Potential faces in China's new government

China's parliament will elect a new government cabinet early next year, as the current four vice premiers are all set to retire or transfer jobs.

Chinese Premier Li Keqiang. Photo: Reuters.

After the 19th Congress, Chinese President Xi Jinping has wielded unprecedented power and now faces increasing pressure to tackle the thorny problems of the $12 trillion economy, from ballooning debt, overcapacity to inefficient state-owned enterprises.

This pressure forced him to choose the most potential faces for positions in the new cabinet that will be elected by China's parliament in March next year, when many key members of the current government are about to retire, according to SCMP.

Premier Li Keqiang is likely to continue leading the Chinese government after being elected to the Politburo Standing Committee, but his three vice premiers Zhang Gaoli, Liu Yandong and Ma Kai will retire, while Vice Premier Wang Yang will move to a higher position.

Han Zheng, former Shanghai Party Secretary who was recently elected to the Politburo Standing Committee at the 19th Congress, is likely to take over as First Vice Premier, replacing Zhang Gaoli, who will retire due to age restrictions.

Starting out as a youth union secretary at a state-owned petrochemical plant, Mr. Han gradually rose through the ranks and became Shanghai's youngest party secretary in 2003. During this period, Shanghai became one of the world's busiest ports with ambitions to become a global shipping and financial center.

Considered to have extensive knowledge of China's economic and trade development process, and with the advantage of being Shanghai's party secretary, he was elected to China's most powerful Politburo Standing Committee at the recent Party Congress.

The remaining two vice premier positions are likely to go to Politburo members Sun Chunlan and Hu Chunhua. Sun could replace retiring Vice Premier Liu Yandong, while Hu Chunhua would succeed Vice Premier Wang Yang, who has been elected to the Politburo Standing Committee.

Before being appointed as Vice Premier in charge of agriculture, trade and trade relations with the United States, Wang Yang served as Guangdong’s party secretary before Hu Chunhua. During his tenure as Guangdong’s leader, Wang was known for his liberal views on economic reform, while his successor, Hu Chunhua, was more cautious, although he continued to implement many of his predecessor’s economic policies.

Mr. Han Zheng (left) and Mr. Ho Xuan Hoa. Photo: SCMP.

"I see Hu Chunhua as being less aggressive in reform than Wang Yang," said James Zimmerman, an international law expert in the Beijing office of the law firm Sheppard Mullin and former chairman of the American Chamber of Commerce in China.

Ms. Sun Chunlan is the only female member of the Politburo of China. She has held many grassroots positions such as secretary of the Dalian and Tianjin Party Committees and secretary of the Fujian Provincial Party Committee. In December 2014, Ms. Sun was appointed as head of the Central United Front Work Department, replacing Mr. Ling Jihua, who was under investigation for serious disciplinary violations.

In the new cabinet, the position in charge of economic policy is of great interest to observers. Liu He, a senior economic adviser to Chinese President Xi Jinping, is likely to replace Vice Premier Ma Kai as head of finance, as Xi builds a new team to lead the world's second-largest economy for the next five years.

Sources told SCMP that Liu, one of the 25 members of the Politburo, is likely to take over Ma’s leadership of the State Council’s Financial Stability and Development Committee, which Xi set up in November to tackle potential financial crises stemming from the debt and credit system and lax market supervision.

Mr. Liu, a graduate of the prestigious Harvard University, is considered the "chief architect" of Mr. Xi's "supply-side reform" initiative, a prominent economic policy aimed at supporting the restructuring of the Chinese economy.

In addition to cutting output, this supply-side reform policy is also aimed at dealing with the growing debt of local governments and bad debts at commercial banks. As vice premier, Liu will be able to continue to push this reform, despite his lack of experience in grassroots management.

Liu has always been a low-key person and has only held the modest position of head of the Central Leading Group on Economic and Financial Affairs and vice chairman of the National Development and Reform Commission, in contrast to his huge influence on the direction of economic policy in China.

Ms. Sun Chunhua (left) and Mr. Liu He. Photo: SCMP.

Many believe that Mr Liu was the mysterious "authority" who warned of the risk of a financial crisis from growing debt in a 2016 article in the People's Daily.

As vice premier, Liu will step out of the shadows to take a leading role in managing the economy, but many experts say his appointment is unlikely to bring about major changes in China's economic policy.

“I think these people are chosen not because their new ideas or personalities will change the Chinese economy, but because they will reinforce the direction the economy is currently going,” said Christopher Balding, an economist at Peking University’s HSBC Business School.

“If anything has changed in the past five years, it is the reversal of liberalizing reforms,” he added.

Zimmerman also said that Liu's appointment as vice premier in charge of economic affairs indicates that China will continue to implement its current economic policies. "This appointment generally suggests that the path forward will prioritize stable, sustainable growth. We will not see drastic reform moves or greater market access for foreign investors," Zimmerman said.

According to VNE