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Politics

China ousts reformist official who called Made in China 2025 'waste'

Lou Jiwei removed from social security fund after just two years

Lou Jiwei, a former finance minister, said last month that China's flagship industrial initiative has "wasted taxpayers' money."   © Reuters

BEIJING -- Lou Jiwei has been replaced as head of China's national social security fund after criticizing the country's flagship industrial policy as having "wasted taxpayers' money," in a sign of Beijing's waning tolerance for dissent on economic issues.

Lou, a prominent reformer, spent less than two and a half years as chairman of the National Council for Social Security Fund -- the shortest stint by far in a job whose holders usually stay on for four or five years.

He is replaced by Liu Wei, a vice minister of finance, China's State Council announced Thursday. Liu is an unusual choice for a role whose occupants usually have cabinet-level experience. Four of his five predecessors -- including Lou himself -- were finance ministers, while the other previously served as governor of the People's Bank of China.

A diplomatic source here cited a South China Morning Post interview on the sidelines of the National People's Congress in March as the trigger for Lou's departure.

Premier Li Keqiang made no mention of the "Made in China 2025" industrial modernization strategy in his work report at the event, in what was seen as an effort to avoid derailing trade talks with the U.S., which has been highly critical of the plan.

In the South China Morning Post article, Lou tore into the initiative and its implementation, saying there "has been a lot of talking but very little was done."

"I was against it from the start," said Lou, a critic of massive government subsidies to specific industries. He has long advocated for the market to play a greater role in allocating resources, and Made in China 2025 is no exception.

This attack on a politically sensitive topic may have provoked the wrath of the initiative's many supporters within the Chinese government. Xin Guobin, vice minister of industry and information technology, has defended the plan by saying every country has the right to pursue its own development.

During the 1990s, Lou played a central role in economic reform under then-Premier Zhu Rongji, alongside Zhou Xiaochuan, who led the People's Bank of China from 2002 to 2018. Lou was appointed finance minister in 2013 but then abruptly sent to the social security fund in November 2016. He was reportedly angered by the move, having pledged to serve out a full five-year term.

Political discussion has long been tightly restricted in China, but the government had given more leeway on economic issues. Supporters and opponents of Made in China 2025 in academia debated the merits of the plan in the autumn of 2016.

But the country has seen a drop in free discussion of and reporting on the economy since around 2017, the year of a twice-a-decade Communist Party congress, as the government stifles dissent amid a push for party unity under President Xi Jinping.

Lou had planned to visit Japan this month to meet with Finance Minister Taro Aso, with whom he had struck up a friendship during his own stint as finance minister. The trip has been canceled.

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