President of China Xi Jinping on Saturday nominated Li Qiang to become prime minister during the ongoing annual meeting i China’s the rubber stamp parliament, a role responsible for managing the world’s second largest economy.
Li, the former Communist Party chief of Shanghai, China’s largest city, will replace Li Keqiang, who retires during the National People’s Congress session that ends Monday, after serving two five-year terms.
Li Qiang, 63, is a close ally of Xi, and served as his chief of staff between 2004 and 2007, when Xi was provincial party secretary in east China’s Zhejiang province.
The incoming Li, widely perceived as pragmatic and pro-business, faces the daunting task of supporting China’s uneven economic recovery after three years of Covid-19 restrictions, weak consumer and private sector confidence and global headwinds.
He will take office amid rising tensions with the West, including US moves to block China’s access to key technologies and as many global companies diversify supply chains to hedge their exposure to China, given political risks and the disruptions of the Covid-19 era.
China’s economy grew just 3% last year, and on the opening day of parliament Beijing set a modest 2023 growth target of around 5%, its lowest target in nearly three decades.
Li’s main task this year will be to hit that target without triggering serious inflation or piling on debt, said Christopher Beddor, deputy head of research for China at Gavekal Dragonomics.
While China has not signaled plans to unleash stimulus to jump-start growth, major headwinds such as a collapse in exports or persistent weakness in the property sector could force Li’s hand, Beddor said.
“The leadership has already accepted two years of exceptionally weak economic growth in the name of covid containment. Now that containment is gone, they will not accept another one,” he said.
China warns that there will be “conflict for sure” if the US does not reduce tensions with Beijing
Li will make his closely watched debut on the international stage on Monday during the prime minister’s traditional question-and-answer session with the media after the parliamentary session ends.
He was on his way to becoming prime minister in October, when he was named number two on the Politburo Standing Committee during the Communist Party’s once-in-five-year congress.
Xi is installing a string of loyalists in key positions amid the biggest government reshuffle in a decade, as a generation of more reform-minded officials retires and Xi further consolidates power after being elected president for an unprecedented third term on Friday.
(Reporting by Laurie Chen and Tony Munroe; Editing by Sandra Maler and William Mallard)