Closer Look: Xi’s Leadership of Top Economic Group Follows Pattern

06.20.2014 18:22

Closer Look: Xi’s Leadership of Top Economic Group Follows Pattern

While Xinhua set a precedent by naming the members of the key party body, the fact it is led by the general secretary is unsurprising

By staff reporter Wu Peng

(Beijing) – Communist Party general secretary Xi Jinping’s chairmanship of a top economic decision-making group has generated discussion about his expanding power and role in China’s reforms.

Xi is the chairman of the Leading Group for Financial and Economic Affairs, an economic decision-making body comprising top party leaders and government officials, Xinhua reported on June 13, the day the group met for the sixth time in Xi’s administration. For the first time ever, Xinhua listed all the members in the group, including party No. 2 Li Keqiang, its vice chairman.

The party has several leading groups of this sort to handle decision-making for various fields, including public security, rural affairs and ideology.

The news that Xi was atop this group took some people by surprise. As the top figure in the party, Xi already wears multiple hats. He heads the leadership groups for deepening reform, Internet security and information, and the national security commission. The news indicates the man who already enjoys the most political power granted by the constitution also presides over several vital fields, ranging from national security and foreign affairs to social management and economics.

Some media reports said Xi’s taking the position was unusual because it is more often held by the premier, in this case Li.

But Southern Weekend, a newspaper in Guangdong Province, published an article correcting this misconception on June 19. It said the job has been held by the party’s general secretary since 1987, citing several sources close to the group and retired senior officials. Former party general secretary Jiang Zemin held the position, and Hu Jintao took over after him. The premiers of those administrations acted as vice chairs of the group.

A premier did lead the financial and economics group for a short period in the past. In early 1980s, Zhao Ziyang led the top economic decision-making body of the day. Back then it was the Finance and Economics Commission under the State Council, the country’s cabinet. The commission was reformed and became the current leadership group around that time. When Zhao was promoted to party general secretary he kept the chairmanship of the commission. His successor, Jiang, continued to hold the position after the leadership transition in 1989. In other words, Xi and Li are following a decades-old tradition.

The group plays an essential role in setting five-year plans, drafting government work reports, organizing central economic meetings and providing guidance on economic policies. Other members of the body are typically on the 25-member Politburo, the party’s second highest decision-making group, who handle economics matters; senior officials from the State Council; and other senior officials from economic planners.

Besides Xi, Li and Vice Premier Zhang Gaoli, others who attended the meeting included vice premier Liu Yandong, Wang Yang and Ma Kai; the director of the Central Policy Research Center, Wang Huning; the director of the party’s General Office, Li Zhanshu; central bank governor Zhou Xiaochuan; the ministers of water, housing, land resources, and industry and information technology; and representatives from foreign affairs and the military.

Nonetheless, the leadership line-up signals the party continues to put its most senior man in the job.



About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (, a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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