Li Keqiang, China former Premier, has passed away.
He leaves in his wake a embattered China trying to find its place as it continues to cement its position in the global arena.
In contrast to China’s existing paramount leader, Xi Jinping, Li was known for supporting a more open market economy and advocating supply-side reforms, a strategy often referred to as “Likonomics”.
This vision was however never fully realised.
Li belongs to a generation of political leaders who received their education during a period marked by a more receptive attitude towards liberal Western concepts and ideologies.
Li’s stance in favour of private ownership and foreign investment stands in contrast to Xi’s emphasis on state ownership, highlighting their differing ideological perspectives.
Assuming the role of the top economic official, Li had vowed to enhance the environment for entrepreneurs contributing to job creation and prosperity.
However, during Xi’s tenure, the ruling party amplified the influence of state-run enterprises while intensifying its grip on the technology and various other sectors.
During the October 2022 party congress, Xi solidified his authority by removing Li from the Standing Committee, and restructured the Politburo Standing Committee with his closest confidants.
Li’s vision of an open economy was replaced by Xi’s emphasis on the concept of common prosperity and increased state intervention.
With Li’s passing, there exists the possibility of China’s economic policies veering away from a market-oriented approach, potentially favouring diminished market forces.
This paternalistic approach can prove to be a deterrent for investors both within and outside the country.
A Changing China
Li’s tenure as the head of the State Council of China saw the country witness a series of significant events, including the 2008 Financial Crisis, P2P lending, and the rise of blockchain.
These challenges likely shaped Li’s perspective during his time in office.
During his term Li headed the State Council and was one of the leading figures behind China’s Financial and Economic Affairs, Foreign Affairs, National Security and Deepening Reforms.
Li held various crucial positions during his term, overseeing China’s Financial and Economic Affairs, Foreign Affairs, National Security, and the implementation of deep-reaching reforms.
In addition, Li and his cabinet introduced the “Made in China 2025” strategic plan in May 2015, aimed at enhancing China’s manufacturing capabilities and technological innovation.
Xi’s Intense Crackdown
Xi has been cracking down on large tech firms and the real estate industry.
Recently, rumours have linked Li Keqiang to the foreign debt guarantee of China’s richest man, Xu Jiayin, who is a real estate billionaire.
Therefore, Li’s death have been speculated to be connected to the real estate crackdown.
Online rumors have found Li associated to the foreign debt guarantee of China’s richest man, Xu Jiayin, though these allegations have never been verified.
Xu Jiayin, the largest shareholder of Evergrande Group, and one of China’s largest real estate developer, has a net worth of estimated $1.7 Billion, was once Asia’s richest person.
Born in 1958 to a modest rural family, Xu Jiayin’s early years were influenced by the aftermath of the Great Leap Forward.
Following his graduation from university in 1982, Xu Jiayin dedicated the next ten years to honing his skills as a steel technician.
Subsequently, he transitioned into a sales role for a property developer based in the city of Guangzhou in southern China.
It was during this time that Xu Jiayin laid the foundation for what would eventually become Evergrande, which he founded in 1996.
Xu was a Communist Party member for over three decades, attained the esteemed position of being elected as a member of the Chinese People’s Political Consultative Conference in 2008.
This group comprises of distinguished government officials and accomplished business leaders.
In the year 2020, Beijing implemented fresh regulations aimed at restraining the debt levels of prominent real estate developers.
As a result of the new regulations, Evergrande resorted to significant property discounts to sustain its operations.
However, the company grapples with debt repayments.
Consequently, its stock market valuation has plummeted by 99%, leading to a substantial decline in Xu’s wealth.
Could Li Keqiang have been assassinated because of such guarantees?
Some consider the theory too far-fetched – we find this likely improbable.
Consider these facts:
Li and his faction suffered a comprehensive defeat during the National People’s Congress elections earlier this year.
It is unlikely and unneeded for the senior members of the Communist Party of China to take action against a former premier who has already lost power.
Li also purportedly had bad blood with real estate developers – he was culturally associated with the rampant bankruptcy of ordinary citizens due to his policies relating to real estate.
The senior members of the Communist Party of China would have had legitimate means to handle Li Keqiang without resorting to assassination.
Li passed away in Shanghai after suffering a myocardial infarction while swimming.
The incident occurred on the afternoon of October 26 at a fitness center in the eastern suburbs of Shanghai.
Li experienced a sudden cardiac event and myocardial ischemia, prompting an urgent transfer to Shanghai Shuguang Hospital.
The transportation restrictions en route caused significant traffic congestion in Shanghai.
Under the leadership of Shanghai Municipal Party Secretary Chen Jinin, a collective effort by cardiac surgeons from three top Shanghai hospitals, Shuguang, Renji, and Huashan, was made to perform emergency surgery.
Despite their best efforts, Li passed away in the evening of October 26 at Shuguang Hospital.
According to sources close to Coinlive, due to recent events in the real estate sector, Li Keqiang had poor sleep quality and an extremely irregular lifestyle.
This potentially contributed to his heart stopping while swimming, leading to his untimely demise.
At present, the Chinese economy is at its lowest point, and public confidence is notably shaken.
The recent significant drop in the stock market is seen as a consequence of various policies implemented during Li Keqiang’s tenure.
The future of the Chinese economy in the aftermath of Li’s passing remains uncertain.