After the 20th National Congress of the Chinese Communist Party, there have been changes in the power structure in Zhongnanhai. Vice Premier in charge of finance, He Lifeng, has been found to be cultivating influence significantly. Scholars point out that He Lifeng’s expanding power may lead to conflicts with other factions close to Xi Jinping, and these individuals lack economic management skills, resulting in China’s economy being in a mess.
He Lifeng is widely recognized as a close ally of the CCP leader Xi Jinping. He has been making frequent appearances on the international stage and leading tariff negotiations with the United States, becoming a prominent figure within the Chinese Communist Party.
An article published by Taiwan’s media “Up Media” recently pointed out that He Lifeng, who controls the “money bag,” is the most blatant cultivator of power.
He Lifeng’s proteges currently dominate the economic sphere. The National Development and Reform Commission (NDRC) is He Lifeng’s stronghold. After He Lifeng stepped down from the director’s position, the current director of NDRC, Zheng Zhanjie, was his old subordinate during He Lifeng’s tenure in Fujian.
Former Minister of Finance of the CCP, Liu Kun, returned to the Ministry of Finance over a year later and uncommonly took on the role of Party Secretary and Chairman of the National Social Security Fund. Liu Kun is He Lifeng’s old colleague, and Lan Fo’an, who replaced Liu Kun as Minister of Finance, was Liu Kun’s deputy when Liu Kun was the Director of the Finance Department of Guangdong Province.
He Lifeng has also been rumored to have a “Xiamen University Gang” in official circles. He Lifeng is the Director of the CCP Central Finance Office and Secretary of the Central Finance Work Committee. The current Executive Deputy Director of the Central Finance Office and Deputy Secretary of the Central Finance Work Committee, Wang Jiang, is He Lifeng’s alumni from Xiamen University. On September 27th last year, the Deputy Secretary of the Hainan Provincial Party Committee, Shen Danyang, was appointed as the Director of the State Council Research Office, serving as the top advisor to Premier Li Keqiang. Shen Danyang, a native of Zhangzhou, Fujian, and also a graduate of Xiamen University, is a junior fellow of He Lifeng.
Chinese-American economist Li Hengqing told Dajiyuan that before and after the 20th National Congress of the CCP, he received news that the Fujian faction held the most significant influence in the economic sphere, virtually controlling all economic decision-making in China. Therefore, later on, it was observed that Zheng Zhanjie, Lan Fo’an, Liu Kun, and others held real power.
He believes that it’s not a problem if capable people are used, but the current economic team holds great power yet lacks ability, resulting in China’s economy being in a mess.
Li Hengqing believes that He Lifeng’s current power surpasses that of his predecessor Liu He due to his closer relationship with Xi Jinping. When he was transferred from Tianjin to the NDRC and later promoted to the Vice Chair of the National Committee of the CPPCC, it was all part of Xi Jinping’s strategic plan. However, He Lifeng has not produced significant results in economic governance. His launch of the Binhai New Area in Tianjin left behind ghost towns and massive debts. It’s certain that managing China’s economy with this group of people will not lead to positive outcomes.
Among the top echelons of the CCP, Premier Li Keqiang and Vice Premier Ding Xuexiang both have economic management authority and their own management teams. The relationship between them and He Lifeng is also drawing attention.
Li Hengqing stated that there will definitely be power struggles, including various rumors circulating domestically and overseas, such as the CCP planning to convene the Fourth Plenary Session and power struggles expected at the 21st National Congress, among others. Part of the reason is due to the opaque operations within the CCP, while much of it stems from different political factions within the Party spreading information.
He cited an example of He Lifeng’s conflicts with others. For instance, Zhou Jiayi, who served as Vice Minister of Finance, has recently been appointed as the third President of the Asian Infrastructure Investment Bank. It is said that she is highly capable, and there were internal rumors that she was supposed to replace Liu Kun as Minister of Finance. However, He Lifeng insisted that Liu Kun’s term be extended, and the position was left to Lan Fo’an, also a close ally of He Lifeng.
Sun Guoxiang, a professor specializing in International Affairs and Business at South China University, told Dajiyuan that He Lifeng’s distinctive trait lies in the speed and depth at which he cultivates his power, creating his own “Xiamen University Gang” with a clear intent of power expansion. Such actions are likely to spark internal friction.
Sun Guoxiang explained that He Lifeng’s power play, besides causing discontent among some professional and technical bureaucrats, will impact morale, efficiency within organizations, and could clash with Premier Li Keqiang, potentially leading to conflicts between Li Keqiang’s team and He Lifeng’s team in policy implementation.
Xi Jinping’s lavish spending has long been criticized by the public, and He Lifeng is the one firmly controlling the “money bag” for him.
Li Hengqing mentioned that within the CCP’s fiscal system, the so-called budget system is seen by Xi Jinping as a means of restraining others. After various ministries submit their budgets, there is still a lot of gray money left. A typical example is the anti-corruption funds, which can amount to billions, but what’s officially reported might only be a fraction of it. From top to bottom in the central and local governments, officials are managing their own slaves, and it’s hard to ensure they won’t enrich themselves.
“Only when there is a civil uprising, or when there’s a need for war and there is no military budget left, will they realize the treasury is empty. Just like how China’s economy is in such a mess now, officials are still engrossed in power struggles without caring about the people’s suffering,” he said.