Li Keqiang: quiet man facing economic test

Listen to this article

00:00
00:00

Like most Chinese leaders, Li Keqiang has had to have patience as he clambered up the ranks of the Communist party. Now, after 30 years, the man this week appointed premier has little time to lose. The world’s most populous country and second-largest economy is crying out for reform – and it is up to Mr Li to deliver.

In the carefully calibrated party hierarchy, he plays second fiddle to Xi Jinping, the new president. Yet while the head of state sets the overall direction of China’s 10-year leadership terms, it is the premier who is responsible for the economy. So it falls to 57-year-old Mr Li to answer a formidable chorus – from domestic liberals and private companies to foreign investors – calling on the new government to rein in the state’s dominant role in the economy, strengthen the rule of law and tame corruption.

To many overseas, the past decade is the story of the remarkable ascent of an economic powerhouse. But inside the country there is talk of a “lost decade” and increasing disillusionment, especially among the urban middle classes, over rising property prices, pollution and an overbearing state. The leadership must fix this or face the prospect that China’s largely peaceful rise will become more problematic.

Mr Li appears to recognise the need for change. At his first cabinet meeting this week, it was decided that all ministries must “solidly advance reform, and let the people see practical results through a series of real achievements”. Following a meeting with the premier this week, Jack Lew, the new US Treasury secretary, said it is “clear” China “has made a clear commitment to their reform agenda” – before adding that the challenge would lie in delivering “material progress”.

This is not a first time a new premier has promised change. Ten years ago, Wen Jiabao, Mr Li’s predecessor, pledged to make the economy more equitable, humane and sustainable. He failed to deliver. By the time he left office his pleas for political reform had become little more than reminders of inertia.

Reformers hope Mr Li will be in the mould of Zhu Rongji, premier from 1998 to 2003 and architect of some of the country’s boldest reforms, including a large-scale privatisation programme. Such expectations have been heightened by the elevation of Mr Zhu’s former underlings to critical positions in the new cabinet. They include Lou Jiwei, former head of the sovereign wealth fund, who has been named finance minister.

But Mr Li himself is also seen as something of a new type of leader. “In many ways, you have the first premier who has received systematic training in economics,” says Yang Dali of the University of Chicago.

Born in 1955 in Dingyuan, central China, Mr Li came of age during the cultural revolution. Like many of his generation he was sent, aged 19, to the countryside to do manual labour. But unlike those a few years older, the option of higher education was open to him as universities began to accept undergraduates again. Competition for places was fierce but, in 1977, he was one of the lucky ones to win a place at Peking University Law School alongside only two other men from Anhui, his then poor home province, where his father was an official.

“From the beginning he was interested in economic law and he tried to acquire practical knowledge by getting a position as a trainee in China International Trust and Investment Corporation – the only window to the world in the late 1970s,” says Tao Jingzhou, one of the other two from Anhui, now a partner at Dechert Law Firm in Beijing.

Mr Li read A.V. Dicey, an expert on British constitutional law, and helped translate the “Process of Law” by Lord Denning, an influential British judge. After his law degree, he acquired a PhD in economics. His academic path sets him apart from earlier leaders, many of whom were engineers.

This distinction feeds some of the criticism of Mr Li. “Look at his record, and you will know that he has a serious problem with execution,” says a western executive in Beijing. “He has none of the determination Zhu Rongji had.”

Friends say that Mr Li has always been quiet and cautious. Even in pictures from his student days, he tends to appear on the margins. “At that time he was a very quiet and low-profile guy – in group discussions, he would be the very last to talk and he was actually quite shy; certainly not outspoken or aggressive,” recalls Mr Tao.

The standard career path for officials may have reinforced that tendency. The long march through the various layers of party and government bureaucracy taught Mr Li to bide his time and keep a low profile. A party member since his days in rural Anhui, he rose through the Communist Youth League. This made him a protégé of Hu Jintao, Mr Xi’s predecessor, who dominates the youth league faction, one of the main groups in the party. He acquired a reputation for loyalty, but not without a pragmatic touch. In 1989 he helped persuade Peking University students from joining the protests at Tiananmen and later did not actively persecute demonstrators.

In 1998, Mr Li continued his ascent through provincial governor and party secretary posts in the populous central province of Henan and the northeastern rust belt of Liaoning, before becoming a member of the politburo, and its powerful Standing Committee in 2007.

Supporters cite his transformation of slum-like areas in Liaoning into decent housing as his main economic policy achievement during his time in the provinces. But critics accuse him of helping to cover up an HIV epidemic in Henan, and also point out that Mr Wen’s second term was also Mr Li’s term as vice-premier.

Until now, those in China’s second-highest official role have enjoyed public support as the “people’s good premier”, says Chang Ping, a prominent journalist in Germany. But he says that model may not work for Mr Li as the disillusioned public no longer plays along.

The writer is the FT’s Beijing correspondent

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.