[Preview of China's Two Sessions] Eyes on 'Second-in-Command' Li Chang... Will the Private Sector Breathe Easier?

Among the leadership team for Xi Jinping's third term as China's president, confirmed at the Two Sessions (National People's Congress and Chinese People's Political Consultative Conference), the most notable figure is Li Qiang, a member of the Communist Party Central Politburo Standing Committee who is set to be appointed as the new premier. Based on his pro-business approach and pragmatism, there is optimistic anticipation that he could play the role of a problem solver for China's "economic growing pains."

On the 2nd, the South China Morning Post (SCMP) reported that Li Qiang is expected to be appointed as the successor to current Premier Li Keqiang following the opening of the Two Sessions on the 4th, and that his bold decisions are eagerly awaited. Li Qiang will officially assume the position as the second-ranked member of the Standing Committee through the customary premier press conference held on the closing day of the National People's Congress.

Li Qiang is one of the rare figures to ascend directly to the premier position without prior experience as vice premier. Amid numerous internal and external challenges such as supply chain conflicts with the United States, global economic slowdown, sluggish employment, and real estate downturn, his lack of experience working in the central government is seen as a drawback. Compared to Premier Li Keqiang, who was regarded as an "economic expert," Li Qiang has been criticized for having relatively less understanding of macroeconomics.

What draws public attention is his open attitude toward private enterprises. Especially during his tenure as Party Secretary of Shanghai, the economic capital, he frequently met with entrepreneurs and publicly praised them. According to SCMP, he openly expressed respect for founders of major Chinese tech companies such as Pony Ma of Tencent and Robin Li of Baidu. In September 2015, during a high-level US-China official meeting, he showed great interest in global companies by visiting Microsoft, Boeing, Google, Tesla, Qualcomm, and others. He was also instrumental in attracting the Tesla Shanghai Gigafactory, completed in 2018.

He has also demonstrated a distinctive perspective on the role of government. In a 2013 interview with Chinese economic media Caixin, he made a groundbreaking statement that "government intervention in microeconomic activities should be reduced." He emphasized that "(the government) should withdraw its overly extended hand and do what it is supposed to do."

The market is watching whether Li Qiang, with his pro-market tendencies, can stimulate private investment. Last year, China's private investment increased by only 0.9% compared to the previous year, showing a sluggish trend compared to fixed asset investment growth of 5.1%. Goldman Sachs forecasted that "the market will react based on how pro-market the number two, Li Qiang, will be."

However, there is also a view that in the Chinese Communist Party's political system, where independent judgment or policy implementation by the premier is structurally impossible, there are limits to how much his tendencies can manifest. Andrew Collier, a China analyst at Global Source Partners, pointed out, "There is room for him to accomplish great things, but everything will be done within the thoughts and tolerance of President Xi Jinping." SCMP also cited overseas analysts predicting that "Li Qiang, who was effectively Xi Jinping's chief of staff, will play the role of an executor (implementing existing policies) rather than reshaping the country's development process."