Before being named China’s No. 2 leader last week, Li Qiang ran Shanghai, a city that was hailed for a time early last year for trying to contain Covid with relative restraint. Wanting to avoid the economic devastation of a full lockdown, city officials instead opted for limited restrictions, which in one case applied to a single milk tea shop.
But as the cases spread, the central government in Beijing intervened. Suddenly, the pragmatism and pro-business character that had long characterized Shanghai’s spirit gave way to “zero Covid,” Supreme Leader Xi Jinping’s single-minded quest to eliminate the virus. Mr. Li, who vowed to “resolutely implement” Mr. Xi’s orders “without hesitation,” imposed a city-wide lockdown, confining 25 million people in their homes for two months.
Mr Li’s pivot in Shanghai demonstrated his loyalty to Mr Xi, a trait that appears to have kept him close to the top for two decades, culminating in his elevation to prime minister on Saturday. But it also shows how he is at the center of the tension between Mr. Xi’s emphasis on authoritarian communist control of society and the pro-business, free-market policies that have underpinned China’s rise.
The direction of the world’s second largest economy now depends on how these tensions unfold.
The party has tried to demonstrate that Mr. Li has Mr. Xi’s confidence. When Mr. Xi was re-elected president at the National People’s Congress last week, the two men were seen sitting side by side on the stage, chatting animatedly. But the prime minister’s position has also been weakened under Mr Xi.
Mr. Li “will only focus on domestic livelihood issues,” said Alfred Wu, an associate professor at Singapore’s Lee Kuan Yew School of Public Policy, who specializes in China political and economic issues. Mr. Xi will be responsible for practically everything else.
Even within this limited range, Mr. Li faces serious challenges. To revitalize China’s economy, he must restore confidence battered by Covid restrictions, as well as tech and real estate crackdowns. Mr. Li tried to persuade private companies of their importance to the party and Beijing’s commitment to a market-oriented economy at his first press conference as premier on Monday, despite Mr. Xi’s emphasis on national security and communist ideology.
Mr. Li pointed to his many years of experience working in cities and provinces with strong private companies and entrepreneurs. “I have some understanding of their aspirations and concerns as they develop,” he said at the briefing.
Mr. Li’s notes indicate a commitment to business promotion. As Party Secretary of Shanghai, he successfully pushed for the creation of another stock exchange in the city. Under the leadership of Mr. Li, Elon Musk built what is now Tesla’s largest electric car factory in Shanghai. The factory began producing cars in less than a year after construction workers took turns working around the clock under floodlights, a standard for priority projects in China.
At times he sounded like a free market advocate. “When facing the market, the government must respond when there is a request, but not interfere when nothing comes,” he told the official Xinhua News Agency in 2018.
Mr. Li, 63, spent his entire career up until last fall working his way up through a series of city and provincial governments on China’s prosperous east coast, while cultivating his relationship with Mr. Xi.
He began his career at an irrigation station, then at a tool factory in Rui’an, a county on the outskirts of Wenzhou, one of China’s most entrepreneurial cities. He worked his way up to become chairman of the Wenzhou Communist Party, a position he held for three years until 2004. Then Mr. Li moved to Hangzhou, the capital of Zhejiang, and for several years became the chief of staff of Mr. Xi, then the provincial party chairman.
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Robert Lawrence Kuhn, an American author, businessman and host of a program on Chinese state television, visited Zhejiang Province on a book tour in 2005 and met Mr. Xi and several of his associates, including Mr. Li. A year later, during an interview with Mr. Xi for a different book, Mr. Kuhn found only Mr. Li by Mr. Xi’s side.
“He wasn’t just there to carry his briefcase, he was very engaging,” Mr. Kuhn recalled of the meeting, referring to Mr. Li. Mr. Kuhn said that Mr. Li was someone that Mr. Xi “at least… more than any other trusted at that time”.
Mr. Li then rose quickly in the ranks of the provincial Communist Party, and just two months after Mr. Xi became China’s supreme leader in 2012, he appointed Mr. Li as governor of Zhejiang. Three years later, he again promoted Mr. Li to become secretary of the Communist Party of Jiangsu Province, a thriving center of heavy industry north of Zhejiang. And in 2017, he elected Mr. Li as secretary of the Shanghai Communist Party — long a stepping stone to the Politburo Standing Committee, including for Mr Xi himself.
The big question facing Mr Li is whether he will retain the same access to Mr Xi and the same influence in Beijing that he once had as a senior adviser in the much smaller world of provincial government.
“You can’t assume he can do it in the future because he’s been able to speak openly with Xi in the past,” said Kenneth Jarrett, a former American diplomat and business leader in Shanghai who has met Mr. Li many times in Zhejiang and later in Shanghai.
There are obvious limitations to Mr. Li’s influence on matters of national importance. At the start of the pandemic, Mr. Li played a key role in an agreement between BioNTech, a German biotech company, and Fosun Pharma, a private-sector pharmaceutical company in Shanghai, to manufacture BioNTech’s mRNA vaccines in Shanghai, said Joerg Wuttke, president of the Chamber of Commerce European Union in China.
With Mr. Li’s help, Fosun quickly built a factory in Shanghai. In December 2020, the factory began mass production of an mRNA vaccine. However, Wuttke said the vaccines were never approved for use, partly because of hindrances from Beijing.
“He was a matchmaker, but the marriage was never consummated,” said Mr. Wuttke.
Mr. Li’s reputation was also badly damaged by last spring’s Shanghai lockdown, which was often messy and botched when some residents were locked in their homes without access to food and critical medicines. The city was also later the scene of rare protests against “zero Covid” and particularly against Mr Xi’s authoritarian leadership.
Since then, Mr Li has been credited with helping lead China’s push to quickly abandon its “zero Covid” policy in early December, several people who know Mr Li said in interviews in early January, speaking on condition of anonymity to talk about the elite Chinese politics.
However, Mr. Li’s move should not be construed as a broader sign of his influence in central leadership, said Neil Thomas, an expert on Chinese elite politics. By then it was clear that Omicron’s rapid proliferation had rendered lockdowns and mass testing unsustainable and pointless.
“When it really mattered for the Chinese economy, he was unable to convince Xi Jinping to reverse zero Covid,” he said, referring to Mr Li’s deference to Beijing’s authority during the Shanghai lockdown.
“Xi will likely listen seriously to what Li Qiang has to say about economic policy, but ultimately Xi will still call the shots,” Mr Thomas added.
Chris Buckley, John Liu and Amy Chang Chien contributed reporting and Li You contributed research.
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