Li Qiang becomes China's premier, tasked with reviving economy
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[March 11, 2023]
By Laurie Chen and Tony Munroe
BEIJING (Reuters) -Li Qiang, the former Communist Party chief of
Shanghai, took office on Saturday as China's premier, the country's No.2
post, putting the close ally of President Xi Jinping in charge of
reviving an economy battered by three years of COVID-19 curbs.
Widely perceived to be pragmatic and business-friendly, the 63-year-old
Li faces the daunting task of shoring up China's uneven recovery in the
faces of global headwinds and weak confidence among consumers and the
private sector.
Li takes office as tensions rise with the West over a host of issues
including U.S. 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 during which his role was seen to be 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 never to have served previously in the central government,
meaning he may face a steep learning curve in the initial months on the
job, analysts said.
Still, Li's close ties with Xi - Li was Xi's chief of staff between 2004
and 2007, when the latter was provincial party secretary of Zhejiang
province - will empower him to get things done, leadership-watchers
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.
SLATE OF LOYALISTS
Xi, 69, is installing a slate of loyalists 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 largely ceremonial role, for an
unprecedented third term on Friday.
On Saturday, Li received 2,936 votes, with three votes 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 put on track to become premier in October, when he was appointed
to the number-two role on the Politburo Standing Committee during the
twice-a-decade Communist Party Congress.
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China's newly-elected Premier Li Qiang
takes an oath after being elected during the fourth plenary session
of the National People's Congress (NPC) at the Great Hall of the
People in Beijing, China on March 11, 2023. GREG BAKER/Pool via
REUTERS
Numerous other Xi-approved officials are due to be confirmed on
Sunday including vice premiers, 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 goal in nearly three decades.
Li's top task this year will be beating that target without
triggering serious inflation or piling on debt, said Christopher
Beddor, deputy China research director at Gavekal Dragonomics.
While China has not signalled plans to unleash stimulus to
jump-start growth, potential setbacks such as a collapse in exports
or persistent weakness in the property sector could force Li's hand,
Beddor said.
"The leadership has already accepted two years of exceptionally weak
economic growth in the name of COVID containment. Now that
containment is gone, they won’t 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 battered 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 wary. For the first time in 25 years of its
survey, the American Chamber of Commerce in China said early this
month that a majority of responding companies said China is 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 with
China's state planning agency had met with a vice president from
U.S. chip giant Qualcomm Inc and conveyed that it will provide a
good business environment for multinationals.
(Reporting by Laurie Chen and Tony Munroe; Editing by William
Mallard & Shri Navaratnam)
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