China’s New Economic Tsar Confronts Challenges in Emulating His Predecessor

By Kevin Yao and Laurie Chen

BEIJING – He Lifeng, China’s newly appointed “economic tsar,” is gaining recognition as one of President Xi Jinping’s most influential aides. However, some insiders suggest he has yet to achieve the level of respect held by his predecessor among financial markets and diplomatic circles.

At 68, He took over from the well-regarded Liu He during March’s annual parliamentary session, becoming one of China’s four vice premiers. His full responsibilities were not clearly defined until recent reports identified him as the director of a significant Communist Party economic body.

He is also expected to lead the new Central Financial Commission, China’s top financial regulatory authority, which aims to enhance the Party’s control over the country’s vast financial landscape valued at $61 trillion.

His new role places him at the forefront of addressing critical issues such as local government debt and a struggling property market—two crises that economists warn could severely hinder the long-term growth prospects of the world’s second-largest economy.

Recently, He joined Xi on a visit to China’s central bank and is actively participating in trade discussions with Washington and Europe amid escalating geopolitical tensions.

A diplomat involved in recent trade talks characterized He as “tough and uncompromising” and noted that he does not engage in discussions in English. This contrasts sharply with Liu, a Harvard-educated economist whose impact on policy often overshadowed the previous Premier Li Keqiang, who recently passed away.

Liu was credited with being a key architect of significant early industrial and financial reforms that fueled China’s remarkable economic growth. In comparison, He is perceived more as a bureaucrat focused on implementing directives from Xi.

He has maintained a low profile since his appointment, especially in contrast to Liu’s previous role, where Liu frequently gave lengthy speeches and published articles on various policy issues. Economists and investors are expressing frustration with the lack of decisive policy actions aimed at stimulating domestic consumption and addressing municipal debt challenges.

The policy adviser highlighted that He’s reserved approach is due, in part, to the diminished influence of the cabinet under Xi’s leadership, with the Communist Party taking precedence in key decision-making processes.

Having spent significant time within the economic planning system, He is expected to leverage his expertise in macroeconomic control, especially within the real economy sector. The current leadership structure is anticipated to facilitate closer coordination among the top economic planner, the central bank, and the finance ministry.

He Lifeng, a native economist, studied finance at Xiamen University from 1978 to 1984 and earned a doctorate in economics in 1998 while serving as the party chief of Quanzhou in Fujian province. His longstanding relationship with Xi began over four decades ago when they first worked together in Xiamen and later in Tianjin.

In 2014, He was appointed vice chairman of the National Development and Reform Commission, moving up to lead the agency in 2017. Since then, he has accompanied Xi on domestic visits, diplomatic meetings, and other official engagements.

According to a policy adviser, He’s loyalty and close ties to Xi enable him to receive direct policy guidance and implement it effectively. However, his notable drawback is that he lacks direct experience managing the financial sector.