As the head of the State Administration of Foreign Exchange and one of the fi ve People’s Bank of China deputy governors， Yi Gang’s opinion on fi nancial reform matters. During a talk in April， the 56-year-old offi cial said foreign exchange reform should come before interest rate liberalization. This pointed to a different direction to what many economists had viewed as the charted course for fi nancial change in China， which set FX reform at the distant end. There’s good reason to believe that Yi’s voice will be heard. A week before his comment on foreign exchange reform， he was named a deputy head of the Offi ce of the Central Leading Group on Financial and Economic Affairs， a top economic planner established in the early 1980s and itself a rising authority within the Communist Party. Bank of America Merrill Lynch chief China economist Lu Ting put it bluntly in a note to investors： “Heed what PBOC’s Yi Gang says.” Still， many economists disagree with the idea that foreign exchange liberalization should be next on the fi nancial reform to-do list. “That’s a theoretical sort of statement because in theory [foreign exchange and interest rate liberalization] should actually happen at the same time，” says Dariusz Kowalczyk， senior analyst at investment bank Credit Agricole. “It’s certain that foreign exchange will not be fully freed anytime soon.”
