“Why are pictures of Yang Chin-long so rare?“ is a question that illustrates the headache that finance reporters recently faced after the low-profile Yang emerged as Central Bank Governor Perng Fai-nan’s (彭淮南) successor.

In the decade since taking the post of vice governor, the 64-year-old Yang has always appeared in public side by side with Perng. At press conferences following central bank board meetings, Yang usually sat on Perng’s right, burying his white-haired head in documents, successfully dodging the limelight.

This rarely photographed vice governor is slated to formally take the helm of the CBC when Perng's current term ends February 25, after 20 years as top central banker. Who is this man who will soon control Taiwan’s all-time high foreign exchange reserves (US$451.5 billion in December 2017) and decide how to operate forex rates and interest rates for this nation of 23 million people?

A Prudent Banker Who Remains an Enigma

When you try to find out more about Yang, you inevitably get the answer, “I don’t know him well,” no matter whether you talk with entrepreneurs, officials or even his CBC colleagues.

“He is a very prudent person. He has always behaved in a very correct manner, going strictly by the book,” notes Norman Yin, professor at the Department of Money and Banking of National Chengchi University (NCCU).

Yang, who joined the CBC in 1989, is an NCCU alumnus. He earned a bachelor’s degree in banking and a master’s degree in international trade from NCCU before pursuing a doctorate in economics in Britain. In recent years, Yang has assisted the NCCU Department of Money and Banking in his capacity as alumnus. But in contrast to other prominent alumni who often go out of their way to communicate with their alma mater, Yang usually prefers to offer his advice in private.

“That’s the style Taiwan’s central bank has cultivated under Perng. Aside from Perng, the others don’t talk as they please outside the bank. In the past, they also tried to stay out of the public eye as much as possible,” observes Yin.

Liang Chi-yuan, research fellow at the Institute of Economics of Academia Sinica and a CBC supervisor, observes that Yang always sticks to his manuscript and never ad-libs when delivering a public address or statement on behalf of Perng.

Academia Sinica Research Fellow and CBC Executive Director Hu Sheng-cheng, who previously urged President Tsai Ing-wen to retain Perng, believes that the best candidate to succeed Perng as CBC governor would be his clone. That Yang prevailed among the rumored candidates certainly also owes to the fact that he has certain points in common with his mentor Perng.

In the decade since taking the post of vice governor, the 64-year-old Yang has always appeared in public side by side with Perng. Yang is known as a very prudent person who acts in a correct manner and goes strictly by the book.

A Power Walker Following in Perng’s Footsteps

Yang and Perng were both born into farming families. While Perng hails from Hsinchu, Yang grew up down south in Pingtung County. In a rare interview, Yang once frankly remarked that his family was poor when he was little. After school, he had to help look after the farm’s animals, feeding chickens and ducks. Only if they had poultry to sell would the family be able to raise enough money to pay his tuition.

In his childhood, Yang was a Little League pitcher, developing a sporting habit for life. After growing up, Yang, who had a strong physique, joined the notoriously rigorous Marine Corps for his compulsory military service. Like Perng, Yang is a sporty person. Both are power walkers. Perng does some brisk walking every day with his wife in Da-an Forest Park or the Chiang Kai-shek Memorial Hall grounds. Yang, for his part, has the habit of taking walks all by himself in the neighborhood of the CBC after lunch to relax. He also sticks to his Qigong exercises, a practice he took up long ago.

Yang went on to graduate school at NCCU after obtaining his bachelor’s degree in banking. After graduating with a master’s degree in international trade, he went to Britain on a Ministry of Education scholarship to study for a doctorate in economics at the University of Birmingham. Having just received his doctoral degree, Yang joined the CBC in 1989.

Yang was first assigned to the Department of Economic Research, whose director-general was Perng at the time. When Perng was promoted to head the Department of Foreign Exchange, Yang followed him there. When Perng left the CBC to serve as chairman of the Central Trust of China and subsequently as chairman of the International Commercial Bank of China (ICBC) (the precursor of Mega International Commercial Bank), Yang was transferred to the CBC's London Representative Office. When Perng returned to the CBC as its governor in February 1998, he called Yang back to headquarters.

“He has always been a low-profile, conscientious person,” remarks Lii Sheng-yann, a former director-general of the CBC's Department of Banking and honorary consultant to the Center for Asian Studies at National Taipei University.

Yin believes the fact that a CBC insider is taking over as governor also shows that the government is concerned that a candidate from outside would lack typical CBC “DNA”. Someone who is not familiar with the CBC’s inner workings might have difficulty ensuring a seamless leadership transition. Yet Yin, who has also served as a legislator, adds, "He is perhaps not as aggressive as Perng, who would immediately issue clarifications and make phone calls whenever a piece of news came out.”

Many bankers, including former CBC Vice Governor Shea Jia-dong, describe Yang as a polite and humble person.

Perng, for his part, usually riposted deftly when being grilled in parliamentary questioning sessions. One scholar who has observed Yang for many years notes that Yang should probably work on his oratory skills.

“Outsiders don’t know him well enough. He needs to build some prestige in the outside world, or else his job will be very tough,” says Yin.

CBC Supervisor Liang sums up how market players interpret Yang’s appointment: “That Yang is to serve as governor shows that the government affirms the monetary and exchange rate policies that Perng pursued over the past 20 years. The government expects him to continue Perng’s approach and maintain stable interest rates and financial stability.”

Information Should be More Transparent

Yet Wu Tsong-min, professor at the Department of Economics of National Taiwan University and a former CBC supervisor, is not too sure whether Yang should follow Perng’s established rules. “Very positive policies should be upheld. If there are areas that need to be reviewed, they should not necessarily be kept,” posits Wu.

Wu also believes that the CBC should make its policy more transparent. Records on foreign exchange reserve management and open market operations to influence interest rates and foreign exchange rates should be made public after a certain period of time. “Japan’s central bank makes [such records] public after half a year. It is only possible to discuss the effectiveness of monetary policy if this information is available,” Wu points out.

Wu argues that, without transparency and openly accessible information, such discussions are not possible. Therefore, greater information transparency is an indispensable complementary measure that the CBC ought to take to safeguard its independence.

From a certain perspective, information transparency is also the only way to protect the central bank’s independence. There is latent concern whether the CBC will be able to maintain its independence once “strong-man governor” Perng has retired. Some fear that the once independent central bank, which became a Cabinet agency following the launch of a government restructuring program, could become a political tool.

With the implementation of the amended Organizational Act of the Executive Yuan in 2012, the governor’s position was downgraded to that of a Cabinet member. Yet the central bank governor is still appointed by the president for a five-year term. And since the approval of the Legislative Yuan is not required, the governor’s term is guaranteed based on past practice.

Perng served under four successive presidents of different political affiliations – Lee Teng-hui, Chen Shui-bian, Ma Ying-jeou and the current President Tsai. Since he enjoys a good professional reputation and public prestige, politicians are forced to grant him due respect. Will Yang be able to build a reputation as imposing as Perng’s? Will he be able to maintain the CBC’s independence? That is the yardstick against which his performance will be measured.

Translated from the Chinese article by Susanne Ganz

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