Caixin
Nov 07, 2016 11:46 AM
SOCIETY & CULTURE

Central Government Appoints New Finance Minister

From right: new finance minister Xiao Jie, new state security minister Chen Wenqing, and new civil affairs minister Huang Shuxian.
From right: new finance minister Xiao Jie, new state security minister Chen Wenqing, and new civil affairs minister Huang Shuxian.

A deputy chief of staff of China's cabinet has been promoted to head of the Finance Ministry, the state-run Xinhua News Service reported Monday, citing the Standing Committee of the National People's Congress (NPC).

Xiao Jie, 59, succeeds Lou Jiwei, whose next move is not clear. 

Xiao broke an age barrier in 2001 when, at 44, he was appointed China's youngest-ever vice minister of finance. Today he's a 23-year veteran of the Ministry of Finance. He has also served as the State Council's deputy chief of staff — the vice secretary-general — since March 2013.

At the State Council, China's cabinet, Xiao oversaw day-to-day operations at the General Office.

Xiao's career included a stint with Hunan province's Communist Party Standing Committee in 2005, when he served as Hunan's vice governor. In 2007, he was named head of the State Administration of Taxation, replacing Xie Xuren.

While in charge of the nation's tax office, Xiao in 2010 wrote an article published in Caixin's China Reform magazine refuting a report by a foreign magazine that claimed China ranked second in the world on the "tax misery index."

Xiao's move to the Finance Ministry from the tax administration position followed precedent, as former Finance Ministers Xiang Huaicheng, Jin Renqing and Xie had each assumed that job after serving as the nation's tax chief.

Xiao graduated from Renmin University of China in 1982 with a degree in finance. In 1987, while working as a deputy division chief at the Finance Ministry, he took time off for 18 months of study in what was then West Germany.

In 1987, the then-30-year-old Xiao and Lou, who later served as finance minister, co-authored Thoughts on Economic Operation Models and Financial & Taxation Reforms, which was later included in the book The General Design of China's Economic Reform.

During Xiao's tenure as tax chief, the taxation administration opened a department for taxpayer and legal services.

Lou Jiwei will soon turn 66, which is the age at which China requires that every ministerial-level official step down and/or retire.

Before being named finance minister in March 2013, Lou served in several high-level posts, including vice minister of finance, vice governor of Guizhou province, chairman of China Investment Corp., and chairman of Central Huijin Investment.

In 1994, while serving as an official with the State Commission for Restructuring the Economic System, Lou participated in a government tax system reform initiative that helped increase central government revenues. That same year, he played a role in foreign-exchange system reform efforts.

As finance minister, Lou influenced tax system reforms that, for example, replaced China's business tax with a value-added tax, introduced resource and environmental tax regulations, and pushed for property taxes. He also advocated public-private partnership (PPP) financing programs that encouraged private investment in public projects.

In July, at a tax seminar in Chengdu, Lou said he regretted that reform projects that target the nation's income and property tax systems were still on the drawing board. "There are real barriers to income redistribution, but it must be carried out without hesitation," he said.

The NPC Standing Committee, which runs the top legislature between sessions, also appointed Chen Wenqing as minister of state security to succeed Geng Huicang, according to Xinhua. Huang Shuxian was appointed by the top legislature as the minister of civil affairs, a post last held by Li Liguo.

Contact reporter Wu Gang (gangwu@caixin.com); editor Eric Johnson (ericjohnson@caixin.com)

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