HONG KONG (CNN) – The team of Communist Party officials running China’s economy is on the verge of a major overhaul.
The party elite just completed nominations for key government positions ahead of the annual gathering of the National People’s Congress, the country’s parliamentary vote, which begins on Sunday.
Among them are the four men appointed to run the world’s second largest economy: Li Qiang as premier, Ding Xuexiang as acting vice premier, He Lifeng as vice premier and Zhu Hexin as the new central bank governor.
No woman has held these key economic positions in the government of Chinese President Xi Jinping.
All four are expected to be formally confirmed at Congress. The appointments are seen as part of Xi’s attempt to increase the party’s control of the country’s economic institutions, where many Western-trained officials have long influenced policy-making.
Chinese leaders and lawmakers will attend the annual National People’s Congress in Beijing in March 2021.
Unlike their predecessors, the four men, who are either close associates of Xi or linked to his trusted aides, were not trained in the West or they are assumed to have little experience dealing with international financial organizations.
Now all eyes are on how they will help shape policy as the Chinese economy grapples with a growing array of challenges, including sluggish consumption, rising unemployment, a downturn in the real estate market, a lack of business confidence, the local government debt crisis, an aging population, and rising tensions with the United States over technology sanctions.
Congress will set an economic growth target for this year, which should represent a sizeable improvement from last year’s weak 3%, one of its weakest performances in decades but likely a far cry from the pace of expansion China had before the pandemic. The new team has to provide the recovery.
Li Qiang
Li Qiang, a former Shanghai Party chief who oversaw the city’s chaotic two-month lockdown, was named the country’s second-biggest party official after Xi during the October leadership reshuffle.
This puts the 63-year-old in line to succeed Premier Li Keqiang if he steps down during the upcoming Congress.
Li Qiang was appointed the No. 2 party official at the 20th Communist Party Congress in October 2022.
In China’s political system, the prime minister is traditionally responsible for managing the economy, with several vice prime ministers supporting his work and handling various matters.
Born in eastern Zhejiang Province, Li began his career as a laborer at an irrigation pump station. He received his basic education in agricultural mechanization at a college in the city of Ningbo and then worked his way up through the provincial bureaucracy.
His career began after serving as Xi’s de facto chief of staff when Xi was Zhejiang Provincial Party chief between 2002 and 2007.
Li would become the first prime minister since the Mao era not to previously serve as a vice premier in the State Council, China’s cabinet, analysts say.
It was apparently Li’s personal ties with Xi that decided his promotion over more qualified candidates. Julian Evans-Pritchard, senior China economist at Capital Economics, said when Li was promoted last year.
However, some analysts said his tenure in Shanghai, particularly before last year’s Covid lockdown, indicated a pragmatic, business-friendly style.
During Li’s time there, Tesla built its first gigafactory outside of the United States in the city. Tesla is the sole owner of this factory, the first foreign automaker in China to fully own its plant.
“China’s business environment should become friendlier at least in the coming two years,” under Li, who is likely to support private companies and foreign investors, Citi analysts said in a research note.
In 2019, Li also oversaw the launch of China’s Nasdaq-style stock market on the Shanghai Stock Exchange.
thing Xuexiang
Current Xi chief of staff Ding Xuexiang could become the next deputy premier, Nomura analysts said Tuesday, citing their observations based on the ranking of the new Politburo Standing Committee.
Ding Xuexiang will attend an event to introduce new members of the Politburo Standing Committee at the Great Hall of the People in Beijing in October 2022.
That means the 60-year-old, who has never headed a province or gained much experience in economic policy, is likely to have overall responsibility for China’s domestic economy, particularly the country’s fiscal policy.
Ding was born in eastern Jiangsu Province and studied metallurgy at the Northeastern Institute of Heavy Machinery. He began his career at the Shanghai Research Institute of Materials and spent 17 years there, rising from researcher to deputy party chief.
He later joined the Shanghai Communist Party Committee and served as Xi’s top adviser when he spent about seven months as party leader in the city in 2007. In 2013, Ding moved to Beijing as Xi’s personal secretary after Xi was promoted to the top job in the country.
He Lifeng
In addition, He Lifeng, who heads China’s powerful National Development and Reform Commission, could be named the next vice premier in charge of economic, financial and industrial affairs, Nomura analysts said.
He Lifeng addresses a press conference in Beijing in March 2019.
The 68 year old would succeed Vice Premier Liu He, who led China’s negotiations with the United States during the 2018 and 2019 trade talks. Liu is a Harvard-educated economist who has been dubbed “the bridge between East and West” by analysts.
He Lifeng, who received his bachelor’s degree in finance from Xiamen University, has never studied abroad.
He is known for overseeing the construction of a massive state-led investment project in Tianjin dubbed “China’s Manhattan” while serving as the city’s top official following the 2008 global financial crisis. The project has left a legacy of vacant buildings. abandoned skyscrapers and huge debts for the local government.
Zhu Hexin
Another key role to be confirmed during Congress is that of the People’s Bank of China (PBOC) governor, who is responsible for China’s monetary policy and oversight of the financial system.
Zhu Hexin speaking at the Sina China Banking Development Forum in Beijing in July 2015.
Zhu Hexin, chairman of China’s state-owned financial conglomerate Citic Group, is the top candidate to succeed US-educated economist Yi Gang as central bank governor, according to the Wall Street Journal.
Zhu, 55, has spent most of his career at the Bank of Communications in the affluent eastern province of Jiangsu. He also had a stint in Sichuan province in the southwest as deputy governor between 2016 and 2018.
He then worked at the PBOC for two years as Deputy Governor before joining Citic Group in 2022.
Unlike Yi, who has a PhD in economics from the University of Illinois, Zhu has little international experience.
Meanwhile, He Lifeng could take on a concurrent role as PBOC party secretary, which could increase political support for the bank but also undermine its authority, the WSJ reported, citing unnamed sources.
Currently, Guo Shuqing, who heads China’s banking and insurance regulator, is also the party leader of the PBOC. Guo has also received some training in the West, and attended Oxford University as a visiting scholar in the 1980s.
Xi’s selection of top positions represents a leadership style that “priors personal loyalties over competence and productive discourse,” said Sonja Opper, a professor at Bocconi University, in a previous interview with CNN.
“The risk is that China’s leaders will become isolated and lose sight of alternative, possibly better, ways to address the many challenges the country faces,” she said.
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