China’s parliament approves Li Qiang as prime minister

Li Qiang, the former head of the Shanghai Communist Party, took office on Saturday as China’s prime minister, the country’s second-in-command, putting President Xi Jinping’s close ally in charge of reviving an economy battered for three years. restrictions due to the Covid-19 pandemic.

Widely considered pragmatic and business-friendly, Li, 63, faces the daunting task of sustaining China’s uneven recovery in the face of global headwinds and weak consumer and private sector confidence.

Li takes office as tensions with the West rise 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 protect their exposure to China due to political risks and Covid-era disruptions.

The career bureaucrat replaces Li Keqiang, who is retiring after two five-year terms, during which his role has steadily diminished as Xi has tightened his grip on power and steered the world’s second-largest economy in a more statist direction.

Li Qiang is the first prime minister since the founding of the People’s Republic to have never previously served in the central government, meaning he could face a steep learning curve in his first few months in office, analysts said.

Still, Li’s close ties with Xi — Li was Xi’s chief of staff from 2004 to 2007, when he was provincial party secretary in Zhejiang province — will enable 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 within the system,” said Trey McArver, co-founder of consultancy Trivium China.

list of loyalists

Xi, 69, is installing a list of supporters in key posts in the biggest government reshuffle in a decade as a generation of more reform-minded officials retires and he further consolidates power after being unanimously elected president, a role largely ceremonial, to 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 debut on the international stage next Monday, during the traditional media question and answer session after the end of the parliamentary session.

Li was put on track to become prime minister in October, when he was appointed to the number two position on the Politburo Standing Committee during the twice-a-decade Communist Party Congress.

Several other Xi-approved officials are expected to be confirmed on Sunday, including deputy prime ministers, a central bank governor and other ministers and department heads.

uneven recovery

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%, its lowest target in nearly three decades.

Li’s main task this year will be to hit that target without triggering severe inflation or accumulating debt, said Christopher Beddor, deputy director of China research at Gavekal Dragonomics.

While China has not signaled plans to unleash stimulus to boost growth, potential setbacks such as a collapse in exports or a lingering weakness in the real estate sector could strain Li’s hand, Beddor said.

“The leadership has already accepted two years of exceptionally weak economic growth in the name of containing Covid. Now that containment is over, they will not accept another one,” he said.

China’s post-pandemic recovery has been uneven, with February inflation unexpectedly low, 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 companies, like Alibaba, have been hit by abrupt 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 cautious. For the first time in 25 years of its survey, the American Chamber of Commerce in China said earlier this month that a majority of responding companies said China is no longer seen as a “top three investment priorities.”

China is trying to put on a business-friendly face.

On Friday, the Xinhua news agency reported that an official from China’s state planning agency met with a vice president of the American chip giant Qualcomm Inc and communicated that it will provide a good business environment for multinationals.