Big changes are coming the China’s financial ecosystem. A top official has been removed from his seat of power effective immediately. Interestingly enough, the finance minister was an active proponent of economic reforms in the country. China has been suffering from mounting debt, and addressing that situation should be the top priority.
Curtain Call For China’s Finance Minister
The decision came as quite a surprise, and it looks like the departure of the finance minister is anything but amicable. The Chinese government only issued a one-line statement, and they also announced his replacement in the same breath. For now, it remains anyone’s guess as to why the finance minister was let go, or what the future may hold for China’s economy.
It has to be said, being China’s finance minister is anything but a glorious job position right now. Lou Jiwei took this position during a very turbulent period in China’s financial history, which is still facing its slowest growth in over three decades. His biggest accomplishment to date is the reduction of debt accumulated by Chinese local governments.
What is rather unsurprising is how the new finance minister has close ties to the Chinese Premier. Even though Li Keqiang is virtually in charge of running China’s economy, the nation’s President is reducing his role in economic management. It is evident China will see even more turbulent financial times in the coming years, as turning the country around will not happen overnight by any means.
Consequences of this decision are impossible to predict. Financial experts expect the national housing taxes will increase, which is not something people are looking forward to. With only two areas actively paying national housing taxes, there is still a very long way to go in this regard.
The bigger question is whether or not this new appointment will change China’s stance on Bitcoin. Rumors have been circulating regarding stricter cryptocurrency regulation in the country, although there is no official statement to back up these claims. Bitcoin remains very popular in the country, and the price charts continue to be dominated by Chinese trading volumes.
Header image courtesy of Shutterstock