China’s top legislature ‘deliberates’ on new nominations, as leadership reshuffle stokes market turmoil
- The National People’s Congress (NPC) standing committee, which convened a meeting from Wednesday to Sunday, may have begun political appointments
- The NPC’s early approval of vice premiers could include those responsible for the economy, pandemic control, science and technology as well as foreign trade
Following days of market turmoil, all eyes are on the appointment of China’s top economic aides, who will be responsible for guiding the country through coming economic storms and continuing Xi Jinping’s grand modernisation strategy.
While Li Qiang, now China’s No 2 in the party hierarchy, will take the premiership in March, the naming of senior government roles might have already begun, enabling appointees to get to grips with economic challenges, plan policy priorities and ensure a seamless transition.
As of last year, the standing committee of the National People’s Congress (NPC), which has convened a meeting from Wednesday to Sunday, was vested with the powers to approve vice-premier nominations and confirm some of the new economic team.
They have gathered to review laws, amendments, examine financial work and “deliberate on relevant [personnel] appointments and removals”, according to an official statement.
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None of the current crop of State Council leaders, including Premier Li Keqiang, vice-premiers Han Zheng, Sun Chunlan, Hu Chunhua and Liu He, are likely to sit in the next cabinet.
Analysts do not expect one-for-one replacement this time around because new divisions of labour are needed to fit into Beijing’s development priorities, including dual circulation, tech innovation, pandemic control, stronger state-owned enterprises and common propriety – pillars of Xi’s road map to modernise the country by the middle of the century.
Ding Xuexiang is most likely to become the executive vice-premier, which is normally reserved for a member of the Politburo Standing Committee – China’s highest decision-making body. Ding, now ranked No 6 in the party hierarchy, is almost certain to get the position.
One rank below Ding, He Lifeng, now a Politburo member, may fill another vice-premier position, in charge of financial work and largely taking over from Liu He. Traditionally, the premier will have four supporting deputies. This leaves two more seats to be filled after Ding and He.
A precondition for the vice-premier post is that the candidate must be a Politburo member.
The size of the Politburo has been reduced to 24, one fewer than before. The other two premiers could take charge of pandemic control, science and technology, foreign trade and rural development.
Or President Xi could break the convention and have someone in charge of diplomacy as the premier, given the rising importance of foreign affairs to China’s development. It would most likely not be a like-for-like replacement of the last cabinet.
All these could happen earlier than expected or according to tradition. The premier appointment, however, still needs to wait until the full sessions at the annual parliamentary gathering in March.
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The NPC’s early approval of vice premiers “is likely, but won’t have much significance because the transition [in the State Council] should have started, and power is held in a variety of leading groups,” said a Chinese economist keeping track of the leadership reshuffle.
“The poor economic performance was largely owing to the pandemic. I believe that the control policy will be adjusted soon after the Party Congress. There’s no reason for it not to be relaxed,” the person said.
“A policy that can yield immediate effects would be either a cancellation notice or an exit timetable.”
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Chen Gang, assistant director of the East Asian Institute at the National University of Singapore, said hot contenders for vice premiers are concentrated in the Politburo, including Li Ganjie, environment minister-turned party boss of Shandong province; Yuan Jiajun, an engineer-turned politician and former commander of Shenzhen who was in charge of China’s manned space programme.
Another option could be Zhang Guoqing, who climbed the ranks of state firms and headed old industrial hubs Chongqing, Tianjin and Liaoning.
“[Politburo member] Yin Li is likely to be a vice-premier due to his public health background,” said Chen. “He may be the key person to decide China’s future Covid policy, and professionalism will be important for future decision making in the State Council.”
In the past, the incoming premier or vice-premier would only be finalised at the annual meeting of the top legislature, which is in March next year, though they could have taken part in December’s Central Economic Work Conference and setting annual targets in the government work report delivered to nearly 3,000 NPC delegates.
Xi’s solidification of power, Beijing’s zero-Covid policy and doubts about commitments to reform and opening up have led to a massive sell-off of Chinese assets in Shanghai, Hong Kong and New York over the past two days.
Goldman Sachs said in a report on Sunday that incoming leaders could arguably be more focused on ideological and political subjects, and this may also apply to two key positions, which are premier and vice-premier in charge of economic and financial affairs. Both are influential to capital markets.
The final list of senior government appointees is expected to align with the key messages in the party congress, which “carry a strong flavour of development with Chinese characteristics and national security”, the investment bank said.
Key ministerial posts will also be vacant, as central bank governor Yi Gang, finance minister Liu Kun, banking regulator Guo Shuqing and foreign exchange regulator Pan Gongsheng are all set for retirement.
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The position overseeing foreign trade and investment has also drawn attention, as many foreign-funded companies are frustrated at what they see as an uneven play field, data security and disruptions to supply chains due to Covid controls.
Wang Wentao, the current commerce minister, might also have a chance at the State Council.
The commerce ministry now lays claim to two Central Committee members, Wang and his current deputy Wang Shouwen, whereas conventionally the ministry should have only one.
Several officials of vice-minister rank were appointed on Monday in the reshuffle, including one vice-minister for the environment, two vice commerce ministers, one deputy central bank governor and the head of the national railway bureau.
