March 14 (Bloomberg) -- Xi Jinping was named China’s president by the national legislature, replacing Hu Jintao in the country’s most rapid formal transfer of power in more than a generation.
Xi, 59, added the largely ceremonial title of president to his portfolio today after taking over the top post in the ruling Communist Party as well as chairmanship of the party’s military commission in November. It took Hu almost two years to get all top three positions. Jiang Zemin, who ruled China before Hu, had to wait almost four years to assume all the top posts.
The appointment of Xi cements a power transition that was thrown into turmoil last year when Bo Xilai was expelled from the ruling Politburo and his wife convicted of murdering a British businessman. Having all the formal positions gives Xi a leadership mandate in a system where retired leaders still hold sway, said Kerry Brown, a former British diplomat in Beijing.
“The party secretary is the bones, this is the covering of flesh,” said Brown, now a professor at the University of Sydney. “Granting Xi the full suite so quickly is a big deal -- it shows huge confidence in him by the party elders and across factions.”
The National People’s Congress elected Xi by a vote of 2,952 to one, with three abstentions, for the first of what are expected to be two five-year terms. Li Yuanchao, 62, the former head of the party’s organization department and who studied at Harvard University’s John F. Kennedy School of Government, was appointed vice president.
Today’s voting kicks off three days of appointments for top ministries, regulators and other government offices as the party assembles its next generation of leaders. Li Keqiang, currently vice premier, is forecast to replace Wen Jiabao tomorrow as premier, taking stewardship over the economy.
As head of state, Xi will take the global stage later this month when he visits Russia, Tanzania and South Africa, where he is set to represent China at the meeting of the BRICS group of emerging-market nations in Durban.
Xi inherits a country that is wealthier and militarily more powerful than during the leadership change a decade ago. In 2002, China was dueling with Italy for seventh spot among the world economies. Its 51.9 trillion yuan ($8.3 trillion) gross domestic product last year is second in size only to the U.S., while its military budget is set to rise 10.7 percent this year to 740.6 billion yuan.
At the same time, income inequality has risen to 0.474 in 2012 as measured by the Gini coefficient, statistics bureau data showed. That’s above the 0.4 level analysts use as a gauge for social unrest.
In December, Xi visited a poor region of northern China’s Hebei Province and pledged to spread the benefits of China’s economic growth. Li Keqiang was in southeastern China’s Jiangxi Province at the same time, vowing to cut the gap between rich and poor.
China’s economy expanded at the slowest pace in 13 years last year, as the government seeks to move away from an investment-driven model focused on public-works spending toward more consumption and increased productivity.
“The basic problem with the economy is that while growth is sustainable, it is deeply unfair and the system needs to shift to undergo the tricky transition from a mobilization to an efficiency focus,” said Anthony Saich, a professor at Harvard’s Kennedy School who oversees a program to train Chinese officials and executives.
Finance Minister Xie Xuren was elected as a member of the top legislature’s standing committee, according to an announcement made today at the annual gathering of the National People’s Congress.
Lou Jiwei, head of China’s sovereign wealth fund, is the leading contender to become the next finance minister, two people with knowledge of the matter said today. His potential appointment was reported at the end of last month by Caixin, which didn’t say where it got the information.
Lou, 62, became the first head of China Investment Corp. in 2007 after a stint as vice finance minister. CIC was founded that year with an initial $200 billion infusion from the Ministry of Finance and a mandate to improve returns on the nation’s foreign reserves.
An e-mail sent to CIC’s Beijing-based media office seeking comment wasn’t immediately answered today. The Finance Ministry’s press office also didn’t return phone calls.
Guo Shuqing, chairman of the China Securities Regulatory Commission, may be appointed as governor of eastern Shandong province, the South China Morning Post reported yesterday. An earlier Reuters report said Guo may become head of China Investment Corp.
The party plans to keep Zhou Xiaochuan as head of the People’s Bank of China, a person with direct knowledge of the discussions told Bloomberg News last month. Bank of China Ltd.’s Chairman Xiao Gang may become party secretary of the central bank, Reuters reported Feb. 20.
Vice president since 2008, Xi belongs to the fifth generation of leaders after Chairman Mao Zedong from 1949 to 1976, Deng Xiaoping in the late 1970s and 1980s, Jiang in the 1990s and Hu since 2002. His assumption of the top government, military and party posts in such a short period of time has no precedent in the three decades since Deng opened the country to foreign investment and began to dismantle the command economy.
When Jiang took over the party in June 1989 following the crackdown on student demonstrators on Tiananmen Square, Deng still held the top party post and a military leader, Yang Shangkun, held the presidency.
The last leader to take the formal reins so quickly was Hua Guofeng, who assumed the party’s chairmanship, the premiership and the top post in the military in the months before and after Chairman Mao’s death in 1976. By late 1978, Hua was being pushed aside by Deng, and by 1981 he had lost all of his leadership positions.
Li Yuanchao, the son of a former Shanghai vice mayor and a fluent English speaker, was party secretary of Jiangsu Province, one of China’s richest regions, before moving to the Politburo in 2007. His age means he may step down after one five-year term like Xi’s predecessor as vice president, Zeng Qinghong, did in 2008.
Xi may bring a change of style to the presidency from Hu, who rarely showed emotions in public appearances. During a visit to Iowa in February, 2012, Xi spent time with people who hosted him there in 1985, recalling how surprised they were that he watched movies such as “The Godfather.” He also told former U.S. Ambassador Clark T. Randt Jr. that he liked the movie “Saving Private Ryan,” according to a 2007 cable disclosed by Wikileaks.
Xi can also be blunt on trips abroad. Talking to members of Mexico City’s Chinese community in 2009, Xi said there were “foreigners with full bellies who have nothing better to do than pointing fingers at us,” according to the official Xinhua News Agency.
“First, China does not export revolution, second, it doesn’t export hunger or poverty, third, it doesn’t cause you any headaches,” he said. “Just what else do you want?”
Xi’s wife, Peng Liyuan, a former People’s Liberation Army folk singer, lends Xi some star power. Until his 2007 appointment to the elite Politburo Standing Committee marked him as a future leader, many Chinese were more familiar with Peng, who was a regular on China’s televised Lunar New Year festivities.
Born in Beijing in 1953, Xi is the son of Xi Zhongxun, a fighter in Mao’s revolution who was purged in 1962 and went on to become a vice premier after his rehabilitation in 1978. Xi Zhongxun helped shepherd China’s economic emergence in the late 1970s and early 1980s as party secretary of Guangdong province.
The younger Xi was sent to rural Shaanxi province during the 1966-1976 Cultural Revolution. He then attended Beijing’s Tsinghua University, also Hu Jintao’s alma mater, and served as a military aide in Beijing before taking party and government posts in northern China’s Hebei province and southeastern China’s Fujian, where he rose to the post of governor, according to his official biography.
He became Communist Party secretary in 2002 of eastern China’s Zhejiang province, where he championed the growth of private enterprise. He served there until 2007, when he moved to Beijing to join the party’s Politburo Standing Committee after a brief tenure as Shanghai party chief. He was named vice president in 2008 and also served as head of the party’s top training school.
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