Rumor: People's Bank of China Chief Has Defected

Rumors attributed to a news report from the Hong Kong news
agency Ming Pao quickly circled the globe this morning that
People's Bank of China Gov. Zhou Xiaochuan has defected.

The speculation is that he is trying to avoid being punished
for a loss of some $430 billion on U.S. Treasury bonds,
according to the Austin-based private intelligence bureau
Stratfor.

Gov. Zhou has been believed to be under house arrest for
months, according to the report, following an investigation
that led to the 2006 arrest of Wang Yi, vice governor of the
China Development Bank.

Though there has been no official confirmation of the rumor,
the fact that the People's Bank has gone to elaborate
lengths to impress the Chinese state-run media that the bank
chief is in not trouble is seen by intelligence analysts as
a strong indication there is a shakeup in the power
structure within the Chinese Communist Party.

Zhou's name has been blocked from search engines on the
Chinese internet.

He is known to have political ambitions and is a close ally
to former Chinese President Jiang Zemin. He is also a core
figure in the "Shanghai Gang" associated with President
Jiang.

Several news stories released today mentioned Zhiou in
connection with a visit by Japanese Financial Services
Minister Shozaburo Jimi during a high level Chinese-Japanese
economic dialogue on the relative values of the Yen and the
Yuan.