The pro-business record of the man poised to become China’s top economic official will make his tenure a test of whether he can moderate President Xi Jinping’s penchant for intervention.
Li Qiang, 63, who is expected to be elected China’s premier on Saturday, will have to contend with a slowdown in the world’s second-largest economy, which is struggling to emerge from the COVID-19 pandemic, weak global demand for exports, prolonged US tariff hikes, shrinking workforce and aging population.
Xi, who has strengthened the state sector, has said he wants the ruling party to return to its “original mission” as China’s economic, social and cultural leader. This was accompanied by tighter control of certain industries, more aggressive censorship of television and pop culture, and the spread of a “social credit” system that penalizes the public for offenses ranging from fraud to pollution. Xi assumed China’s most powerful role in 2012.
Now, observers are watching whether Lee can develop realistic policies during his five-year term. But China’s political decision-making process is opaque, making analyzing the country’s direction difficult for outsiders.
Expectations are based on Li’s performance as party leader of the country’s largest city – Shanghai – and as governor of neighboring Zhejiang province, a hub of small and medium-sized businesses. And, perhaps most importantly, his close ties to Xi.
Li was quoted as saying in a 2013 interview with the prestigious business magazine Caixin that officials should “put the government’s hands in place, put away the restless hands, pull back the overstretched arms.”
Li hailed Zhejiang’s businessmen as the most valuable resource in the province, pointing to e-commerce billionaire Jack Ma, and highlighted his government’s bureaucracy.
Instead, Lee has also tightened some government controls, including rules aimed at preventing the spread of COVID-19. When his local government was not coordinated with the national policies set by the president and his team, he eventually fell in a step that is considered key to his rise.
Under President Xi, entrepreneurs have been hit not only by tighter political controls and restrictions against COVID-19, but more scrutiny of e-commerce and other technology companies. Antitrust and data security crackdowns have wiped billions of dollars off the stock market value of companies. Beijing is also pressuring them to pay for social programs and official initiatives to develop processor chips and other technology.
Born in Zhejiang, Li studied agricultural mechanization and rose through the provincial party ranks. In 2003, he started an executive MBA program at the Hong Kong Polytechnic, common among ambitious party officials.
Priscilla Lau, a former university professor and former representative of Hong Kong in China’s parliament, said Li took her class on Hong Kong’s free market economy for a chamber in the city and said she remembered her class when they met in Shanghai more than a decade later.
“It shows that he is very diligent,” Lau said.
Li’s working relationship with Xi began in the 2000s, when the latter was appointed party chief in Zhejiang. After Xi’s eventual move to Beijing and his appointment as party general secretary, Li was promoted to governor of Zhejiang in 2013, the No. 2 role in the provincial government.
Three years later, Li was appointed party chief of Jiangsu province, an economic powerhouse on China’s east coast, marking the first time he held a post outside his home province. In 2017, he was named Shanghai party chief, a role Xi held before the president assumed China’s key leadership roles.
In the commercial hub of Shanghai, Li continued to pursue pro-business policies. In 2018, electric car maker Tesla announced that it would build its first factory outside the United States. It broke ground half a year later as the first wholly foreign automaker in China. Even during Shanghai’s strict COVID-19 lockdown last year, the factory managed to resume production after a suspension of about 20 days, the official Xinhua news agency reported.
Tesla Vice President Tao Lin was quoted as saying that several government departments had been working almost around the clock to help businesses resume operations.
“The Shanghai government bent over backwards,” said Tu Le, chief executive of Sino Auto Insights, a Beijing-based consultancy.
In more complex matters, all was not smooth sailing.
Although Li helped broker a deal between Chinese and European companies to produce mRNA vaccines, Beijing was not in favor and the deal was put on hold, said Joerg Wuttke, president of the EU Chamber of Commerce in China.
Before the citywide lockdown, Lee seemed to have more leeway to manage the financial center’s earlier, smaller outbreaks than leaders in most other cities. Instead of sealing off the districts, the government implemented limited lockdowns on homes and workplaces.
When the highly contagious variant of the Omicron hit Shanghai, Lee took a moderate approach until the central government stepped in and sealed off the city. The brutal two-month lockdown last spring confined 25 million people to their homes and severely disrupted the economy.
Li was named No. 2 in the ruling Communist Party in October, when China’s president broke with past norms and gave himself a third five-year term as general secretary.
Unlike most of his predecessors, Lee has no national-level government experience, and his reputation has been damaged by the ruthless imposition of a lengthy COVID-19 lockdown in the financial hub that has been criticized as excessive.
His expected appointment appears to show that the ability to win the trust of Xi, China’s most powerful figure in decades, is the decisive factor when it comes to political progress.
As premier, Li faces a diminished role for the State Council, China’s cabinet, as Xi moves to absorb governing powers into party organs, believing the party should play a greater role in Chinese society. But some commentators believe he will be more trusted, and therefore more influential, than his predecessor, who was seen as Xi’s rival, not protégé.
“Xi Jinping does not need to worry about Li Chiang being a separate locus of power,” said Ho Pin, a veteran journalist and Chinese political observer. “The trust between them also allows Li Qiang to work more proactively and share his concerns, and will directly give Xi a lot of information and suggestions.”
Iris Pang, ING’s chief economist for China, sees Li primarily as a loyal follower of Xi’s will rather than a moderating influence.
Lee was pro-business because he had to be that way in his previous government roles, Pang said.
Its key feature, he said, is its “strong execution.”
Associated Press reporter Dake Kang contributed to this report from Beijing.