China’s risk-averse local cadres at a loss as Beijing repeats economy-boosting plea but offers little

With the 20th party congress approaching, Premier Li Keqiang’s economy-boosting directives to local authorities ‘will have some effect, but don’t expect too much’, researcher says

Fears over potential political missteps and abrupt policy changes have resulted in political inertia as local authorities take a wait-and-see approach

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Premier Li Keqiang and President Xi Jinping toast glasses during a dinner reception at the Great Hall of the People on Friday to mark China’s National Day holiday. Photo: AP

Luna Sunin BeijingandKandy Wongin Hong Kong

Published: 9:00pm, 3 Oct 2022Updated: 11:17am, 4 Oct 2022

Local officials across China – tasked with the precarious and somewhat contradictory mission of driving economic growth against the backdrop of a crippling zero-Covid policy – have become so risk-averse that it is posing a threat to the nation’s economy, according to analysts.

Despite Beijing’s repeated pleas for local-level authorities to help ward off the economic headwinds, there appears to be a degree of political inertia as many local officials are taking a wait-and-see approach in the lead-up to this month’s twice-a-decade party congress.

Uncertainty over how China’s political leadership will shape up under President Xi Jinping has made local cadres apprehensive about costly missteps.

And this apprehension to roll out radical policy changes, even at the behest of Beijing, is hindering local economic recoveries across China, according to a Guangdong-based veteran political researcher who spoke on condition of anonymity.

“All of the businesspeople I know are struggling, with no hope in sight, and the struggle won’t end for at least another six months,” the source said. “Many people will take a wait-and-see approach from the 20th party congress to the ‘two sessions’ next year, as there might be new [policy] adjustments.

“The calls and demands from the premier will have some effect, but don’t expect too much.”

Since May, Premier Li Keqiang has been urging local cadres to put supportive policies in place to lift the economy. He has also dispatched high-ranking officials across the country to ensure that local governments do more to stabilise the economy, after the nation’s gross domestic product (GDP) growth slowed to 0.4 per cent in the second quarter.