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China said to mull options to extend finance chief Lou's term
[BEIJING] China's leadership is considering ways to keep Finance Minister Lou Jiwei in office beyond retirement age so he can retain his top role in restructuring local government debt, said a person familiar with the talks.
Options include giving Mr Lou a position with the legislature's advisory body so he can stay on past December when he turns 65, the retirement age for ministerial-level officials, according to the person. The government took similar action two years ago so that People's Bank of China Governor Zhou Xiaochuan, now 67, could remain in office. No decision has been made on the matter, the person said.
At stake is China's bid to manage an economic slowdown and avert a crisis in debts run up by local authorities during a record credit boom unleashed in 2009 during the global recession. Lou has overseen efforts to rein in lending and give local governments an officially sanctioned channel for raising money, after provinces and cities took on trillions of yuan of debt through opaque financing vehicles.
Local government fundraising helped liabilities jump 67 per cent from the end of 2010 to 17.9 trillion yuan (US$2.9 trillion) as of June 2013, according to data compiled by the National Audit Office. The liabilities may have reached 25 trillion yuan, bigger than the size of the German economy, according to estimates from Mizuho Securities Asia.
At a press conference March 6, Mr Lou said his ministry has ideas to solve the local-government debt problem. "We will open the front door and close the back door, and at the same time, we will prevent systematic risks from materializing," he said.
China's finance ministry didn't immediately respond to a faxed request for comment about the matter.
Keeping Mr Lou in office would allow him to work longer with PBOC governor Zhou, who avoided retirement in 2013 thanks to his appointment as vice-chairman of the Chinese People's Political Consultative Conference, which advise the National People's Congress legislature. That post qualified him as a state leader, pushing his retirement age back to 70.
As the economy slows, the central leadership wants fiscal policy to remain stable, the person said. Mr Lou and Mr Zhou are friends who worked under former premier Zhu Rongji, and the leadership believes their relationship will help them work closely together during the slowdown, the person said.
Mr Lou is likely to get the same promotion as Mr Zhou to become a CPPCC vice chairman, the person said. Another option is for Mr Lou to be named a state councilor, a position that would see him work with Premier Li Keqiang and China's vice premiers, the person said.
Before taking the ministry job in 2013, Mr Lou was chairman of China Investment, the country's sovereign wealth fund. Mr Lou's predecessor as finance minister, Xie Xuren, held the post from 2007 to 2013.
A final decision hasn't been made because promoting Mr Lou may be seen as unfair by other ministerial officials, according to the person, who asked not to be named because the discussions are private.