Ms Ren, who is the daughter-in-law of the former Chinese premier Zhao Ziyang, left Citigroup in 2004 following allegations that she presented false information to the bank and Chinese regulators.
The allegations related to the listing of China Life in 2003 - which she was involved in while at Citigroup.
She was cleared of any wrongdoing by the Securities and Exchange Commission (SEC) last year.
Ms Ren is believed to be a significant asset in the Chinese banking industry because of her influential contacts in what is a strongly regulated business environment.
Merrill Lynch will be hoping that her appointment will better equip them for the significant competition already present in the Chinese market from foreign banks including UBS and Goldman Sachs.