Exclusive Insight: He Lifeng and his successor: Who will lead China's “mini State Council”?
China tells big tech companies not to offer ChatGPT services; China’s economic support for Russia could elicit more American sanctions; China Urges State Firms to Drop Big Four Auditors on Data Risk
Welcome to today's issue of The China Brief, where we bring you the latest developments and trends in China's economy, politics, and society. In this issue, we explore the US warning that China's economic support for Russia could trigger more American sanctions, China and Russia challenging the US-led world order, China urging state firms to drop big four auditors, and China telling big tech companies not to offer ChatGPT services.
And here’s today’s exclusive insight:
He Lifeng and his successor: Who will lead China's “mini State Council”?
China's National Development and Reform Commission (NDRC), also known as the "mini State Council," a key part of the economic cabinet. The current director of the NDRC is He Lifeng, a Fujian native who has joined the Politburo and is about to become vice premier, in charge of the economy and finance, taking over Liu He's portfolio.
For close to a decade, He Lifeng has been at the helm of the NDRC, an integral component of the economic cabinet that holds comparable significance to half of the State Council. He rose to the position following his transfer to the NDRC as a deputy director at the ministerial level, under Zhang Gaoli, the former party secretary of Tianjin, who had just taken over as executive vice premier a decade ago. Prior to that, He Lifeng, a Fujian native and alumnus of Xiamen University, had been working in Tianjin. He Lifeng's appointment as director came in early 2017, after Xu Shaoshi, the then NDRC director, and a former subordinate of Wen Jiabao at the Ministry of Land and Resources, retired. Since then, He Lifeng has remained the incumbent director.
The selection process for the new director of the NDRC has yielded two promising candidates. The first is the incumbent party secretary of Anhui Province, Zheng Shanjie, hailing from Fujian and with a strong track record in both the Xiamen and Fujian branches of the NDRC. The second is Wang Wentao, the current Minister of Commerce and a Jiangsu native who has long been based in Shanghai, and is also a close associate of Ding Xuexiang. By appointing Zheng, the NDRC would uphold the tradition of having a Fujian native in charge, thus facilitating the work of He Lifeng. On the other hand, selecting Wang would serve to limit He Lifeng's authority while simultaneously testing Wang's capabilities.
As He Lifeng's new position also falls within the State Council's system, it would not be logical to completely sever him from his original team. Consequently, it is likely that Zheng will take over the NDRC, led by a representative of the Fujian faction with other factional members joining the team. It is common for vice directors of the NDRC to hold ministerial-level positions. Wang Zhijun, who is a member of the 20th Central Committee and presently serves as the full-time deputy party secretary of Heilongjiang Province, is the top contender for the position of the first vice director.
Wang Zhijun's expertise as a skilled economic document drafter and speechwriter, combined with his previous work experience at the Office of the Central Leading Group for Financial and Economic Affairs, has given him a solid background for the role of Vice Director at the NDRC. He had been promoted to bureau-director-level official as the fifth bureau's (planning bureau) director, tasked with developing the nation's five-year plan. Later on, he served as a deputy minister of industry and information technology before moving to Heilongjiang as a deputy party secretary. If he were to be appointed as Vice Director at the NDRC, which is a ministerial-level position, he would have the opportunity to interpret key documents for the media before and after important meetings.
Li Chunlin, the incumbent vice director of the NDRC who took up the post at the start of this year, also deserves a mention. Li shares a native hometown with Liu Guozhong, one of the prospective vice-premiers, and was his secretary when Liu held the position of party secretary of Shaanxi Province. Bringing in the subordinates of Liu He and Liu Guozhong to constrain the Fujian faction from becoming too powerful is consistent with the personnel arrangement strategy of the Politburo, as well as the Premier and Vice-Premiers, as previously discussed in our past reports of The China Brief. As for the other vice directors of the NDRC who are close to their retirement age, their announcements will be discussed in future reports.
(The author of this article is Lao Zong. The article is provided exclusively for The China Brief.)
NYT: China’s economic support for Russia could elicit more American sanctions
The US is warning that China's economic support of Russia during the war against Ukraine, particularly through shipments of dual-use products that can be used for both civilian and military purposes, could elicit further sanctions. China has been a crucial economic partner for Russia, providing goods including electronics, vehicles, and computer chips. US officials are now concerned that China may provide Moscow with lethal weapons. While the US has tried to crack down on the trade of dual-use technologies, it has proved hard to police, and Russia's economy has been able to continue functioning. Relations between the US and China have been further strained by the situation.
WSJ: Russia, China Challenge U.S.-Led World Order
Recent events on the international stage indicate the fragile state of great-power relations as Russia and China challenge the US-led global order, and there are prospects that they could deteriorate further. Putin, announced the suspension of its participation in the last remaining nuclear-arms treaty between Moscow and Washington. Meanwhile, China's top diplomat, Wang Yi, criticized the US at a security conference in Germany before arriving in Moscow, where he is expected to propose a summit between Putin and China's Xi Jinping. Both China and Russia have a common interest in weakening the US's dominance of the world order, and their partnership could solidify geopolitical competition between the West and the Moscow-Beijing axis. Furthermore, the developments signify greater stress for the international system as Washington and its allies contend with a rising China, which has provided an important economic lifeline to Moscow, and a revanchist Russia seeking to renegotiate the end of the Cold War.
During a visit to Europe, China's top diplomat, Wang Yi, called for Europe to display its "strategic autonomy" and criticized the US for having strategic goals larger than Ukraine itself. Wang said that China would soon disclose a plan for peace in Ukraine and argued that legitimate security concerns must be taken seriously. Some European governments are interested in Chinese involvement in a peace proposal due to Beijing's sway in Moscow, but a quick ceasefire could benefit Russia, while China might not be willing to push Russia seriously, according to a German foreign-policy analyst.
Bloomberg: China Urges State Firms to Drop Big Four Auditors on Data Risk
The Chinese government has urged state-owned enterprises (SOEs) to stop using the big four international accounting firms to phase out their use of the companies. The move came despite China having recently agreed to allow the US to audit hundreds of Chinese firms listed in New York. The guidance was given to some SOEs by the finance ministry and other government departments as recently as last month. The SOEs were advised to let their contracts with the big four expire and to hire local Chinese or Hong Kong accountants instead. The move is aimed at bolstering China’s accounting industry and data security. No deadline has been set for the changes, and replacements may happen gradually as contracts expire.
Nikkei: China tells big tech companies not to offer ChatGPT services
Regulators have instructed major Chinese tech companies, including Tencent and Ant Group, not to offer access to ChatGPT services to the public due to growing concern in Beijing over the AI chatbot's uncensored responses to user queries. ChatGPT, developed by Microsoft-backed startup OpenAI, is not officially available in China, but some users have been able to access it using a VPN. In response to the regulatory pressure, Tencent has suspended several third-party services, regardless of whether they were connected to ChatGPT or not. China's clampdown on ChatGPT comes amid tensions between the US and China, and China's state-owned media has warned that the chatbot "could provide a helping hand to the US government in its spread of disinformation."
FT: Chinese lithium prices fall 30% as demand for electric vehicles weakens
Chinese lithium prices have fallen by nearly 30% over the past three months due to weaker demand in the country's electric vehicle (EV) market. The two-year rally for the crucial battery component has been punctured by concerns over the strength of EV demand in China, including reduced subsidies and low household confidence, which is tied to the country's property crisis. While waning Chinese demand has raised doubts over the tightness of the lithium market this year, Chinese lithium prices still remain eight times the level a year ago and have further to fall before they get close to the cost of production.
That's it for today's issue of The China Brief. If you like our content, please subscribe and let us know in the comments section! Join us next time for more news and analysis on China's evolving economic, political, and social landscape.