[China Economic Dilemma] ③ Eyes on Second-in-Command Li Qiang... "Pragmatist and Xi Loyalist"

From Storage Facility Worker to Growth in 40 Years
Then Became Shanghai Party Secretary and Premier in Just 7 Years

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] As China’s zero-COVID policy prolongs and its economic situation worsens, all eyes are on one figure. Li Qiang, appointed as the 'number two' after the 20th National Congress of the Communist Party of China, is the Shanghai Party Secretary. He has inherited the contradictory task of 'zero-COVID and economic normalization' from Premier Li Keqiang.

The greatest burden on Li Qiang’s shoulders is the damaged Chinese economy. While trade and manufacturing indicators could quickly improve as pandemic restrictions ease and reopening is decided, sluggish real estate development investment and consumer sentiment have significantly deviated from a stabilization trajectory.

According to China’s National Bureau of Statistics, retail sales in September this year increased by only 2.5% year-on-year, showing a weaker trend than the previous month (5.4%), and cumulative real estate development investment through September plunged 8% compared to last year. As the main pillars driving the economy shake, achieving this year’s annual economic growth target of 5.5% has become difficult. The International Monetary Fund (IMF) has lowered China’s growth forecast for this year to 3.2%. The IMF projects 4.4% growth next year and 4.5% in 2024.

Critics argue that Li Qiang lacks the capability and expertise to resolve the complex global challenges compounded by sluggish growth drivers, the US-China trade conflict, and the Ukraine war. In fact, most of his administrative career from 1976 to 2016 was spent solely in Zhejiang Province. His first job was as a mechanical drainage equipment worker in Mayi District, Rui’an County, Zhejiang Province. He then climbed the ranks step-by-step through roles such as tool factory worker, county-level committee cadre, and rural relief office cadre in the civil affairs bureau, eventually catching the attention of President Xi Jinping.

It took 40 years for him to rise from equipment worker to provincial governor, but after 2016, he rapidly ascended to Jiangsu Party Secretary, member of the Central Political Bureau, Shanghai Party Secretary, and finally Premier (March 2023) within just seven years. His lack of central political experience and the unusual leap over the vice-premier position are considered his vulnerabilities.

On the other hand, he is a 'former chief of staff' who understands President Xi’s intentions better than anyone, and there are expectations that he will appropriately fulfill the role of Premier based on his deep-rooted regional networks and market experience.

Li Qiang leveraged strong networking to attract Tesla’s Shanghai Gigafactory (completed in 2018) and led the establishment of the STAR Market, known as the 'Shanghai Nasdaq,' in 2019. The Shanghai lockdown, once cited as a reason for his dismissal, is now regarded as an achievement. The regions where he has worked?Zhejiang (6.5%), Jiangsu (10.2%), and Shanghai (3.8%)?account for 20.5% of China’s total GDP, reflecting significant market influence.

Thanks to nearly three years of economic stagnation, there is speculation that Li Qiang could achieve the most noticeable results among the third-term leadership by riding the 'base effect.' Investment demand eagerly awaiting China’s reopening could flow in simultaneously with policy easing. Foreign investors repeatedly bought and sold between September 25 and October 7, a period marked by alternating hopes and disappointments regarding pandemic controls,

and the net selling volume during this period was limited to 3.84 billion yuan (approximately 733.1 billion won), lending support to such expectations. The Wall Street Journal described Li Qiang as "a pro-business pragmatist and a loyalist who aggressively implements policies," adding that "as he takes on his new role (Premier), he will be questioned about which side of this duality will prevail."