Pan Gongsheng, who was named governor of the People’s Bank of China after overseeing $3 trillion in reserves, stopped a currency plunge in 2016.
For nearly eight years Pan Gongsheng has overseen one of the world’s biggest pots of money: China’s $3 trillion in foreign currency reserves. Now he will run the country’s central bank, playing an even more powerful role in the Chinese economy.
Mr. Pan, a prominent economist, was named on Tuesday as governor of the central bank, the People’s Bank of China. He had already been installed as the bank’s Communist Party secretary on July 1. It will be the first time in five years that one person will hold both top jobs, giving Mr. Pan outsize policy influence over the financial system of the world’s second largest economy.
The appointment of Mr. Pan comes at a delicate time for China. The country’s post-pandemic recovery is faltering, its banking system is bloated with bad loans to real estate developers and local governments and its currency, the renminbi, is teetering near the lowest levels in 15 years. These crosscurrents are making foreign investors think twice about putting money into China and nudging domestic ones to take their investments out of the country.
Foreign currency reserves are effectively a country’s emergency fund to be used at times of financial stress. As leader of the central bank’s State Administration of Foreign Exchange, Mr. Pan stabilized the renminbi after a devaluation, aimed at strengthening exports and increasing global use of the renminbi, backfired in August 2015.
He steadied the currency then by imposing strict limits, enforced by the police, on the ability of Chinese households and companies and even multinationals to move money out of the country. His actions stanched the outflow of capital but badly damaged the international appeal of the renminbi as an alternative to the dollar, and established a precedent for the planning now underway in Washington to limit American investments in China.
Earlier in his career he held top posts at two of the country’s four main banks, the Industrial and Commercial Bank of China and the Agricultural Bank of China, and streamlined operations at both.
Mr. Pan was among the officials who warned early on of the dangers posed by China’s real estate bubble, which is now deflating with widespread harm to the economy.
