strengthening Central CCP Control’; Yasheng Huang, Inflation and Investment Controls in China: The Political Economy of Central-Local Relations during the Reform Era (Cambridge University Press, 1996); Maria Edin, ‘State Capacity and Local Agent Control in China: CCP Cadre Management from a Township Perspective’, The China Quarterly 173, (2003), pp. 35–52; Chan, ‘Cadre Personnel Management’; Pierre Landry, Decentralized Authoritarianism in China: The Communist Party’s Control of Local Elites in the Post-Mao Era (Cambridge University Press, 2008); Yongnian Zheng, The Chinese Communist Party as Organizational Emperor: Culture, Reproduction and Transformation (Routledge, 2010); Chenggang Xu, The Fundamental Institutions of China’s Reforms and Development’, Journal of Economic Literature 49(4), (2011), pp. 1076–1151; Xueguang Zhou, The Logic of Governance in China: an Organizational Approach (Cambridge University Press, 2022).
6 Kelvin J. O’Brien and Lianjiang Li, ‘Selective Policy Implementation in Rural China’, Comparative Politics 31(2), (1999), pp. 167–186; Xueguang Zhou, ‘The Institutional Logic of Collusion among Local Governments in China’, Modern China 36(1), (2010), pp. 47–78.
7 Edin, ‘State Capacity’; Sarah Eaton and Genia Kostka, ‘Authoritarian Environmentalism Undermined? Local Leaders’ Time Horizons and Environmental Policy Implementation in China’, The China Quarterly 218, (2014), pp. 359–380; David J. Bulman and Kyle A. Jaros, ‘Localism in Retreat? Central-Provincial Relations in the Xi Jinping Era’, Journal of Contemporary China 30(131), (2021), pp. 697–716; Xinhui Jiang, Sarah Eaton, and Genia Kostka, ‘Provinces in Command: Changes in Prefectural Appointments from Hu Jintao to Xi Jinping (2003–2020)’, Journal of Contemporary China 32(144), (2023), pp. 963–983.
8 Huang, Inflation and Investment Controls.
9 Jiang, Eaton and Kostka, ‘Provinces in Command’.
10 Eaton and Kostka, ‘Authoritarian Environmentalism’; Chien-Wen Kou and Wen-Hsuan Tsai, ‘“Sprinting with Small Steps” Towards Promotion: Solutions for the Age Dilemma in the CCP Cadre Appointment System’, The China Journal 71, (2014), pp. 153–171.
11 Ibid.; Li, ‘China’s Central State Corporatism’; Jiang, Eaton, and Kostka, ‘Provinces in Command’.
12 O’Brien and Li, ‘Selective Policy Implementation’, pp. 175–176; Zhou, ‘The Institutional Logic of Collusion’, pp. 72–73; Eaton and Kostka, ‘Authoritarian Environmentalism’, pp. 372–378.
13 Xianbin Wang and Liangxiong Huang, ‘官员交流与经济发展: 中国情景研究的回顾与展望’ [‘Cadre Rotation and Economic Development: A Review in China’s Context’], 产业经济评论 [Review of Industrial Economics] 6, (2020), pp. 70–85.
14 Nan Lin, ‘Capitalism in China: A Centrally Managed Capitalism (CMC) and Its Future’, Management and Organization Review 7(1), (2011), pp. 63–96; Brødsgaard, ‘Politics and Business Group Formation’; Li-Wen Lin, ‘Reforming China’s State-Owned Enterprises: From Structure to People’, The China Quarterly 229, (2017), pp. 107–129; Li-Wen Lin and Curtis J. Milhaupt, ‘We Are the (National) Champions: Understanding the Mechanisms of State Capitalism in China’, Stanford Law Review 65(4), (2013), pp. 697–759; Chen Li, ‘Holding “China Inc.” Together’, and ‘China’s Central State Corporatism’; Wendy Leutert, ‘The Political Mobility of China’s Central State-Owned Enterprise Leaders’, The China Quarterly 233, (2018), pp. 1–21; Wendy Leutert and Sarah Eaton, ‘Deepening Not Departure: Xi Jinping’s Governance of China’s State-Owned Economy’, The China Quarterly 248, (2021), pp. 200–221.
15 Lin and Milhaupt, ‘We Are the (National) Champions’.
16 See fn. 14.
17 Genia Kostka and Jonas Nahm, ‘Central-Local Relations: Recentralization and Environmental Governance in China’, The China Quarterly 231, (2017), pp. 567–582; Genia Kostka and Chunman Zhang, ‘Tightening the Grip: Environmental Governance under Xi Jinping’, Environmental Politics 27(5), (2018), pp. 769–781; and contributions in these two special issues.
18 Yueduan Wang, ‘“Detaching” Courts from Local Politics? Assessing the Judicial Centralization Reforms in China’, The China Quarterly 246, (2021), pp. 545–564; Yueduan Wang and Sijie Hou, ‘Breaking the Cycle? China’s Attempt to Institutionalize Center-Local Relations’, Journal of Contemporary China 31(138), (2022), pp. 882–897.
19 Ting Gong and Wenyan Tu, ‘Fighting Corruption in China: Trajectory, Dynamics, and Impact’, The China Review 22(2), (2022), pp. 1–19; Wang and Hou, ‘Breaking the Cycle?’.
20 Cheng Li, ‘China’s Communist Party-State: The Structure and Dynamics of Power’, in Politics in China: An Introduction, ed. William A. Joseph (Oxford University Press, 2019), pp. 201–236; Bulman and Jaros, ‘Localism in Retreat?’.
21 Lin, ‘Reforming China’s State-Owned Enterprises’; Leutert, ‘The Political Mobility’; Leutert and Eaton, ‘Deepening Not Departure’.
22 Katharina Pistor, ‘The Governance of China’s Finance’, in Capitalizing China, ed. Joseph P. H. Fan and Randall Morck (University of Chicago Press, 2012), pp. 35–62; Lin, ‘Reforming China’s State-Owned Enterprises’.
23 Shuai Huang, ‘地方官员专业背景在应对新冠疫情冲击中的作用’ [‘Effects of Local Bureaucrats’ Professional Backgrounds in Coping with the COVID-19 Pandemic’], 南方经济 [South China Journal of Economics] 39(8), (2020), pp. 33–48.
24 Jianfa Li, et al., ‘金融官员与地方政府隐性债务风险——来自289个地级市的经验证据’ [‘Financial Bureaucrats and Implicit Local Government Debt Risk: Empirical Evidence from 289 Prefectures’], 南方经济 [South China Journal of Economics] 40(8), (2021), pp. 48–65.
25 Ibid.; Li, ‘Pioneers: Financial Technocrats’.
26 Yingyao Wang, ‘The Rise of the “Shareholding State”: Financialization of Economic Management in China’, Socio-Economic Review 13(3), (2015), pp. 603–625; Julian Gruin, Communists Constructing Capitalism: State, Market and the Party in China’s Financial Reform (Manchester University Press, 2019); Johannes Petry, ‘Financialization with Chinese Characteristics? Exchanges, Control and Capital Markets in Authoritarian Capitalism’, Economy and Society 49(2), (2020), pp. 213–238; Stephen Bell and Hui Feng, Banking on Growth Models: China’s Troubled Pursuit of Financial Reform and Economic Rebalancing (Cornell University Press, 2022); Chen Li, Huanhuan Zheng, and Yunbo Liu, ‘The Hybrid Regulatory Regime in Turbulent Times: The Role of the State in China’s Stock Market Crisis in 2015–2016’, Regulation & Governance 16(2), (2022), pp. 392–408; Chen Li and Huanhuan Zheng, ‘Boom and Bust, Chinese Style: Multi-Task Regulatory Dilemma and China’s Stock Market Crisis in 2015’, Competition & Change 27(1), (2023), pp. 94–114.
27 Sebastian Heilmann, ‘Regulatory Innovation by Leninist Means: Communist Party Supervision in China’s Financial Industry’, The China Quarterly 181, (2005), pp. 1–21; Pistor, ‘The Governance of China’s Finance’.
28 Wang, ‘The Rise of the “Shareholding State”’.
29 Jing Wang, ‘“The Party Must Strengthen Its Leadership in Finance!”: Digital Technologies and Financial Governance in China’s Fintech Development’, The China Quarterly 247, (2021), pp. 773–792; Li, Zheng and Liu, ‘Hybrid Regulatory Regime’; Li and Zheng, ‘Boom and Bust’.
30 Li, Zheng, and Liu, ‘Hybrid Regulatory Regime’; Li and Zheng, ‘Boom and Bust’.
31 Victor Shih, ‘Dealing with Non-Performing Loans: Political Constraints and Financial Policies in China’, The China Quarterly 180, (2004), pp. 922–944; Factions and Finance in China: Elite Conflict and Inflation (Cambridge University Press, 2008).
32 Sebastian Heilmann, ‘Regulatory Innovation by Leninist Means’, and ‘Policy-making and Political Supervision in Shanghai’s Financial Industry’, Journal of Contemporary China 14(45), (2005), pp. 643–668; Adam Y. Liu, Jean C. Oi, and Yi Zhang, ‘China’s Local Government Debt: The Grand Bargain’, The China Journal 87(1), (2022), pp. 40–71; Jinglin Xiang, Xuanyu Ouyang, and Yun Ai, ‘金融治理波动的过程和机制’ [‘Process and Mechanism of Financial Governance Oscillation’], 社会学研究 [Sociological Studies] 37(1), (2022), pp. 112–135; Adam Y. Liu, ‘Beijing’s Banking Balloon: China’s Core Economic Challenge in the New Era’, The Washington Quarterly 46(2), (2023), pp. 69–86.
33 Shih, ‘Dealing with Non-Performing Loans’, and Factions and Finance; Heilmann, ‘Regulatory Innovation by Leninist Means’; Carl E. Walter and Fraser J. T. Howie, Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise (Wiley, 2012); Gruin, Communists Constructing Capitalism; Bell and Feng, Banking on Growth Models.
34 Heilmann, ‘Policy-making and Political Supervision’.
35 Barry Naughton, ‘The Regulatory Storm: A Surprising Turn in Financial Policy’, China Leadership Monitor 53, (2017), pp. 1–12.
36 See fn. 30.
37 Wang, ‘“The Party Must Strengthen Its Leadership”’; Xiang, Ouyang, and Ai, ‘Process and Mechanism’.
38 Zhenfa Li, Fulong Wu, and Fangzhu Zhang, ‘The Political Economy of China’s Local Debt’, The China Quarterly 257, (2024), pp. 100–118.
39 Bo, ‘Governing China’; Li, ‘China’s Communist Party-State’; Lin, ‘Reforming China’s State-Owned Enterprises’; Leutert, ‘The Political Mobility’; Bulman and Jaros, ‘Localism in Retreat?’.
40 Given the partial data availability, when official documentation of a designated vice-governor in financial affairs is lacking, we consulted relevant official news reports.
41 Kou and Tsai, ‘“Sprinting with Small Steps”’.
42 Equivalently, this could be vice-mayors of centrally-managed metropolises or vice-chairmen of provincial-level ethnic minority autonomous regions.
43 Six more also obtained PPSC membership, but only after further rotations.
44 Huang, Inflation and Investment Controls; Eaton and Kostka, ‘Authoritarian Environmentalism’.
45 Bulman and Jaros, ‘Localism in Retreat?’.
46 David J. Bulman and Kyle A. Jaros, ‘Loyalists, Localists, and Legibility: The Calibrated Control of Provincial Leadership Teams in China’, Politics & Society 48(2), (2020), pp. 199–234.
47 Landry, ‘Decentralized Authoritarianism’; Eaton and Kostka, ‘Authoritarian Environmentalism’; Bulman and Jaros, ‘Localism in Retreat?’; Jiang, Eaton, and Kostka, ‘Provinces in Command’.
48 Eaton and Kostka, ‘Authoritarian Environmentalism’.
49 For rotations as cadre grooming, see fn. 10–11.
50 Others include Ding Xiangqun, Liu Qiang, Guo Ningning, Huang Zhiqiang, and Cai Yunge.
51 Shih, ‘Dealing with Non-Performing Loans’, pp. 930.
52 See fn. 10–11.
53 Li, ‘China’s Communist Party-State’, pp. 217–218.
54 Eaton and Kostka, ‘Authoritarian Environmentalism’.
55 For ‘leveraged personnel control’, see Li, ‘Holding “China Inc.” Together’.
56 Shandong Provincial People’s Government, ‘关于加快全省金融改革发展的若干意见’ [Several Opinions on Accelerating Financial Reforms and Development in Shandong]. August 12, 2013. accessed September 16, 2021, http://www.shandong.gov.cn/art/2013/8/12/art_2267_19413.html.
57 See, e.g. Guizhou Provincial Bureau of Local Financial Supervision and Administration, and Provincial DRC, ‘贵州省“十四五”金融改革发展规划’ [Guizhou Provincial Fourteenth Five-Year Plan for Financial Reform and Development]. December 31, 2021. accessed September 12, 2022, http://jr.guizhou.gov.cn/zwgk/zdlygk/ghjh/202201/t20220114_72317129.html; Guizhou Provincial Government Financial Work Deliberation and Coordination Office, ‘贵州省2022年金融服务创新年活动方案 贵州省2022年金融队伍建设年活动方案’ [Action Plans for Financial Service Innovation and Financial Work Team Building in Guizhou in 2022]. March 31, 2022. accessed September 12, 2022, http://www.guizhou.gov.cn/zwgk/zdlygk/jjgzlfz/dfjr/xdfwgl/202204/t20220406_73245425.html.
58 Huang, Inflation and Investment Controls; Shih, ‘Dealing with Non-Performing Loans’, Factions and Finance; Heilmann, ‘Regulatory Innovation by Leninist Means’; Walter and Fraser, Red Capitalism; Gruin, Communists Constructing Capitalism; Bell and Feng, Banking on Growth Models.
59 Liu, Oi, and Zhang, ‘China’s Local Government Debt’; Liu, ‘Beijing’s Banking Balloon’.
60 Meg Rithmire and Hao Chen, ‘The Emergence of Mafia-like Business Systems in China’, The China Quarterly 249, (2021), pp. 139–159; Liu, ‘Beijing’s Banking Balloon’.
61 Fenghua Pan, Fangzhu Zhang, and Fulong Wu, ‘State-led Financialization in China: The Case of the Government-guided Investment Fund’, The China Quarterly 247, (2021), pp. 749–772.
62 Kellee S. Tsai, Back-Alley Banking: Private Entrepreneurs in China (Cornell University Press, 2002), and ‘The Political Economy of State Capitalism and Shadow Banking in China’, Issues & Studies 51(1), (2015), pp. 55–97.
63 Zhuo Chen, Zhiguo He, and Chun Liu, ‘The Financing of Local Government in China: Stimulus Loan Wanes and Shadow Banking Waxes’, Journal of Financial Economics 137, (2020), pp. 42–71; Shidai Zhang and Kellee S. Tsai, ‘“One System, Two Shadows”: A Local Public Finance Perspective on China’s Shadow Banking System’, China Economic Review, (2024), 102209.
64 Naughton, ‘Regulatory Storm’; Bell and Feng, Banking on Growth Models; Liu, Oi, and Zhang, ‘China’s Local Government Debt’.
65 PRC Central Government, ‘习近平主持中共中央政治局第四十次集体学习’ [Xi Jinping hosts the Politburo’s 40th collective study session]. April 26, 2017. accessed March 18, 2022, https://www.gov.cn/xinwen/2017–04/26/content_5189103.htm.
66 PRC Central Government, ‘全国金融工作会议在京召开’ [National Financial Work Conference held in Beijing], July 15, 2017. accessed March 18, 2022, https://www.gov.cn/xinwen/2017–07/15/content_5210774.htm.
67 Gruin, Communists Constructing Capitalism; Wang, ‘“The Party Must Strengthen Its Leadership”’; Bell and Feng, Banking on Growth Models; Li, Zheng, and Liu, ‘Hybrid Regulatory Regime’; Xiang, Ouyang, and Ai, ‘Process and Mechanism’; Li and Zheng, ‘Boom and Bust’.
68 Liu Guiping serves concurrently as the Secretary of Tianjin’s Municipal Financial Work Committee, as are Wu Wei, Zhang Lilin, Huang Zhiqiang, Zhang Xin, Ma Xin, Chen Huaiyu, and Zhang Min in their respective provincial administrations.
69 Heilmann, ‘Policy-making and Political Supervision’.
70 Ibid.
71 Sichuan Rural Credit, ‘省农信联社召开干部大会’ [‘Provincial Rural Credit Cooperatives Hosts Cadre Meeting’]. September 30, 2019. accessed July 21, 2023, http://www.scrcu.com/other/zznxxw/20190930/22981.html.
72 Li, ‘China’s Communist Party-State’, pp. 224–225.
73 Bulman and Jaros, ‘Loyalists, Localists, and Legibility’.
74 Shanghai Securities News-cnstock.com, ‘朱从玖与温州金改’ [‘Zhu Congjiu and Wenzhou financial reform’]. October 24, 2013. accessed October 8, 2022, https://news.cnstock.com/news,wzjd-201310–2779368.htm.
75 Xinhua Net, ‘浙江省出台温州金融综合改革试验区12条实施细则’ [‘Zhejiang announces 12 implementation rules on the Wenzhou Comprehensive Financial Reform Experimentation Area’]. November 23, 2012. accessed October 2, 2022, http://www.xinhuanet.com//politics/2012–11/23/c_113784140.htm.
76 Jinghan Zeng, ‘Did Policy Experimentation in China Always Seek Efficiency? A Case Study of Wenzhou Financial Reform in 2012’, Journal of Contemporary China 24(92), (2015), pp. 338–356.
77 On 26th March 2015, Zhu Congjiu addressed to the opening ceremony of Minshang Bank and approved the first credit plan worth of 1 billion yuan to small and medium-sized enterprises.
78 See fn. 37.
79 John A. Donaldson and Xiaotao Yang, ‘Shifting Strategies: The Politics of Radical Change in Provincial Development Policy in China’, The China Quarterly 249, (2022), pp. 139–159.
80 21st Century Business Herald, ‘贵州省召开债券投资人恳谈会’ [‘Guizhou hosts bond investor symposium’]. October 18, 2019. accessed August 25, 2022,
http://www.21jingji.com/article/20191018/herald/7cace961ef29a86520c5ed5c3393a1c5.html.
81 Yang Li and Xiaojing Zhang, China’s National Balance Sheet: Theories, Methods and Risk Assessment (Springer, 2017).
82 21st Century Business Herald, ‘Guizhou hosts bond investor symposium’.
83 Caixin, ‘茅台救贵州? 茅台集团无偿划转570亿元股权 加深城投“信仰”’ [‘Moutai saving Guizhou? Moutai Group transferred shares worth of 57 billion yuan for free, reinforcing market beliefs in LGFVs’]. December 26, 2019. accessed August 25, 2022, https://finance.caixin.com/2019-12-26/101498375.html.
84 State Council, ‘国务院关于支持贵州在新时代西部大开发上闯新路的意见’ [‘Opinions on Supporting Guizhou to Break New Paths in Western Development in the New Era’], January 26, 2022. accessed August 21, 2022, https://www.gov.cn/zhengce/content/2022–01/26/content_5670527.htm.
85 For the ambiguity, tensions, and prioritization of market re-stablization under the multiplicity of logics in China’s financial governance, see fn. 30.
86 See a coverage series by Caixin, ‘重组成都农商行’ [‘Restructuring Chengdu Rural Commercial Bank’]. Various dates, accessed July 27, 2023, https://www.caixin.com/hot/zhongzuchengdunongshangxing.html.
87 See fn. 12.
88 Kostka and Nahm, ‘Central-Local Relations’; Wang, ‘“Detaching” Courts from Local Politics?’.