Yi Huiman, former chairman of Industrial and Commercial Bank of China (ICBC), was recently named the head of the China Securities Regulatory Commission (CSRC), replacing Liu Shiyu.
Liu has been named deputy party secretary of the All-China Federation of Supply and Marketing Cooperatives (ACFSMC), state media reported.
Liu had been in charge of the CSRC since February 2016, and that makes him the second longest-serving chairman of the securities regulator.
During his tenure, China’s stock market remained sluggish, but at least Liu has cleaned up some market malpractices and accelerated the IPO process.
However, Liu failed to lure the high-flying tech firms that listed overseas to return to the domestic market, and he was not quite successful in restoring foreign investors’ confidence in A shares.
Yi, as his successor, is likely to focus on two main tasks, launching a new technology board in Shanghai and boosting A shares’ valuations.
Liu’s new post at the ACFSMC, though it sounds like a demotion, is actually an important assignment.
The ACFSMC reported sales revenue of 5.9 trillion yuan (US$875.8 billion) last year.
To put that figure into context, Alibaba’s gross merchandise volume (GMV) was 4.8 trillion yuan last year, while US retail giants Walmart and Amazon reported revenues of US$485 billion and US$177.9 billion respectively, equivalent to about 3.3 trillion yuan and 1.2 trillion yuan.
Indeed, ACFSMC’s sales were higher than that of Alibaba, or the combined revenue of Walmart and Amazon.
Established in 1949, the giant, though labeled as a product of the planned economy, plays a significant role in supplying daily necessities to the country’s vast population.
It has subsidiaries in over 3,000 counties and townships. Villagers buy farming tools, agricultural fertilizer and daily necessities at the cooperatives, as well as fuel, rice, cooking oil and salt.
Since President Xi Jinping was sworn into office in 2013, the ACFSMC has added over 10,000 outlets across the nation. Now it has over 30,000 outlets and covered 95 percent of all townships in the nation.
Liu will probably face three challenges. First, reforming the giant state-owned company with the introduction of new technology such as online to offline (O2O) marketing.
Second, Beijing seems to be interested in securitizing more state assets, following the listing of China Tobacco International, the overseas subsidiary of China’s state-owned tobacco monopoly. Liu will probably be responsible for readying the ACFSMC for public listing.
Against the backdrop of escalating US-China trade tensions, Liu’s third mission might be coordinating farmers to come up with products that might be in shortage if the trade war takes a turn for the worse.
This article appeared in the Hong Kong Economic Journal on Jan 28
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]