Longtime aide Li to be China’s next prime minister

Four years before Li Qiang gained notoriety when Shanghai was locked down by the coronavirus for two months, the soon-to-be China’s next prime minister was quietly working behind the scenes to push for a bold overhaul of the megacity’s sclerotic stock market.

Li’s backchannel — where sources say he bypassed the China Securities Regulatory Commission, which lost some power under the new setup — is evidence of his reputation for pragmatism and close relationship with President Xi Jinping.

In late 2018, Xi himself announced Shanghai’s new tech-focused STAR Market, as well as a pilot for a registration-based IPO system, reforms aimed at attracting China’s hottest young companies to list locally rather than overseas.

“The CSRC is very upset,” said a senior banker close to the regulator and Shanghai officials, who declined to be named due to the sensitivity of the matter.

“Li’s relationship with Xi played a role here,” allowing him to submit the plan directly to the central government without going through the China Securities Regulatory Commission, the person added.

The China Securities Regulatory Commission did not respond to a request for comment.

Li Keqiang, the former party secretary of Shanghai, will be confirmed as prime minister on Saturday at the ongoing National People’s Congress, tasked with running the world’s second-largest economy. He succeeds the retiring Li Keqiang, who is widely seen as increasingly marginalized as Mr. Xi tightens his grip on economic management.

Leadership watchers say Li Qiang’s closeness to Xi is both a strength and a weakness: While he has Xi’s confidence, he is grateful for his longtime patron.

Trey McArver, co-founder of consultancy Trivium China, said Li Shufu was likely much stronger than his predecessor.

Given Li’s inexperience in the central government and the Shanghai blockade, Mr. Xi spent a lot of political capital to get him into the role, McAver said.

“Officials know Li Qiang is Xi Jinping’s man,” he said.

“He obviously thinks Li Qiang is a very capable person and put him in this position because he trusts him and expects a lot from him.”

Li, 63, did not respond to questions sent to China’s State Council Information Office.

pragmatist

A career bureaucrat, Li was revealed as a candidate for China’s No. 2 in October, when Xi unveiled a leadership lineup of loyalists.

At the time, Li Keqiang was best known for overseeing the harrowing Covid-19 lockdown of Shanghai’s 25 million people early last year, which shut down the city’s economy and left residents psychologically traumatized. That made him a target of wrath, but it didn’t affect his promotion.

Li was also instrumental in pushing China to unexpectedly and abruptly end its zero-coronavirus policy late last year, Reuters reported on Friday.

People who have been in contact with Li say they have found him to be pragmatic, an effective bureaucratic manipulator and supportive of the private sector – for a man who has overseen some of China’s most economically dynamic regions during his career , this position is expected.

Zhou Dewen, a representative of small and medium enterprises in Wenzhou, said that from 2002 to 2004, he served as the general secretary of the Communist Party in his hometown of Wenzhou, a hotbed of entrepreneurship, and he gave the impression of being open-minded and willing to listen.

“He took a liberal approach, allowing private companies to enter the market by default, unless the law explicitly prohibits it, instead of the traditional way of defaulting to keeping private companies out,” Zhou said.

Craig Allen, chairman of the US-China Business Council and a former U.S. official, said Li tried to level the playing field for foreign companies, noting the speed with which U.S. automaker Tesla got its Shanghai factory up and running in 2019.

“Obviously, once a decision is made, there’s no barrier. His decision-making is clear and authoritative, which really helps,” said Allen, who described Lee as comfortable in his own skin.

Some observers, however, cautioned against placing too much weight on Li’s experience in business centers such as Shanghai, as Mr. Xi steadily tightened the Communist Party’s grip and steered the economy in a more nationalist direction.

“Now Li Shufu is the country’s leader, working under a market-skeptical boss, who has to balance growth with a range of social, technological and geopolitical goals,” said Neil Thomas, senior analyst at Eurasia.

no wallflower

Even by the standards of opaque Chinese politics, there is little public information about Li’s background or personal life.

Born in what is now Ruian County in Wenzhou, Li, 17, went to work at an irrigation station in his hometown in 1976, a coveted job that turned out to be the final year of Mao Zedong’s Cultural Revolution.

Li entered Zhejiang Agricultural University in 1978, the year China reopened its campuses and competition for places was fierce. Later, he received a master’s degree from the Central Party School in Beijing and the Hong Kong Polytechnic University.

It was in Zhejiang, home to some of China’s largest private companies, that Li was chief of staff to Xi Jinping’s provincial party secretary from 2004 to 2007, and the two could have developed a personal relationship.

American author Robert Lawrence Kuhn, who met Li Keqiang and Xi in 2005 and 2006, said the two got along well.

“Unlike most of the rest of the Supreme Leader’s staff, Lee is not a wallflower,” Kuhn told Reuters.

“He felt comfortable and confident in Xi Jinping’s presence and willing to reach out to me, which tells me he’s not worried that his boss might think he’s trying to upstage him,” Kuhn said.

Leadership watchers, however, say there are limits to what Li Ka-shing can do.

“Li can make some repairs here and there, but he won’t tear down the walls and build something new,” said Chen Daoyin, a former associate professor at Shanghai University of Political Science and Law and now a Chilean-based commentator.