Ex-premier Li Keqiang, China's top economic official for a decade, dies aged 68

Former premier Li Keqiang, China's top economic official for a decade, has died of a heart attack aged 68.

Former premier Li Keqiang, a prominent figure in China's political and economic landscape for the past decade, has tragically passed away at the age of 68 due to a heart attack. Mr. Li, who served as China's number two leader from 2013 to 2023, was known for his advocacy of private businesses and his commitment to improving conditions for entrepreneurs. However, his authority was significantly diminished after President Xi Jinping consolidated power and tightened control over the economy and society.

According to CCTV, Mr. Li had been resting in Shanghai before suffering a heart attack on Thursday. He passed away at 12:10 am local time on Friday. Mr. Li, an English-speaking economist, was once considered a potential successor to then-Communist Party leader Hu Jintao in 2013. However, he was ultimately overlooked in favor of Mr. Xi.

During his tenure as China's top economic official, Mr. Li made promises to enhance the environment for job creation and wealth generation by entrepreneurs. Unfortunately, under Mr. Xi's leadership, the ruling party prioritized the dominance of state-owned industries and tightened control over various sectors, including technology. This shift in policy led to foreign companies feeling unwelcome and facing challenges in the Chinese market.

Despite being below the informal retirement age of 70, Mr. Li was removed from the Standing Committee at a party congress in October 2022. On the same day, President Xi awarded himself a third five-year term as party leader, breaking the tradition of his predecessors stepping down after ten years. This move allowed Mr. Xi to fill the top party ranks with loyalists, effectively ending the era of consensus leadership and potentially solidifying his position as the leader for life.

When Mr. Li assumed office in 2013, China was facing warnings about the decline of the construction and export booms that had driven double-digit growth in the previous decade. Government advisers urged Beijing to shift towards growth driven by domestic consumption and service industries. This required opening up state-dominated sectors and encouraging state banks to provide more loans to entrepreneurs.

Mr. Li's predecessor, Wen Jiabao, publicly acknowledged in 2012 that the government had not acted swiftly enough to address these challenges. In a 2010 speech, Mr. Li himself acknowledged the issues of overreliance on investment for economic growth, weak consumer spending, and the wealth gap between prosperous cities and the impoverished countryside.

While Mr. Li was seen as a potential candidate to revive the market-oriented reforms of the 1980s, he was known for his easygoing style rather than the hard-driving impatience exhibited by his predecessor, Zhu Rongji. Zhu's reforms, which involved painful restructuring and job cuts in state-owned industries, fueled the construction and export booms that propelled China's economic growth.

The Unirule Institute, an independent think tank in Beijing, highlighted the inefficiency of state-owned industries, with a negative 6% return on equity. However, Unirule was later shut down by President Xi as part of his campaign to tighten control over information.

In his first annual policy address in 2014, Mr. Li received praise for his commitments to market-oriented reforms, reducing government waste, combating air pollution, and tackling corruption. However, President Xi diminished Mr. Li's decision-making powers on economic matters by appointing himself as the head of a party commission overseeing reform.

While President Xi's government cracked down on corruption, imprisoning numerous officials, there was ambivalence towards economic reforms. Promised market-oriented changes were not fully implemented, and the government simultaneously promoted state-owned "national champions" and encouraged Chinese companies to rely on domestic suppliers rather than imports.

As a result, borrowing by companies, households, and local governments soared, leading to a dangerously high level of debt. In 2020, Beijing implemented tighter controls on real estate debt, triggering a significant decline in economic growth, which fell to 3% in 2022, the second-lowest in three decades.

Throughout his political career, Mr. Li faced various challenges and tragedies. As the governor and later party secretary of Henan province, he navigated the aftermath of a devastating nightclub fire in 2000 that claimed the lives of 309 people. Additionally, he faced difficulties in handling the suppression of information regarding the spread of AIDS through a blood-buying industry in Henan. China also experienced a series of deadly disasters during his term, including a gold mine landslide, a chemical warehouse explosion, and a plane crash.

Mr. Li played a crucial role in China's response to the Covid-19 pandemic, which originated in Wuhan. The government implemented unprecedented controls, restricting international travel for three years and imposing strict lockdowns on major cities. In one of his final acts as premier, Mr. Li led a cabinet meeting that announced the relaxation of anti-virus controls in November 2022, following a significant economic contraction in the second quarter of the year. Two weeks later, the government announced the lifting of most travel and business restrictions.

Born on July 1, 1955, in Anhui province, Mr. Li rose through the ranks of the Communist Party, eventually becoming ruling party secretary of a commune by 1976. He was recognized as future leadership material when he became a member of the League's Standing Committee. After serving in various party positions, Mr. Li obtained his PhD in economics from Peking University in 1994. He then held leadership roles in different provinces and ministries in Beijing, preparing him for his eventual premiership.

In conclusion, Mr. Li Keqiang's passing marks the end of an era in Chinese politics and economics. Despite his initial promise as a potential reformer, his authority was diminished under President Xi's leadership. The Chinese government's shift towards state dominance and tightening control over various sectors, coupled with economic challenges and tragic incidents, shaped Mr. Li's tenure. His legacy will be remembered as a period of significant change and challenges for China's economy and society.