Money Machine

Chapter 8Behind the Scenes

While we worked on all fronts to move the deal forward, events were unfolding that were well beyond our control. 2003 would bring a major reshuffle of the Chinese government, a once‐every‐10‐years change in the top leadership. In March 2003, President Jiang Zemin and Prime Minister Zhu Rongji retired. Hu Jintao was elevated to the presidency and Wen Jiabao, who had been vice premier under Zhu Rongji, became the prime minister. Wen had given his in‐principle consent to our SDB deal in 2002, along with Zhu.

The reshuffle of cabinet members had begun even sooner, toward the end of 2002. And it brought two key players into the equation who would drive changes in China's banking industry for the next decade and beyond.

In December, Zhou Xiaochuan became governor of the PBOC, the central bank. Zhou was the best trained and most experienced central banker the People's Republic of China had ever had. He had studied chemical engineering in college and obtained a PhD in automation and systems engineering from China's elite Tsinghua University. He had served as deputy president of the Bank of China, one level below the CEO, and also as the deputy governor of the PBOC while simultaneously heading up China's State Administration of Foreign Exchange, also known as SAFE, which manages China's foreign currency reserves. He later was chairman of China Construction Bank, and, most recently, chairman of the China Securities Regulatory Commission. It was quite a resume. ...