Li Keqiang, China’s prominent economic figurehead for a decade, passed away on Friday at the age of 68 due to a heart attack. During his tenure from 2013 to 2023, Li championed private businesses but faced a diminishing role as President Xi Jinping consolidated his authority, tightening control over the nation’s economy and society.
The news of Li’s death was confirmed by CCTV, reporting that he had been in Shanghai, resting recently when he suffered a heart attack on Thursday and passed away at 12:10 am on Friday.
Li, an English-speaking economist, had been considered a potential successor to then-Communist Party leader Hu Jintao in 2013. However, he was passed over in favor of Xi Jinping, who amassed power in an unprecedented manner, centralizing authority in his own hands and diminishing the influence of Li and others on the party’s ruling seven-member Standing Committee.
As China’s top economic official, Li pledged to enhance conditions for entrepreneurs, who contribute to job creation and economic growth. Nonetheless, under Xi’s leadership, the dominance of state-owned industries increased, and tighter control was exerted over technology and other sectors. This shift led foreign companies to feel less welcome in China, as Xi and other leaders advocated for economic self-reliance, expanded anti-spying regulations, and conducted raids on consulting firms.
In a surprising move, Li was omitted from the Standing Committee at a party congress in October 2022, despite being two years below the informal retirement age of 70. On the same day, Xi awarded himself a third five-year term as party leader, breaking with the tradition of his predecessors stepping down after ten years. He stacked the top party positions with loyalists, signaling a departure from consensus leadership and potentially establishing himself as a leader for life. Li Qiang, the party secretary for Shanghai, took the No. 2 position, despite lacking Li Keqiang’s national-level experience and stating that his role was to carry out Xi’s decisions.
Li Keqiang assumed office in 2013 as China’s economy faced warnings that the construction and export booms, which had driven double-digit growth over the previous decade, were losing momentum. Government advisors stressed the need to shift towards growth driven by domestic consumption and service industries. This would require opening up more state-dominated sectors and compelling state banks to lend more to entrepreneurs. Li’s predecessor, Wen Jiabao, had publicly apologized in 2012 for not implementing reforms quickly enough.
In a 2010 speech, Li acknowledged various challenges, including overreliance on investment for economic growth, weak consumer spending, and a significant wealth gap between prosperous eastern cities and the impoverished countryside, home to 800 million people.
Li was initially seen as a potential advocate for revitalizing the market-oriented reforms of the 1980s, initiated by then-supreme leader Deng Xiaoping, which had ignited China’s economic boom. However, he was known for his relaxed and easygoing style, in stark contrast to the hard-driving approach of Premier Zhu Rongji, who had carried out painful reforms that reduced millions of jobs in state-owned industries.
Li was believed to support the “China 2030” report, released by the World Bank and a Cabinet research body in 2012, which called for significant changes to reduce the dominance of state-owned industries and rely more on market forces.
In his inaugural policy address in 2014, Li was commended for his commitment to market-oriented reforms, reducing government inefficiency, tackling air pollution, and addressing the pervasive corruption that had eroded public trust in the ruling party. However, Xi stripped Li of his authority over economic matters by appointing himself to lead a party commission responsible for overseeing reform.
While Xi’s government initiated an anti-corruption campaign, imprisoning numerous officials, including former Standing Committee member Zhou Yongkang, it displayed ambivalence toward economic reforms. Promised market-oriented changes were left unfulfilled, and state-owned banks and enterprises saw an increase in their dominance.
Some industries, such as electric car manufacturing, were opened up to private and foreign competition, but the government also encouraged the development of state-owned “national champions” and promoted the use of domestic suppliers over imports. This led to a rise in corporate, household, and local government debt, raising concerns about China’s already dangerously high debt levels.
In 2020, Beijing tightened controls on real estate debt, causing a significant drop in economic growth, which reached a mere 3% in 2022, the second-lowest in three decades.
Li’s leadership in Henan province from 1998 to 2004 was marked by a series of unfortunate events, earning him the nickname “Three Fires Li.” During his tenure, three fatal fires occurred in the province, including a tragic nightclub blaze on Christmas Day in 2000, which claimed the lives of 309 people. Despite these incidents, Li escaped unscathed.
Li’s tenure was further marred by efforts to suppress information about the spread of AIDS via a blood-buying industry in Henan. His reputation for bad luck persisted as China experienced various deadly disasters during his term, such as a landslide in Tibet, a chemical explosion in Tianjin, and a plane crash.
Li also played a crucial role in China’s response to COVID-19, which first emerged in Wuhan. Unprecedented controls were imposed, resulting in international travel restrictions for several years and periodic lockdowns of major cities.
In one of his final official acts, Li presided over a Cabinet meeting in November 2022, announcing the relaxation of anti-virus controls to mitigate disruptions following a 2.6% economic contraction in the second quarter. Two weeks later, the government declared the end of most travel and business restrictions.
Born on July 1, 1955, in the eastern province of Anhui, Li’s political journey began in 1976 when he became the ruling party secretary of a commune in his hometown. He pursued a law degree at Peking University, serving as the campus secretary of the Communist Youth League, an organization that launched the political careers of former party leaders Hu Jintao and Hu Yaobang. Li’s Ph.D. in economics from Peking University was conferred in 1994.
Following his time in Henan, Li served as party secretary for Liaoning province in the northeast, as part of a rotation through provincial posts and ministries in Beijing, aimed at preparing leaders. He joined the party Central Committee in 2007.
Rest In Peace!
