These Six Officials Will Shape the Future of China’s Economy

◎ Economic reform is a top priority for Xi, but he faces stiff internal opposition.

Six officials are responsible for overseeing the direction of China’s economy. And five of the six have been replaced at the recently concluded 19th Party Congress.

Why it matters: In the West, politics is at the service of the economy. In China, however, the Chinese Communist Party (CCP) controls the economy. So one of the keys to deciphering the future directions of China’s economy is the study of personnel and personnel movements. 

The key personnel overseeing economic and financial matters include the State Council premier and four vice premiers, as well as the central bank governor.

The big picture: Over the past five years, Xi Jinping and Li Keqiang appear to be “all talk, no action” on the issue of economic reform because they face stiff opposition and resistance from rival factions inside the CCP. Xi has been trying to cut through the inertia by purging the members of opposing factions via his anti-corruption campaign and installing trusted allies into key positions.  

Our take: Here is our forecast of the Chinese officials who will handle the economic portfolio for the next five years:

Potential 13th State Council Vice Premiers
No. Name Age Portfolio
1 Han Zheng 63 First-ranked vice premier in charge of overseeing finance, development and reform, land resources, environmental protection, and housing.

– Three Gorges Project Construction Committee director

– South-North Water Transfer Project director

– Food Safety Commission director

– First National Geographical Conditions and Census Leading Group director

2 Sun Chunlan 61 Vice premier in charge of education, science, culture, health, sports.

– Central Leading Group for Comprehensively Deepening Reforms member

– National Science, Technology, and Education Leading Group director

– Leading Group for Comprehensively Deepening Medical and Health System Reforms director

– AIDS Prevention and Control Working Committee director

– Academic Degrees Committee director

– Working Committee on Women and Children director

– China Soccer Reform Leading Group director

3 Yang Jiechi 64 Vice premier in charge of agriculture, water conservancy, commerce, and tourism.

– Central Leading Group for Comprehensively Deepening Reforms member

– State Flood Control and Drought Relief Headquarters commander

– National Committee for Disaster Reduction commander

– Poverty Alleviation and Development Leading Group director

– Food Safety Commission deputy director

4 Liu He 65 Vice premier in charge of industry, transportation, finance, human resources, and social security.

– Central Leading Group for the Construction of the Belt and Road Initiative director

– Work Safety Committee director

– Agriculture Work Leading Group director

– Small and Medium Enterprise Promotion and Development Leading Group director

Potential People’s Bank of China Governor
Likelihood Name Age Post
50% Guo Shuqing 61 Chairman of the China Banking Regulatory Commission
25% Jiang Chaoliang 60 Hubei Province Party Secretary
15% Liu Shiyu 56 Chairman of the China Securities Regulatory Commission
10% Yi Gang 59 Vice President of the People’s Bank of China

1. Xi Jinping’s rivals may have a slight edge over economic matters

  • We believe that Xi had to make certain political compromises to get his “Xi Jinping Thought” into the CCP constitution. So three of the four vice premiers will come from Jiang Zemin’s faction.
  • Han Zheng, the Jiang faction’s sole representative in the new Politburo Standing Committee, should formally take over the duties of first-ranked vice premier Zhang Gaoli next March.  
  • Sun Chunlan, a Jiang faction Politburo member, should take over the portfolio of her predecessor Liu Yandong.
  • Former foreign minister Yang Jiechi, a Jiang faction Politburo member, should take over the duties of new Politburo Standing Committee member Wang Yang. Yang may continue to handle some diplomatic matters.
  • Politburo member Liu He is Xi’s key economic advisor and a trusted ally. Liu should take over the financial portfolio from former vice premier Ma Kai.

2. Guo Shuqing is favorite to succeed outgoing central bank governor Zhou Xiaochuan.

3. If Guo and Liu He get the portfolios we listed above, they will be well-positioned to implement Xi’s plans for financial sector reform.

4. Economic reform is a top priority for Xi, but he faces stiff internal opposition.

  • Many of the Chinese officials who rose rapidly through the ranks during the Jiang era engaged in corrupt practices. After Xi rolled out his anti-corruption campaign, however, these officials found themselves in danger of arrest and punishment.
  • In the past five years, Chinese officials have been passively resisting Xi by resorting to tactics such as refusing to implement policies or feet dragging. Thus Xi was unable to push through economic reforms.
  • In order to successfully reform the economy, Xi will very likely focus the anti-corruption efforts on the finance sector in his second term. 

Contact us to learn about our officials perspective analysis.