A recent article from CNN confirms that Yi Gang has been confirmed by Chinese parliament to head the country’s central bank. The previous leader, Zhou Xiaochuan, held his position for 15 years and is just now stepping down. This is making world headlines because China’s economy now stands as the second largest in the world.
Under previous leadership, China’s Central Bank embraced many Western reforms, which investors are hoping that its new leader continues. Yi taking over this prestigious position has been interpreted by global investors so far as a sign that China wants to continue with business as usual. China’s Central Bank sets the country’s interest rates. China’s economy is expected to grow at a rate of 6.5 percent this year, which is only slightly below the impressive growth rate for 2017.
One of the biggest factors unresolved in how well China’s economy will do in the coming year is whether President Donald Trump will go forward with the tariffs that he has threatened on steel and other imports. In addition, President Trump has mentioned on numerous occasions that he would like to see an investigation into the intellectual property theft that many Chinese companies have been accused of. If this rhetoric actually turns into action, it could spell the beginning of expensive and devastating trade wars between the U.S. and China. Investors are somewhat wary of these factors but are also generally pleased with China’s progress in adopting a more free market economic approach over the past decade.