China-watchers are still deciphering the tea leaves from the recently completed Party Congress. But if there is one consensus emerging beyond all the mumbling about president Xi's consolidation, it's that the overall policy direction has not really changed.
That is a problem. To pick one factor above manifold risks facing China, the growth of debt levels to hard-to-gauge proportions within the financial system remains especially worrying.
In that respect, it was a welcome change from the pomposity and superficiality of Party Congress rituals to see Zhou, the outgoing governor of the PBoC, go against the grain with a dose of realism. He made his point of view heard with comments made to media before and after the ceremony.
Two moments, in particular, stood out. One was a warning on October 19 about the need not to embrace reckless optimism that could lead to China's own Minsky moment (the collapse of asset prices after a prolonged rise) if risks from rising corporate and household debt go underestimated.
The second came on November 4 when Zhou penned a long article digging deeper into the main risks to the Chinese economy. Chief among them, unsurprisingly, were leverage levels in the system.
Onlookers have rightly pointed out that Zhou's comments are a bit late in the game. He already has one foot out of the door and he should have made clear his worries while he still had the power to influence overall policy.
That is a reasonable stance, but let's not fool ourselves. This is China we are talking about. A reformist like Zhou has probably had to fight plenty of battles to keep alive any reform efforts at all since the start of his last term in 2012. The crackdown on outbound capital flows over the past two years shows the extent to which even powerful figures like Zhou were quickly sidelined when the Party felt its priorities for the Chinese economy — summarised with the catch-all concept of stability — were under threat.
What Zhou is doing is, in many ways, not surprising. The end of a term of public office is usually a period when officials tend to become less tight-lipped with criticism of their patrons and colleagues. But given the lack of independence of the PBoC from the Party's will, Zhou's intervention should be given twice the credit.
GlobalCapital Asia can only hope that Zhou's swansong does herald a new era of increased transparency, with the next governor hopefully able not only to put pen to paper but also follow through on the urgent need for reform.
Some hope for more forceful action comes from the establishment of the Financial Stability and Development Committee (FSDC), set up within the PBoC and chaired by the State Council. Zhou Xuedong (no relation), former deputy head of the Financial Stability Bureau of PBoC, has been made the head of the new bureau. He will essentially run the day-to-day operations of the FSDC as well.
Should the latest Zhou make the most of his role, he can provide crucial backing to the next PBoC governor, allowing a push for structural reform and — dare we dream it — a modicum of independence.
Given the gigantic challenges ahead for China, he will need it.