Li Qiang, who is likely to become the next prime minister, is pictured here at a major annual financial conference in Shanghai in 2020.
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Li Qiang, the former Communist Party chief of Shanghai, took office on Saturday as Chinese premier, the country’s No. 2 post, putting President Xi Jinping’s close ally in charge of reviving a battered economy. three years of COVID-19 restrictions.
Widely seen as pragmatic and business-friendly, Li, 63, faces the daunting task of cementing China’s uneven recovery in the face of global headwinds and weak consumer and private sector confidence.
Li takes office as tensions rise with the West over a host of issues, including US moves to block China’s access to key technologies and as many global companies diversify their supply chains to cover their exposure to China due to political risks and disruptions of the COVID era.
The career bureaucrat replaces Li Keqiang, who is retiring after two five-year terms in which his role was gradually diminished as Xi tightened his grip on power and steered the world’s second-largest economy in a more state-like direction.
Li Qiang is the first prime minister since the founding of the People’s Republic to never previously serve in the central government, meaning he could face a steep learning curve in the first few months of his job. , analysts said.
Still, Li’s close ties to Xi – Li was Xi’s chief of staff between 2004 and 2007, when the latter served as provincial party secretary of Zhejiang province – will help him get things done, China watchers say. The direction.
“My reading of the situation is that Li Qiang will have a lot more latitude and authority within the system,” said Trey McArver, co-founder of consultancy Trivium China.
LIST OF LOYALISTS
Xi, 69, installs a slate of loyalists in key posts in the biggest government reshuffle in a decade as a generation of more reformist 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 against and eight abstentions, according to totals projected on a screen inside the Great Hall of the People in central Beijing.
He will make his closely watched international debut on Monday during the prime minister’s traditional media Q&A after the end of the parliamentary session.
Li was put on track to become prime minister in October, when he was named number two on the Politburo Standing Committee at the two-decade Communist Party Congress.
Many other Xi-approved officials are up for confirmation on Sunday, including deputy prime ministers, a central bank governor and other ministers and department heads.
China’s economy grew by just 3% last year, and on the day parliament opened Beijing set a modest growth target of around 5% for 2023, its lowest target in nearly of three decades.
Li’s main task this year will be to beat that target without triggering serious inflation or racking up debt, said Christopher Beddor, deputy director of China research at Gavekal Dragonomics.
Although China hasn’t announced plans to unleash stimulus to revive growth, potential setbacks such as a slump in exports or continued weakness in the real estate sector could force Li’s hand, Beddor said.
“Leaders have already accepted two years of exceptionally weak economic growth in the name of the COVID lockdown. Now that the lockdown is over, they won’t accept another one,” he said.
China’s post-pandemic recovery has been uneven, with inflation in February surprisingly weak, while Chinese e-commerce giant JD.com Inc warned on Thursday that rebuilding consumer confidence will take time.
Some of Beijing’s most successful private companies such as Alibaba have been battered by brutal crackdowns and regulatory hurdles in recent years, and Li will have to work hard to restore confidence in the private sector.
Global companies are also wary. For the first time in 25 years of investigation, the American Chamber of Commerce in China said earlier this month that a majority of companies surveyed said China was no longer considered one of the “three first investment priorities”.
China is trying to put on a business-friendly face.
On Friday, Xinhua news agency reported that an official from China’s state planning agency had met with a vice president of U.S. chip giant Qualcomm Inc and said it would provide a good business environment for multinationals.