Week of November 22, 2002

The U.S. and China This Week

DOMESTIC: New leadership announced

The much anticipated leadership changes to the Standing Committee of the Chinese Communist Party were announced on Friday of last week. As expected, Vice President Hu Jintao, a protégé' of Jiang Zemin, was appointed the new general secretary. Other appointees to the Standing Committee include Jiang protégés Wu Banguo, Jia Qinglin, Zeng Qinghong, Huang Ju and Li Changchun. Only three of the new appointees, Wen Jiabao, Luo Gan and Wu Guanzheng are not affiliated with Jiang.

Although officially retiring from his position as head of the Chinese Communist Party, the makeup of the standing committee coupled with Jiang's continued chairmanship of the powerful Central Military Commission, lead many to expect that Jiang will continue to play an influential role in the decision-making of the Chinese government for some time to come.

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DOMESTIC: More cities opened to foreign banks

China's central bank has recently announced that it will be opening up the cities of Guangzhou, Qingdao, Nanjing, Wuhan and Zhuhai for the conduct of yuan denominated business by foreign banks. As Zhuhai was not scheduled to be included in such changes until 2004, the decision puts China slightly ahead of its WTO-mandated liberalization schedule. Prior to the announcement only Shanghai, Shenzhen, Dalian and Tianjin were open for such business.

With foreign banks eager to gain more access to the Chinese market, the announcement comes as good news. Liberalizations, however, only allow for yuan denominated business to be conducted with foreign customers. Foreign banks are not scheduled to be allowed to conduct yuan denominated business with local customers, which is by far the largest market for such services, until 2006.

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The U.S. and China This Week

Last updated: 17 January 2001