Li Keqiang and the market economy

likeqiangby Ma Junjie

From Central Asia to Southeast Asia, from South Africa to the Balkans, Mr. Li Keqiang was a goodwill ambassador who bore more than one gift to his friends, old and new in 2014. He paid official visits to more than 10 countries, including Greece, from Asia, Europe and Africa. Accordingly, he attended more than 270 events in 30 days. At least 250 collaborative projects were signed, which were said to have brought in a potential revenue of more than $140 billion. These projects range from energy, infrastructure, and finance.[1] Some celebrate him as China’s super salesman. However, taking what he achieved in 2014, Mr. Li Keqiang is by far a very successful champion of market economy for China.

Mr. Li Keqiang is said to be an economic liberal, as many linked his economic policies to the fact that he was a student of Professor Li Yining, a prominent economist who proposed liberal design for China’s marketization. As some of the achievements since he took office, his policies are mostly pro-market, which is also indicated in the Decision of the Third Plenary Session of the 18th CPC Central Committee. [2] Even though “Likonomics”, a term coined by Barclays Capital to describe his policy that features less government stimuli, lower credit, and initializing structural change, was criticized when the four trillion RMB stimuli package was issued, his policy still deserves to be celebrated as it shifted the social conditions towards a more liberalized market economy.

In 2014, Mr. Li Keqiang also had very good communication with the business circlesof China. He invited Chinese entrepreneurs to join him in seminars and meetings, for five times. Many scholars, including famous pro-market economists, also enjoyed the pleasure of having a cup of tea in Zhongnanhai. It is said that they discussed topics including innovation, restructuring, high-tech industry, and finance.[3] To hear the voice of entrepreneurs, Mr. Li Keqiang has set a good example for Chinese political leaders. For years, Chinese entrepreneurs have been the driving force of social progress, economic development, and technical innovation. However, they are mostly depicted as bloodsucking capitalists who have a low social status. Now that China’s GDP growth is slowing down, the economy relies more on the creativity of entrepreneurs.

Mr. Li Keqiang showcased that the new administration took a different approach to handling its domestic problems by external activities, such as directing investment overseas, and shifting excessive capacity at home to countries that need roads, power plants, and high speed railways.This strategy allows China to obtain a so-called “New Growth Point”, a new front where economy can be boosted. In the period of New Normal, what matters for sustainable growth is not the conventional growth pattern, but the restructuring of the economy, and the up-gradation of the industries.

His overseas visits enhanced the foreign policy of China. In recent years, especially with the escalating tension with neighboring countries, China has been seeking an alternative for its foreign policy. Trade, as the means and end of foreign policy, finally comes to the sight. Now it proves that by forming new alliance, and establishing new trade ties, China is becoming more and more important as a business and strategic partner. As this fruitful year comes to an end for Mr Li Keqiang, with more uncertainty in terms of economy for the coming year, Mr Li has a lot to do. As long as he keeps pushing the economy towards a more harmonious market, he will be fine.