Li Qiang, the previous Communist Party chief of Shanghai, took office on Saturday as China’s premier, the country’s No.2 post, putting the close ally of President Xi Jinping answerable for reviving an economy battered by three years of COVID-19 curbs.
Widely perceived to be pragmatic and business-friendly, the 63-year-old Li faces the daunting task of shoring up China’s uneven recovery within the faces of worldwide headwinds and weak confidence amongst consumers and the private sector.
Li takes office as tensions rise with the West over a number of issues including U.S. moves to dam China’s access to key technologies and as many global corporations diversify supply chains to hedge their China exposure as a consequence of political risks and the disruptions of the COVID era.
The profession bureaucrat replaces Li Keqiang, who’s retiring after two five-year terms during which his role was seen to be steadily diminished as Xi tightened his grip on power and steered the world’s second-largest economy in a more statist direction.
Li Qiang is the primary premier because the founding of the People’s Republic never to have served previously within the central government, meaning he may face a steep learning curve within the initial months on the job, analysts said.
Still, Li’s close ties with Xi – Li was Xi’s chief of staff between 2004 and 2007, when the latter was provincial party secretary of Zhejiang province – will empower him to get things done, leadership-watchers said.
“My reading of the situation is that Li Qiang can have so much more leeway and authority inside the system,” said Trey McArver, co-founder of consultancy Trivium China.
SLATE OF LOYALISTS
Xi, 69, is installing a slate of loyalists in key posts in the most important government reshuffle in a decade as a generation of more reform-minded officials retires and he further consolidates power after being unanimously elected president, a largely ceremonial role, for an unprecedented third term on Friday.
On Saturday, Li received 2,936 votes, with three votes against and eight abstentions, in response to totals projected on a screen contained in the Great Hall of the People in central Beijing.
He’ll make his closely watched debut on the international stage on Monday throughout the premier’s traditional media question-and-answer session after the parliamentary session ends.
Li was put heading in the right direction to turn into premier in October, when he was appointed to the number-two role on the Politburo Standing Committee throughout the twice-a-decade Communist Party Congress.
Quite a few other Xi-approved officials are as a consequence of be confirmed on Sunday including vice premiers, a central bank governor and other ministers and department heads.
UNEVEN RECOVERY
China’s economy grew just 3% last 12 months, and on the opening day of parliament Beijing set a modest 2023 growth goal of around 5%, its lowest goal in nearly three a long time.
Li’s top task this 12 months will probably be beating that focus on without triggering serious inflation or piling on debt, said Christopher Beddor, deputy China research director at Gavekal Dragonomics.
While China has not signalled plans to unleash stimulus to jump-start growth, potential setbacks comparable to a collapse in exports or persistent weakness within the property sector could force Li’s hand, Beddor said.
“The leadership has already accepted two years of exceptionally weak economic growth within the name of COVID containment. Now that containment is gone, they will not accept one other,” he said.
China’s post-pandemic recovery has been uneven, with February inflation unexpectedly soft, while Chinese e-commerce giant JD.com Inc warned on Thursday that rebuilding consumer confidence would take time.
A few of Beijing’s most successful private firms comparable to Alibaba have been battered by abrupt crackdowns and regulatory hurdles lately, and Li can have to work hard to revive confidence within the private sector.
Global business can also be wary. For the primary time in 25 years of its survey, the American Chamber of Commerce in China said early this month that a majority of responding corporations said China isn’t any longer seen as a “top three investment priority”.
China is attempting to present a business-friendly face.
On Friday, the Xinhua news agency reported that an official with China’s state planning agency had met with a vice chairman from U.S. chip giant Qualcomm Inc and conveyed that it’s going to provide a superb business environment for multinationals.
