By Zhang Yong (张勇) and Chen Xu (陈旭)
Market, page 17
Issue No. 562
Mar 26, 2012
Translated by Ma Zheng
Original article: [Chinese]

This is an extended abstract of an article that appeared in this week's edition of The Economic Observer, for more highlights from the EO print edition, click here.

In October this year, the China Securities and Regulation Commission (CSRC), the country's top securities regulator, will turn 20.

Ahead of the twentieth anniversary of the its establishment, the body will embark on a wide-ranging round of high-level personnel changes.

According to what the EO has learned, the CSRC recently decided that officials above departmental-level who have been working in "powerful departments" (权力部门) for five successive years will be made to switch positions with those employed in "less powerful departments" (非权力部门).

A person working close to the CSRC told the EO that the major personnel reshuffle inidicated an adjustment to the CSRC's thinking in relation to how it conducts supervision. These personnel changes are a sign that the regulator will keep pushing ahead with its program of major reforms of China's capital markets, which include a shake-up of IPO procedures and other institutional reforms.

The personnel shake-up is also being interpreted as a sign that the regualtor's chairman Guo Shuqing (郭树清), who was only appointed to the position five months ago, plans to alter the approach of the body in relation to its task of supervising China's capital markets.

A market analyst said that the "powerful departments" definitely referred to those that wield administrative examination and approval power.
 
The CSRC has gradually been simplifying the number of procedures that require administrative approval over recent years.

The proposed changes to personnel are being seen as an attempt to break-up networks of influence that currently exist and are a sign that the "marketization" of China's capital market has entered a critical period.

In addition to moving entrenched officials from positions in which they've remained for extended periods of time, the regulator also plans to open up the application procedures for more positions so that they can hire more people from outside the existing system.

Wu Lijun (吴利军), assistant to the Chairman of the CSRC, told a meeting on March 22 that China's six domestic exchanges, including the Shanghai Stock Exchange and the Shenzhen Stock Exchange, will soon recruit six deputy managers through a transparent public hiring procedure.

"There used to be only a few high-level positions open for public recruitment," a person close to CSRC told the EO, adding that it is of great significance for the regulator to open up high-level positions to applications from outside the system.

Staff at the CSRC have started referring to the period from the end of February to the end of March as the "HR Tsunami Month" (人事风暴一月).

At the end of February, CSRC announced that it will hire more qualified individuals for mid- and high-level positions in the CSRC. In mid March, the regulator decided that all high-level officials will switch roles and by the end of March, the CSRC will recruit ten new officials at departmental and bureau level.