China’s New Premier Steps Into Role Stripped Of Its Former Power

During Xi’s decade in power, the president’s name has been mentioned in the People’s Daily more than six times.

China’s New Premier Steps Into Role Stripped of Its Former Power
China’s New Premier Steps Into Role Stripped of Its Former Power

For decades, China’s premiers were towering figures in Beijing. It was Zhou Enlai who toasted then-President Richard Nixon on his historic trip to the communist-led country while Zhu Rongji was the undisputed spokesman for economic reform in the late-1990s. 

When Li Qiang, 63, finally ascends to the premier’s job Saturday, he’ll inherit a position greatly diminished in both political stature and direct authority. Perhaps no other office has lost as much under President Xi Jinping’s efforts to consolidate power than the premier, which officially leads China’s cabinet, the State Council.

Li QiangSource: Bloomberg
Li QiangSource: Bloomberg

Xi spent much of his first decade in power giving himself greater control over areas of policymaking that might’ve otherwise been dominated by Premier Li Keqiang, 67. Even now, the National People’s Congress in Beijing is wrapping up a massive restructuring expected to shift more traditional State Council policy areas to party organs. 

The question is whether Li Qiang’s long history with Xi, including a stint in Zhejiang province as the future president’s top aide, will let him play a greater role and restore the country’s No. 2 office to something resembling its former prominence. 

“The overhaul of the state is one more way for Xi Jinping to make sure he is controlling all the levers of power, which will leave little space for Li Qiang to operate independently,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis SA. Closeness to Xi “only means he will obey even more than Li Keqiang has ever done,” she said. 

Li Qiang, who isn’t related to the outgoing premier, will get a chance to preview any policy plans in his first annual news conference after the parliamentary session ends Monday — his first chance to make extensive public comments since his appointment to the Communist Party’s supreme body five months ago. Premiers usually take questions on a wide range of topics during the event, from financial reforms to US relations, helping to set policy for the year. 

Li Keqiang’s pronouncement that reform would hurt “like cutting one’s wrist” on the same stage a decade ago was a rare highlight in his otherwise low-key tenure, leading to short-lived excitement around “Likonomics.” Barely a year later, the official Xinhua News Agency portrayed Xi as the key driver of economic policy, crediting him in a magazine article for initiatives such as Shanghai’s free-trade zone. 

Li KeqiangPhotographer: Giulia Marchi/Bloomberg
Li KeqiangPhotographer: Giulia Marchi/Bloomberg

In the following years, China’s central bank shocked markets by suddenly devaluing the yuan — after the premier had repeatedly ruled out such a move. The party’s People’s Daily newspaper also published articles in which an “authoritative person” criticized the use of credit to boost growth, widely interpreted as an attack on the premier’s stimulus efforts.  

During Xi’s decade in power, the president’s name has been mentioned in the People’s Daily more than six times as frequently as Li Keqiang’s, according to a Bloomberg analysis. That compares with a 2-to-1 ratio during the previous decade when President Hu Jintao and Premier Wen Jiabao were in charge. 

China’s shrinking premiership is part of a regression of the state in favor of the party under Xi, 69. Past leaders such as Jiang Zemin tried to present a government that looked like its international peers while they pursued investment from the West. They donned business suits and ties and established an orderly system to transfer power from one generation to the next. 

China’s New Premier Steps Into Role Stripped Of Its Former Power

But that deepened complaints about power struggles between rival sides of the Zhongnanhai leadership compound in Beijing, where the president resides in the southern court and the State Council occupies the northern end. Xi has sought to end that battle, abolishing term presidential limits, emphasizing the need for security and concentrating decision-making on the party. 

Xi’s main tool has been creating party committees — so-called leading small groups — and giving them responsibility for everything from economic reform to cybersecurity. That process appears set to accelerate in the government overhaul taking shape during the National People’s Congress. 

The president is planning revive the long-disbanded Central Financial Work Commission and name his chief of staff, Ding Xuexiang, 60, to helm the body overseeing the $60 trillion financial sector, Bloomberg has reported. The commission’s past leaders include Wen, the former premier.

Another close confidant of the president’s, He Lifeng, 68, is also expected to become a vice premier responsible for economic policy, as well as the party chief of the People’s Bank of China, the Wall Street Journal reported. 

The shift has raised questions about the government’s ability to reverse policies seen as closely associated with Xi, especially after the country’s chaotic departure from his Covid Zero strategy last year. The elder Li had been seen as advocating a more growth-focused approach, even as Xi urged the country to hold the line against outbreaks. 

Li Qiang, at the same time, was busy proving his loyalty to Xi as the party’s top official in Shanghai, where he supported a controversial monthslong lockdown. He credited Xi’s guidance for helping the financial hub to “win the battle” against the virus. 

Whether Li Qiang will use his position as China’s second-most-powerful leader to soften Xi’s policies is unclear. The incoming premier was a leading advocate for accelerating the end of Covid curbs in the wake of a rare wave of protests against the policies last year, Reuters reported Friday, citing people familiar with the matter.

“Policymaking will probably become more Xi-centric and less flexible, simply because of who is occupying the premier’s role,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics. “With Li Qiang, it’s clear that his function will be to turn Xi’s ambitions and inclinations into a policy agenda, not to provide a publicly contrasting emphasis or perspective.” 

“Fundamentally,” Beddor said, “the role of premier will be only as powerful as Xi decides it should be.”

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