The average forecast for China's GDP in 2020 could be around 5.9%, indicating that the world's second-largest economy will continue to experience downward pressure.
Slowing growth, deteriorating financial conditions for local governments, slowing property construction investment, plunging manufacturing investment, and credit crunches in low-tier cities have sparked concerns that China's big financial meltdown could be nearing.
In response to the elevated financial risks, Chinese President Xi Jinping installed 12 former executives at state-run financial institutions across the country who will support the communist government's ability to combat banking and debt difficulties, reported Taipei Times.
Some of the most recent appointments have been central bankers, veteran securities officials, and provincial governors, who will also help transition China's economy from the world's factory to a service-based economy producing high-quality goods. At the same time, the government is preparing for an extensive personnel reshuffle in 2022, with at least half of its 25 members of the Politburo could be replaced.
Feng Chucheng, a partner at Plenum, an independent research platform in Hong Kong, told Taipei Times that "Bankers are now in demand, as local governments are increasingly exposed to financial risks."
"These ex-bankers and regulators are given the task of preventing and mitigating major financial risks," Chucheng said.
The appointments are in response to growth collapsing to a three-decade low in 2019, as traditional monetary policy becomes ineffective to boost the economy.
One reason behind the ineffectiveness behind monetary policy in the country could be due to a balance sheet recession of companies that are paying down high debt loads, in an attempt to deleverage, causing investments to decline and contributing to slower economic growth.
Taipei Times noted that five regional banks have had "liquidity problems this year, raising the prospect of devastating debt bombs lurking in unexpected corners."
He Haifeng, director of the Institute of Financial Policy at the Chinese Academy of Social Science, said: "Appointing financial vice governors to provinces can help better integrate financial policies into local practice, and to prevent financial risks beforehand."
And while central banks around the world are cutting interest rates and pumping liquidity into markets on the premise of a return to global growth in 2020, China is currently preparing for a slowing economy and financial armageddon.