Li Qiang, likely to become the next premier, is seen here speaking at a major annual financial conference in Shanghai in 2020.
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Li Qiang, the former Shanghai Communist Party chief, took office Saturday as China’s premier, the country’s No. 2 post, putting a close ally of President Xi Jinping in charge of reviving an economy hit by a three-year COVID-19 slowdown.
The 63-year-old Li, widely seen as pragmatic and pro-business, faces the daunting task of supporting 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 range of issues, including US moves to block China’s access to key technologies and as many global companies diversify supply chains to hedge their China exposure due to political risks and the disruptions of the COVID era .
The career bureaucrat replaces Li Keqiang, who is retiring after two five-year terms in which his role was seen 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 first premier since the founding of the People’s Republic who has never previously served in the central government, meaning he may face a steep learning curve in his first months on the job, analysts said.
Still, Li’s close ties to Xi — Li was Xi’s chief of staff between 2004 and 2007, when the latter was provincial party secretary in Zhejiang province — will allow him to get things done, leadership observers said.
“My reading of the situation is that Li Qiang will have a lot more leeway and authority in the system,” said Trey McArver, co-founder of consulting firm Trivium China.
CHANGE OF LOYALISTS
Xi, 69, is putting a number of loyalists in key posts in the biggest government shakeup in a decade as a generation of more reform-minded officials retires, further consolidating power after being unanimously elected president, a largely ceremonial role, for an unprecedented role. third period 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 debut on the international stage on Monday during the premier’s traditional media question-and-answer session after the parliamentary session ends.
Li was set to become premier in October when he was named number two on the Politburo Standing Committee during the biannual Communist Party Congress.
Numerous other Xi-approved officials are to be confirmed on Sunday, including the vice premier, a central bank governor and other ministers and department heads.
China’s economy grew just 3% last year, and on the opening day of parliament Beijing set a modest 2023 growth target of around 5%, the lowest target in nearly three decades.
Li’s main task this year will be to beat that target without triggering serious inflation or accumulating debt, said Christopher Beddor, deputy director of China research at Gavekal Dragonomics.
While China has signaled no plans to unleash stimulus to boost growth, potential setbacks such as a collapse in exports or continued weakness in the property sector could force Li’s hand, Beddor said.
“Leadership has already accepted two years of unusually weak economic growth in the name of COVID containment. Now that containment is gone, they will not accept another,” 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.
Some of Beijing’s most successful private firms, such as Alibaba, have been hit by steep crackdowns and regulatory hurdles in recent years, and Li will have to work hard to restore confidence in the private sector.
Global business is also on alert. For the first time in 25 years of its survey, the US Chamber of Commerce in China said earlier this month that a majority of responding companies said China was no longer seen as a “top three investment priority”.
China is trying to present a business-friendly face.
On Friday, the Xinhua news agency reported that an official from China’s State Planning Agency had met with a vice president from US chip giant Qualcomm Inc. and conveyed that it will provide a good business environment for multinational companies.