China Briefing

After powerful start, Li Keqiang's frustration grows with resistance to reforms

Premier Li Keqiang grows impatient with stonewalling officials hampering his reforms

PUBLISHED : Monday, 09 June, 2014, 5:15am
UPDATED : Monday, 29 February, 2016, 12:19pm

Does Premier Li Keqiang have the strength of character to live up to his name, which means "to become powerful"?

This is still a big question for many analysts who have closely tracked Li's stewardship of the world's second-largest economy since he came to power more than a year and a half ago.

For the first few months of his premiership, Li enjoyed a brief honeymoon with the media and enthusiastic economists who coined the term "Likonomics".

Li and his cabinet were praised for their determination to push for economic restructuring, for resisting calls for economic stimulus and for trying to rein in debt to contain financial risk.

In particular, Li staked his premiership on forcing officials to streamline and delegate government regulatory powers to allow a more decisive role for market forces in the economy. He vowed his cabinet would "display courage like a brave man cutting his own wrist" to push for restructuring.

Several months later, and buzzwords like Likonomics have vanished from the mouths of the media and economists as downward pressure on the economy gathers pace amid rising international concerns over political and economic uncertainties on the mainland.

Nowadays, Li, known for his scholarly manners, has started to show his frustration openly.

According to mainland media reports, Li chaired at least two cabinet meetings over the past two weeks to focus on ways to streamline and delegate government regulatory powers.

At one meeting, on May 30, Li reportedly pounded the table as he blasted local officials for inertia in carrying out central government directives.

He accused departments of micromanaging the economy and wasting time and resources examining and approving projects and deals that were entirely commercial matters unrelated to national security or strategic industries.

Li vowed to do whatever it took to keep his promise to remove and delegate more than 200 administrative approval procedures by year's end.

His cabinet announced last week that the central government would send inspection teams nationwide to ensure local authorities comply with Beijing's directives.

Li reportedly lamented the long-standing problem vexing mainland leaders: that central government directives never make it outside Zhongnanhai, the headquarters of Chinese leaders, meaning they are either ignored by local authorities or twisted to suit their needs.

The power of the central leadership has never been as great as the outside world believes, as vested interests and local officials resist meaningful reforms from Beijing.

Even as Li pushes for the administrative approval procedures to be abolished, local authorities can feign compliance and set up new rules to replace the old ones.

The unprecedented anti-corruption campaign under way has enabled the new leadership to instil fear in local officials and force them to pay more attention to what Beijing says, yet they still covertly put up strong resistance.

The ambitious reform drive, trumpeted by President Xi Jinping and Premier Li, is now entering a stalemate even before the real battle against vested interests and state-sector monopolies has barely begun.