BEIJING: Four years before Li Qiang gained notoriety as the force behind the two-month COVID-19 lockdown of Shanghai, the man who became China’s premier on Saturday worked quietly behind the scenes to drive a bold revamp of the megacity’s sclerotic stock market.
Li’s back-channelling sources said he bypassed the China Securities Regulatory Commission, which lost some of its power under the new set-up demonstrated what became a reputation for pragmatism as well as close ties with President Xi Jinping.
In late 2018, Xi himself announced Shanghai’s new tech-focused STAR Market as well as the pilot of a registration-based IPO system, reforms meant to entice China’s hottest young firms to list locally rather than overseas.
“The CSRC was very unhappy,” said a veteran banker close to regulators and Shanghai officials, declining to be named given the sensitivity of the matter.
“Li’s relationship with Xi played a role here,” enabling him to present the scheme directly to the central government, without going through the CSRC, the person added.
The CSRC did not respond to a request for comment.
Previously the Communist Party chief in Shanghai, Li was confirmed as premier during the National People’s Congress, charged with managing the world’s second-largest economy. He replaced the retiring Li Keqiang, widely perceived to have been sidelined as Xi tightened his grip on the management of the economy.
Leadership watchers say Li Qiang’s closeness to Xi is both a strength and a vulnerability: while he has Xi’s trust, he is beholden to his long-time patron.
Trey McArver, the co-founder of consultancy Trivium China, said Li is likely to be much more powerful than his predecessor.
Xi expended significant political capital to get him into the role, given Li’s lack of central government experience and the Shanghai lockdown, McArver said.
“Officials know that Li Qiang is Xi Jinping’s guy,” he said.
“He clearly thinks that Li Qiang is a very competent person and he has put him in this position because he trusts him and he expects a lot of him.”
Li, 63, did not respond to questions sent to China’s State Council Information Office. (Int’l Monitoring Desk)