China economy

China to send Xi Jinping’s right-hand man Liu He to Davos

Decision is latest sign he could be in line to become the next vice-premier in charge of economic and financial affairs

PUBLISHED : Monday, 15 January, 2018, 6:12pm
UPDATED : Monday, 19 March, 2018, 12:10pm

Liu He, top economic aide to President Xi Jinping, will lead the Chinese delegation at the World Economic Forum in Davos next week.

The decision to send Liu to the ritzy summit in the Swiss Alps resort town is the latest sign that the 66-year-old could be in line to become China’s next vice-premier in charge of economic and financial affairs.

The official Xinhua news agency confirmed on Monday that Liu would head up the delegation.

Liu is director of the Office of the Central Leading Group for Financial and Economic Affairs and a vice-chairman of the country’s top planning body, the National Development and Reform Commission.

Appointments of key positions such as China’s vice-premiers and other cabinet figures will be announced in March during the annual parliamentary session. Liu, who is widely seen as the mastermind behind Xi’s supply-side structural reform concept, was promoted to the 25-member Politburo at the 19th party congress in October.

Where will Liu He, the mastermind of China’s economic policies, go next?

Xi made a surprise appearance at Davos last year, singing the praises of free trade and globalisation. US President Donald Trump will follow in his footsteps at next week’s gathering, though his message – promoting the “America first” policy – will be quite different.

French president Emmanuel Macron is also expected to attend, and German Chancellor Angela Merkel may also join the annual four-day summit of political and business elites, which begins on January 23.

While Liu is not a direct counterpart of Trump, Macron or Merkel, the Harvard-educated Chinese official is a key decision maker on China’s economic and financial policies.

Liao Qun, chief economist at China Citic Bank International, said the decision showed Liu was now among the high-ranking officials in Beijing.

“He’s become a member of the Politburo and will be expected to oversee China’s finance and economic policies [at the National People’s Congress] in March,” Liao said. “Davos is focused on the economy, so Liu is an appropriate choice to head the delegation, even if he’s not the president. But he’s an expert [on the economy] and a high-ranking official who has a close relationship with Xi.”

Chinese leaders have in previous years used the Davos forum to send a policy message to the international community. Former premier Wen Jiabao talked up Beijing’s huge stimulus plan to counter the global financial crisis in 2009, while Premier Li Keqiang tried to ease concerns about China’s economic slowdown with a speech on the “new normal” growth that is slower and more sustainable in 2015. Two years ago, Vice-President Li Yuanchao used his appearance at Davos to defend the yuan.

How Liu He went from government researcher to Xi’s right-hand man

But this practice reached its zenith last year when Xi took centre-stage at the event, becoming the first Chinese president to attend the forum as he presented the country as a champion of globalisation.

“A trade war will only lead to suffering on both sides,” Xi told thousands of business and political leaders at the Swiss ski resort. “Those who push for protectionism are shutting themselves inside a dark house. They have escaped the rain and clouds outside, but also missed the light and air.”

Xi’s speech was widely read as a criticism of Trump and a symbol of China’s growing influence on the world stage as the US is taking a step back from global leadership.

Trump will be the first US president to attend the summit of the world’s rich and powerful in almost two decades – the last US leader seen at this gathering was Bill Clinton in 2000.

Additional reporting by Sidney Leng