Feb. 24 (Bloomberg) -- A magazine article prepared by China’s Communist Party portrays President Xi Jinping as the key driver of economic policy, adding to signs of his accumulation of power since becoming leader in 2012.
The piece cites Xi’s “important” economic statements and his efforts to moderate China’s growth rate, and credits him for initiatives such as Shanghai’s free-trade zone, without referring to Premier Li Keqiang’s role. The article, which runs to more than 8,000 Chinese characters, was published Feb. 22 by Xinhua News Agency and will run in Xinhua’s Outlook magazine.
Besides his roles as president, general secretary of the party and military chief, Xi was last year named head of a “reform leading group” spanning economic, social and political policy. The magazine article, which comes before the annual meeting of the National People’s Congress starting March 5 in Beijiing, will fuel speculation that Li is playing a smaller role in economic decisions than past premiers such as immediate predecessor Wen Jiabao.
“It seems Xi decided to allocate to himself more decision-making power and elbow Li aside,” said Willy Lam, an adjunct professor at the Center for China Studies at the Chinese University of Hong Kong. “Such change started just before the third plenum in November last year,” he said, referring to the party meeting which laid out plans for the broadest economic changes since the 1990s.
The article was written by Qi Yiming, of the Party Literature Research Office of the Central Committee of the Communist Party of China, which studies the major party leaders’ writings, careers and lives. The piece credits “comrade” Xi with big-picture vision; cites his concerns about food security, price stability and local-government debt; and reiterates a goal of protecting a “bottom line” for jobs and growth.
Analysts, academics and investors are focused on the Communist Party’s internal politics as part of assessing the likely pace of economic changes as the nation tries to shift to a new growth model. In Sydney for a Feb. 22-23 meeting of finance chiefs from the Group of 20 nations, U.S. Treasury Secretary Jacob J. Lew pressed for faster moves, while, in an interview with Bloomberg News, China’s Finance Minister Lou Jiwei pointed to the need for the U.S. to redress its own economic imbalances.
China’s economy will expand 7.5 percent this year, according to the median forecast in a Bloomberg News survey of economists, compared with 7.7 percent growth in 2013. The Shanghai Composite Index fell 9 percent over the past year.
Xi made a swifter ascent to Central Military Commission chairman than his predecessor Hu Jintao and is pushing an anti-corruption campaign that may help to expand and entrench his power. At least five people with ties to retired Politburo Standing Committee member Zhou Yongkang are under investigation over graft allegations.
“He’s the boss, he’s hands-on, he’s tended to weaken Li Keqiang’s role,” said Jean-Pierre Cabestan, a politics professor at Hong Kong Baptist University. “Xi has concentrated much more power than his predecessor.”
At the same time, Cabestan said that it would be an exaggeration to say that Li had been “sidelined,” given that he heads the State Council, China’s cabinet, and has deputy roles in the leading group for reform and in a newly created security commission headed by Xi.
The Communist Party’s planned changes range from expanding farmers’ land rights and easing the one-child policy to bolstering the role of markets in the economy, including by freeing up interest rates and loosening controls on the movement of money in and out of the country. Clouds on the outlook include risks from shadow banking, such as possible defaults by high-yield trust products.
Steve Tsang, director of the China Policy Institute at the University of Nottingham in England, said Xi has reacted to the perceived “ineffectiveness” of the Hu-Wen partnership by trying to better use the party as an instrument for governance and reform.
While Xi is now more powerful than Hu was when he stood down, “there is as yet no real evidence that Li is being weakened,” Tsang said. “Li is his subordinate and is expected by him to support him.”
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