Central Financial Work Commission
Encyclopedia
The Central Financial Work Commission (CFWC, Zhongyang jinrong gongzuo weiyuanhui) was created in 1998 to supervise the Chinese financial system
on behalf of the Chinese Communist Party (CCP) and to prevent deviations on the part of CCP-appointed managers. It was proposed by the staff of the Central Finance and Economics Leading Group (CFELG) and pursued by Zhu Rongji
with the support of Jiang Zemin
and Li Peng
. The CFCW had political supervision and personnel authority over the People's Bank of China
and state financial regulatory bodies, as well as over China’s most important national firms.
The Central Financial Work Commission consisted of several core departments: the Organization Department, the Financial Discipline Inspection Work Commission and the Department of Supervisory Board Work. It had about 200 officials and was ranked above ministerial level. Its operations were supervised by Executive Deputy Secretary Yan Haiwang, and it regularly reported directly to its head, CFCW Secretary Wen Jiabao
, who concurrently served as a member of the Politburo
and as vice-premier in charge of work on finance. Wen was CFCW Secretary from 1998 until the organization’s demise in 2002. Some have interpreted this to be evidence of the fact that Wen was being groomed and tested for the position of premier, since he clearly lacked the experience to run effective financial policy. The CFCW facilitated comprehensive personnel reshuffles during its existence, particularly in 1999 and 2000.
The CFWC was abolished at the 16th Party Congress in late 2002, and most of its functions were transferred to state regulatory bodies. Sebastian Heilmann argues that the CFCW was created as part of a strategy to stop the breakdown of the hierarchies in the Chinese financial industry and to restore central policy decisiveness in the aftermath of the Asian financial crisis. While this strategy was successful in establishing centralized supervision and homogenizing financial regulation, it failed to produce market-driven incentive structures for financial executives and clashed with nascent forms of corporate governance emerging in China. According to Heilmann, the dissolution of the CFCW constituted a major redefinition of Party control in economic regulation.
Chinese financial system
China's financial system is highly regulated and has recently begun to expand rapidly as monetary policy becomes integral to its overall economic policy...
on behalf of the Chinese Communist Party (CCP) and to prevent deviations on the part of CCP-appointed managers. It was proposed by the staff of the Central Finance and Economics Leading Group (CFELG) and pursued by Zhu Rongji
Zhu Rongji
Zhū Róngjī is a prominent Chinese politician who served as the Mayor and Party chief in Shanghai between 1987 and 1991, before serving as Vice-Premier and then the fifth Premier of the People's Republic of China from March 1998 to March 2003.A tough administrator, his time in office saw the...
with the support of Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...
and Li Peng
Li Peng
Li Peng served as the fourth Premier of the People's Republic of China, between 1987 and 1998, and the Chairman of the Standing Committee of the National People's Congress, China's top legislative body, from 1998 to 2003. For much of the 1990s Li was ranked second in the Communist Party of China ...
. The CFCW had political supervision and personnel authority over the People's Bank of China
People's Bank of China
The People's Bank of China is the central bank of the People's Republic of China with the power to control monetary policy and regulate financial institutions in mainland China...
and state financial regulatory bodies, as well as over China’s most important national firms.
The Central Financial Work Commission consisted of several core departments: the Organization Department, the Financial Discipline Inspection Work Commission and the Department of Supervisory Board Work. It had about 200 officials and was ranked above ministerial level. Its operations were supervised by Executive Deputy Secretary Yan Haiwang, and it regularly reported directly to its head, CFCW Secretary Wen Jiabao
Wen Jiabao
Wen Jiabao is the sixth and current Premier and Party secretary of the State Council of the People's Republic of China, serving as China's head of government and leading its cabinet. In his capacity as Premier, Wen is regarded as the leading figure behind China's economic policy...
, who concurrently served as a member of the Politburo
Politburo of the Communist Party of China
The Central Politburo of the Communist Party of China or Political bureau of the CPC Central Committee , formerly as Central Bureau before 1927, is a group of 24 people who oversee the Communist Party of China...
and as vice-premier in charge of work on finance. Wen was CFCW Secretary from 1998 until the organization’s demise in 2002. Some have interpreted this to be evidence of the fact that Wen was being groomed and tested for the position of premier, since he clearly lacked the experience to run effective financial policy. The CFCW facilitated comprehensive personnel reshuffles during its existence, particularly in 1999 and 2000.
The CFWC was abolished at the 16th Party Congress in late 2002, and most of its functions were transferred to state regulatory bodies. Sebastian Heilmann argues that the CFCW was created as part of a strategy to stop the breakdown of the hierarchies in the Chinese financial industry and to restore central policy decisiveness in the aftermath of the Asian financial crisis. While this strategy was successful in establishing centralized supervision and homogenizing financial regulation, it failed to produce market-driven incentive structures for financial executives and clashed with nascent forms of corporate governance emerging in China. According to Heilmann, the dissolution of the CFCW constituted a major redefinition of Party control in economic regulation.