China reshuffles Cabinet, appoints new vice-premiers but keeps central bank chief

Mr Xi, 69, who secured an unprecedented third five-year term as president, has stacked the Cabinet with his men to try to get the country’s Covid-19-ravaged economy back on track.

Tan Dawn Wei and Benajmin Kang Lim

Tan Dawn Wei and Benajmin Kang Lim

The Straits Times


China's National People’s Congress approved a proposed Cabinet shake-up on the second last day of Parliament’s annual full session. PHOTO: AFP

March 13, 2023

BEIJING – China reshuffled its Cabinet on Sunday and appointed new vice-premiers while keeping its economic team tasked with helping President Xi Jinping and newly minted Premier Li Qiang steer a slower-growing economy amid increasing global uncertainties.

The National People’s Congress approved a proposed Cabinet line-up on the second last day of Parliament’s annual full session, naming four vice-premiers, five state councillors, the top state planner, the central bank governor and other members of the State Council.

Mr Xi, 69, who secured an unprecedented third five-year term as president on Friday, has stacked the Cabinet with his men to try to get the country’s Covid-19-ravaged economy back on track, while boosting sagging investor confidence following government crackdowns on the private sector – from tech titans to property developers – in recent years.

Mr Li, 63, who was confirmed as premier on Saturday and is a trusted political ally of Mr Xi, and his new team will take their cue from the President to jump-start the world’s second-biggest economy amid worsening relations with the United States, which considers an increasingly assertive China a threat and rival.

Domestically, dealing with high youth unemployment, at about 17 per cent at the end of 2022 and a record 11.58 million graduates who will flood the job market in 2023, is also a headache for policymakers.

On Sunday, Parliament endorsed Mr Ding Xuexiang, Mr Xi’s right-hand man, as executive or No. 1 vice-premier, entrusting him to help manage the domestic economy.

Although Mr Ding has no experience running a province or handling economic matters at the state level, he has worked in various branches of the party apparatus and is adept at coordination.

An engineer by training, Mr Ding, whose first job was at the Shanghai Research Institute of Materials, could play an important role in driving China’s push for technological self-reliance in the face of US chip sanctions.

“I think this is a sign of a transition from economy-based leadership to science and technology,” said Assistant Professor Lee Jonghyuk, who studies Chinese elite politics at the S. Rajaratnam School of International Studies at Nanyang Technological University.

“Yes, it is a deviation from the traditional career background for the executive vice-premier without provincial experience. But it was also not a convention to appoint a premier without vice-premier experience. In the end, this is Xi Jinping’s strategy that makes the government more aligned with the party’s directions by appointing Xi’s direct allies, like Li Qiang and Ding Xuexiang.”

Former Shanghai party secretary Li Qiang skipped the intermediary step of serving as a vice-premier first before becoming premier.

At 60, Mr Ding became the youngest member of the Communist Party of China’s (CPC) 20th Politburo Standing Committee – the apex of power in the nation – during the CPC’s national congress in October 2022.

Of the seven Standing Committee members, he is the only one born in the 1960s.

The other three vice-premiers sit in the party’s 24-member Politburo, one notch below the Standing Committee.

Newly appointed Vice-Premier He Lifeng, 68, another Xi loyalist who was formerly the top state planner, is expected to be the new economic czar, taking over from the retired Mr Liu He, who was instrumental in managing the US-China trade war.

Mr He, who has a doctorate in economics, rose through the ranks in Fujian province, where he worked for 25 years, including with Mr Xi in Xiamen when the latter was vice-mayor in the 1980s.

The other two vice-premiers are former Liaoning provincial party secretary Zhang Guoqing, 58, and former Shaanxi provincial party secretary Liu Guozhong, 60, both highly capable technocrats whom Mr Xi now favours to help fulfil his ambitions of making China a techno-superpower.

As part of the Cabinet reshuffle, aerospace engineer and People’s Liberation Army general Li Shangfu, 65, was named defence minister, taking over from General Wei Fenghe, who has retired.

Former Anhui party secretary Zheng Shanjie, 61, will take over from Mr He as the country’s top economic planner.

But practically all other Cabinet members retained their positions, signalling the leadership’s desire for continuity. Most notable is the surprise retention of central bank governor Yi Gang, 65, and Finance Minister Liu Kun, 66. Both men had been expected to step down after reaching the retirement age of 65 for ministers.

Commerce Minister Wang Wentao, 58, also kept his position, as did Mr Ma Xiaowei, head of the National Health Commission, which had been responsible for China’s Covid-19 response.

In a possible sign that his handling of the pandemic was not well-received, Mr Ma chalked up the most number of votes against his reappointment on Sunday when delegates balloted for the heads of 26 ministries and agencies under the State Council.

Twenty-one parliamentarians did not endorse him for another term, while eight abstained and 2,917 voted in favour.

Nearly half of the top positions at the 26 ministries and agencies have been reshuffled in the past year.

“Xi Jinping already filled the State Council based on his preference,” said Prof Lee on the lack of significant personnel changes at the ministries during this parliamentary season.

Also, with both Mr Li Qiang and Mr Ding lacking State Council experience, “the leadership may think it is too huge an impact on the government’s capability if they changed too much by shuffling everyone”, said Prof Lee.

“It may be true that Li Qiang and Ding Xuexiang need to learn more about the operations of the State Council,” he added.

China’s new cabinet

Here are the five men who now sit at the top of the State Council:

Mr Li Qiang, 63


Mr Li, the former Shanghai party leader, skipped the traditional intermediary step of serving a term as vice-premier before becoming premier. Despite having no experience in the central government system, and also having been seen to have bungled Shanghai’s Covid-19 response last year, he was hand-picked by President Xi Jinping to be his No. 2. With Mr Xi’s trust, he could be given more room to manage the economy.

Mr Ding Xuexiang, 60

Executive Vice-Premier

Formerly Mr Xi’s chief of staff, Mr Ding lacks experience with running a province but has worked across various departments within the party apparatus and is one of Mr Xi’s most trusted aides. He started as a research fellow at the Shanghai Research Institute of Materials, and worked his way up the party ranks in Shanghai.

Mr He Lifeng, 68


Mr He, China’s former top economic planner, and Mr Xi go back decades when they served together in Xiamen. Mr He, who has a doctorate in economics, takes over from Mr Liu He as China’s new economic czar. As the previous head of the National Development and Reform Commission, Mr He oversaw major infrastructure investments to boost the country’s economic growth.

Mr Liu Guozhong, 60


Formerly the party secretary of Shaanxi, Mr Xi’s home province, Mr Liu trained as an engineer and had early in his career worked for Mr Li Zhanshu, previously the third-ranked Politburo Standing Committee member and a Xi ally. He could be given the public health portfolio vacated by just-retired vice-premier Sun Chunlan, who spearheaded China’s Covid-19 response.

Mr Zhang Guoqing, 58


Formerly the party secretary of Liaoning province, Mr Zhang belongs to a class of technocrats whom Mr Xi has filled the current wider Politburo with. Mr Zhang was previously mayor of Chongqing and Tianjin, and also chief executive of state-owned military contractor North Industries. He has a doctorate in economics from Tsinghua University, and could be tasked with overseeing industrial policy.

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