CHINA-LEADERSHIP: CHINA'S THREE NEW ECONOMIC COMMISSIONS AND LEADERSHIP AFFILIATIONS
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China has three new economic/finance committees under the Party’s aegis. Two are old and
one is new, but all have the word “central” in their titles. The European Think-Tank Marco
Polo analysed the entities as follows:
First, the Central Finance and Economic Commission (CFEC). Helmed by General Secretary
Xi Jinping, it’s the oldest commission that’s been around since the 1980s. When it convenes,
it sets the big picture and ideological direction on the economy. What happens here gets
enshrined in Party documents, like Xi’s 2015 supply-side reforms. Second, the newly
established Central Finance Commission (CFC). Sitting just below the CFEC, the CFC
ostensibly controls the banking regulators and makes decisions on capital allocation. While
Premier Li Qiang leads the CFC, Marco Polo is uncertain whether that actually means he’s
more empowered. Third, the Central Finance Work Commission (CFWC). It got a second lease
on life after it was put on ice in 2003. Its original mission was to break up interest groups and
it will likely serve similar disciplinary functions in this incarnation. Vice Premier He Lifeng is
the “enforcer-in-chief” leading the CFWC.
Marco Polo said: "He Lifeng’s place on all three commissions (director x 2, chair x 1) and his
long-time relationship with Xi Jinping all but confirm his rise as a top confidante on economic
affairs. We know that when it comes to personnel, Xi puts a premium on personal trust. So just
how close are Xi and He Lifeng? Close enough that He was invited to Xi and Peng Liyuan’s
wedding in 1987. They became comrade-in-arms during the 80s when both served in Xiamen.
Xi deferred to He on economic matters even then, and when he started climbing the political
ladder, Xi never left He behind. During their Xiamen tenure, He introduced Xi to his graduate
mentor Deng Ziji, a scholar known for advocating state-led economics. Deng Ziji shaped
China's 1994 tax reform and influenced Xi, He, and former Finance Minister Liu Kun. Xi and
He have publicly credited Deng’s influence. As a close Xi ally, He will have Xi’s ear in coming
years. His influence can already be seen in the seven State Council appointments he has
shepherded through, including NDRC head Zheng Shanjie. This likely sets up Zheng as He’s
successor to the Vice Premiership in 2027. While He may have Xi’s ear, who has He’s ear is
just as important. But that might be harder to come by these days as “fincrats” (finance
technocrats) in the bureaucracy have been depleted. Nearly 80% of officials with finance
backgrounds left the Central Committee (CC) in 2022. To compensate for the dearth of fincrats
on the CC, Beijing has brought in personnel like Wang Jiang as deputy director of CFC and
CFWC. His experience includes cleaning up the 2023 Everbright debt crisis, which will come
in handy in dealing with property/local debt problems. So, it looks like it’s going to be “He
said, Xi said” on economic affairs for the foreseeable future. He has also clearly taken on the
US-China economic portfolio, so we will be seeing a lot more of him. It has taken about a year
for the new economic team to be put in place. Now it’s done; can they effectively manage the
risks to China’s financial system and reboot growth?"
(Comment: CCAS analysis is that the following are closely affiliated to He Lifeng and owe
their rise to him: (i) Lan Fo'an - Finance Minister; Li Yunze - NFRA Director; Luo Wen -
SAMR Director; Pei Jinjia - Veteran Affairs Minister; Tang Dengjie - Civil Affairs Minister;
Wang Xiaohong - Public Security Minister; and Zhang Shanjie - NDRC Director.)
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