Economy

Yes minister

Li Keqiang pounds the table to make his point

China's Premier Li Keqiang drinks during a news conference in Beijing

Cooling off

During Wen Jiabao’s final press conference two years ago, the outgoing premier shed light on the worst-kept secret in Chinese politics. “Policies cannot make their way out of Zhongnanhai,” Wen told the media mob, referring to the walled compound housing the Beijing leadership. “I feel deeply distressed.”

Wen was talking about house prices, which had continued to run up despite repeated policy intervention. He noted that the State Council had introduced six major measures to regulate the market as early as 2003, eight more in 2005, and then six more in 2006. (Similar directives were issued in 2010 too.) Each flurry had encountered “massive resistance” as local governments ignored them, he confessed.

Wen only admitted to his frustration at the end of his 10-year tenure. His successor as premier Li Keqiang is getting vocal a lot sooner – perhaps out of frustration that local intransigence is hampering his own policy agenda. An article on the central government’s website (www.gov.cn) last week gave a glimpse of Li’s mood. Headlined “The State Council won’t issue empty decrees”, it offered unusual insights into a meeting on May 30 when governors of several provinces reported to the Chinese cabinet.

Li got straight to the point. “I’ve noticed on my field trips at local levels that there are places where government officials just fail to do their job,” he was quoted as saying. “Some of them would rather not do a stroke of work so long as there aren’t any problems to disturb them.”

Critical remarks like that don’t normally filter through to the state media.

Soon the wider press was scrambling to find out more. “Have you all implemented the State Council’s policies? Have you each taken your responsibility? Or should I remind you of your duty?” CBN quoted Li as also demanding.

Citing unnamed sources, the newspaper said that two similar meetings were held over the past fortnight and that Li had even pounded the conference table to make his point more forcefully.

Li’s governing style seems different to many of his predecessors. During Wen’s final five years in office, journalists and investors waited to see if there were any market-moving directives coming from the State Council’s executive meetings. By contrast, Li’s cabinet has been less interventionist. His approach is also distinct from Zhu Rongji, whose first move as premier was to centralise fiscal power (see WiC239). Devolution of tax-raising powers, on the other hand, is one of the current government’s priorities this year.

Li’s recent outburst may have been sparked by another of his priorities being resisted. The South China Morning Post’s Wang Xiangwei reckons local government has proved reluctant to eliminate more than 200 administrative approval procedures that the premier vowed would be gone by year-end. “The ambitious reform drive is now entering a stalemate even before the real battle against vested interests and state-sector monopolies has barely begun,” Wang writes.

Of course, political power is a relative concept. Hong Kong’s Oriental Daily reckons that Chinese President Xi Jinping has consolidated so much power personally that it gives the impression that Li is weak. Xi is head of state, the Party and the PLA. He heads the newly-created National Security Commission, as well as the leading group on the “comprehensive deepening of reform”.

Last month it took his personal visit to the Shanghai free trade zone – long-regarded as Li’s brainchild – to convince many outsiders that the project has potential and full government backing (see WiC239).

The China Daily posits that the Xi-Li team is working well but that the scale of the reform challenge is throwing up a new paradox. “The transition requires a government that is decentralised in some ways and at the same time more centralised in others,” it says.

Meanwhile Li’s table-pounding is also a reminder of the limitations of Beijing’s writ, especially for those who think that China’s leaders can press an Orwellian button and convey their every command to the smallest hamlet.

If only it was that simple, Li must be thinking…


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