With World Fixated on U.S. Election, China Moves on Three Fronts

(Bloomberg) -- As the world focuses on the race for the White House, China unveiled three major decisions within three minutes of each other on Monday.

Among a raft of statements issued by the Standing Committee of the National People's Congress, Beijing named a new finance minister, effectively barred a pair of elected Hong Kong “localists” from office, and passed a cybersecurity law that may hamstring foreign companies in Asia's biggest economy.

The news from the nation's top legislative body followed a plenum of top Communist Party officials last month, where President Xi Jinping was declared the “core” leader of China -- a designation that boosted his authority.

For analysis of Xi's new power, click here

Here's a look at the three decisions:

Finance Chief

Little more than three years into the job, veteran reformer Lou Jiwei was replaced as finance minister in favor of Xiao Jie, a former senior aide to Premier Li Keqiang who has spent more than two decades at the ministry.

Xiao, the former head of China's tax administration, will be tasked with juggling fiscal stimulus and efforts to rein in excess leverage. He'll also have to get to know a new U.S. treasury secretary as protectionist sentiment increasingly grips the global economy. Lou had overseen a restructuring of local-government finances that helped cut the cost of a record accumulation of debt by cities and provinces after the global financial crisis.

With monetary policy shifting to a more neutral stance, the Finance Ministry has been playing a bigger role in maintaining economic momentum, using tools such as funding projects and expanding the fiscal deficit. There was no announcement on the fate of central bank chief Zhou Xiachuan, who has worked with multiple finance ministers since entering office in 2002.

Localists Barred

The Standing Committee also ruled that Hong Kong people who advocate independence from Beijing can't hold public office -- a rare intervention aimed at stopping two elected localists from taking their posts.

The decision was only Beijing's second unilateral interpretation of the law in the former British colony since it was returned to China almost two decades ago. It came before a Hong Kong court ruling over whether the pro-independence activists voted into the city's legislature in September could serve in the chamber after insulting China in their oaths of office.

The intervention threatens to spark further unrest after thousands of protesters gathered Sunday outside Hong Kong's highest court to oppose the widely anticipated move. Democracy advocates and lawyers said the intervention would firm up opposition to the government and risked damaging international confidence in a city known as an enclave of political freedom.

For an explainer on Hong Kong democracy, click here

Cybersecurity Law

Beijing also gave the green-light to controversial legislation that may grant China unprecedented access to the technology of foreign companies operating in the country.

The Cyber Security Law, which will take effect in June, requires Internet operators to cooperate with probes involving crime and national security. Companies will face mandatory testing and certification of computer equipment and will have to give investigators full access to data if misconduct is suspected.

China's safeguarding of its IT systems has grown increasingly aggressive along with its policing of cyberspace as public discourse shifts to online forums. Foreign companies are concerned that requirements to store data locally and only employ technology deemed “secure” means local companies will gain yet another edge over them.

To contact the reporter on this story: Andy Sharp in Tokyo at asharp5@bloomberg.net. To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Sam Nagarajan