ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter

Xi buddy Liu set to leapfrog his way into China's leadership

Advisers Liu He, far left, and Wang Huning, far right, flank Chinese President Xi Jinping at a summit with U.S. President Barack Obama in Washington on March 31. (CCTV image)

TOKYO -- The Chinese Communist Party's next national congress is still a year and a half off, but already speculation is intensifying over what new faces will emerge in the party leadership when it gathers in Beijing's Great Hall of the People for the twice-a-decade event.

     There is good reason for all the crystal-ball gazing: The Communist Party wields the real power in China, so those faces will be the country's next leaders.

     Five of the seven current members of the Politburo Standing Committee, the party's top decision-making body, are set to retire at the autumn of 2017 event. This team of party all-stars is led by President Xi Jinping, who concurrently serves as the party's general secretary. Xi and Premier Li Keqiang will remain on the committee beyond 2017. That means Xi's successor may well be one of the new members ushered in at the national congress.

On the outs?     

There is a theory swirling about in Chinese political circles that the March 31 summit between Xi and U.S. President Barack Obama in Washington offered clues about what kind of personnel changes to expect.

     The leaders met on the sidelines of an international nuclear security summit. Their meeting ran longer than planned -- about an hour and 40 minutes -- as the presidents locked horns over the South China Sea dispute and other issues.

     On April 1, an evening news program broadcast by the state-run China Central Television showed footage of Xi and Obama facing each other at a conference table, each man flanked by aides. Near the Chinese president were his advisers Wang Huning and Liu He.

     The program showed the footage at length, occasionally zooming in on Liu. For many Communist Party officials, the images were revealing. Normally, Wang, a veteran political adviser and member of the Politburo, would have been seated beside Xi. But the footage showed a confident-looking Liu, an economic adviser, filling that role, with Wang relegated to a second row of chairs behind the table. 

     Wang has advised three successive Chinese presidents: Jiang Zemin, Hu Jintao and Xi. He played a key role in promoting Jiang's political theory of the "Three Representatives" and Hu's political theory of the "Scientific Outlook on Development."

     An intellectual "all-rounder," Wang is one of the 25 members of the Politburo. He was a professor at Shanghai's prestigious Fudan University before being tapped by Jiang as an adviser.

     Liu currently serves as the director of the Office of the Central Leading Group on Financial and Economic Affairs, the Communist Party's top panel on economic affairs. He also doubles as vice chairman of the government's National Development and Reform Commission.

     A member of the Communist Party's Central Committee, Liu ranks far below Wang on paper. Which makes his and Wang's places at the table so unusual, given how strictly the leadership usually abides by the party hierarchy.

     It is no mere coincidence that Wang was similarly relegated to the sidelines when Xi met with South Korean President Park Geun-hye in Washington immediately after his talks with Obama.

     "The CCTV footage indicates that Liu will very likely get an unusual promotion at the Communist Party's next national congress," said one Chinese political source.

     Liu's expanding role within the party also points to a brighter political future. "Liu is already taking over some of Wang's duties," said another source familiar with China's policymaking process.

     It is already known that Liu writes Xi's speeches about economic matters. But according to the source, he is poised to become more actively involved in politics, including promulgating the top Chinese leader's political theory.

     There are now whispers that Liu is being groomed for membership in the Politburo, and perhaps even a position in the standing committee, when the party convenes in autumn 2017.

     Of the seven committee members, only Xi and Li will stay on after next year's party confab. Assuming Liu gets the nod, that means only four more seats are up for grabs. Party rules state that Politburo Standing Committee members have to retire if they are 68 years old when the national congress rolls around.

     Liu will be 65 and Wang 62 at next year's party congress. It would be a huge break from convention if Liu received a big promotion while the younger Wang stepped down. It is possible that the current retirement system will be revised so that Xi can extend his reign beyond the party's national congress in 2022.

Bosom buddies

Recalling a conversation he had with Liu nearly two decades ago, one Japanese businessman said, "Liu was a mild-mannered, no-nonsense scholar. I couldn't imagine that he would be such a rising star."

     Liu's ties with Xi run deeper than just party affiliation; they are in fact childhood friends. Both graduated from the prestigious Beijing 101 Middle School, where many senior Communist Party and military officials send their children. It is said that Liu is one of a handful of people Xi truly trusts.

     After graduating from the elite Tsinghua University in Beijing, Xi worked at the Central Military Commission, the highest military organ and which commands the armed forces. Liu also has military ties. He once served in the 38th Army, a unit of the Chinese People's Liberation Army that is known for bravery and responsible for the defense of Beijing. Their shared military backgrounds is likely another reason the two are so tight.

     Liu attended Harvard's John F. Kennedy School of Government and is purportedly well-versed in U.S. economic affairs and has strong personnel connections in that country.

     In 1998, he founded the Chinese Economists 50 Forum, a civil academic organization with polemicists as its members, including Justin Yifu Lin, a former senior vice president of the World Bank, and Wu Jinglian, a prominent reformist economist.

     Around that time, Liu began solidifying his position as a key architect of Chinese economic policy. But it was not until the 2012 inauguration of the current leadership headed by Xi that he became famous as a powerful economic adviser to the country's leader.

     Brainstorming sessions at the forum Liu founded have significantly impacted China's foreign policy. It was one of those sessions that sparked the "One Belt, One Road" initiative to create an economic zone linking China to Europe and Africa by land and sea. The idea was initially discussed as a purely economic policy aimed at securing export markets for Chinese materials and other products amid oversupply at home. But it evolved into a comprehensive external strategy encompassing political, diplomatic and security areas as well. Liu is said to have played a key role in that process.

     It was also Liu who oversaw the drafting of a statement issued at a key meeting of senior party officials in November 2013 that incorporated the Xi regime's medium- and long-term economic policies.

Liu He's official title is director of China's Office of the Central Leading Group on Financial and Economic Affairs, but his real power extends far beyond that. (Image from Chinese government website)

     Liu's prominent positioning next to Xi at the meeting in Washington is not the first time the president has played up his confidant's importance on the global stage. When then-U.S. national security adviser Thomas Donilon was visiting Beijing in 2013, Xi introduced his friend by saying: "This is Liu He. He is very important to me."

     The moment was significant because it meant Xi was publicly acknowledging the relatively unknown Liu as a close aide and putting him on the global radar.

Inner circle

It was only 10 years ago that Xi was widely recognized as a likely candidate for the national leadership. Partly because of the limited time he had to secure the necessary personnel, Xi has filled his inner circle with old associates. In China's dog-eat-dog political world, that approach has served him well: Liu and other childhood friends have helped Xi survive and cement his grip on power.

     Liu's influence is now likely to expand beyond the economic realm and into the political arena. After all, in a country where the Communist Party holds all the cards, politics and economics cannot be separated. But with China's slowdown, the Xi regime faces the difficult task of steering the economy toward stable growth. Liu's fortunes will likely be closely tied to how well the leadership copes with this challenge.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more