There have been more than a few murmurs in China recently about an alleged rift between President Xi Jinping and Premier Li Keqiang over economic policy.
Some analysts say a disagreement may have emerged about how to grapple with a mounting debt problem and how to kick-start future growth. More fuel may be thrown on the speculative fire after state news agency Xinhua reported Friday that Xi pledged action on economic restructuring during a tour of Heilongjiang Province, once a flourishing heavy industrial center.
“If we hesitate in making decisions and take half measures, we will lose this rare opportunity,” Xi said during the visit as he urged local authorities to be fully committed to upgrading old industries and nurturing new ones.
Xi appears to be taking a hands-on approach in overseeing China’s economy, a role that predecessors left mostly to top technocrats. But recent commentaries in state mouth piece People’s Daily hints some party honchos disagree with Li’s relatively upbeat view of the Chinese economy’s prospects.
Specifically, some say Xi wants to curb debt-fueled growth before it destroys the economy, while Li feels the best way to spark growth is through debt-fueled stimulus. Some even speculate that Xi is moving to consolidate control of the economic engines and oust Li.
Xi’s visit to the northeast, could be a sign that he wants get behind the wheel. This area of the country includes the provinces of Liaoning, Jilin and Heilongjiang, and was among the first regions in China to become industrialized with the industries of steel, automobiles, shipbuilding, aircraft manufacturing and petroleum refining.
Against the backdrop of the Chinese economy settling into a “new normal” featuring lower growth rates, the northeast is experiencing a more acute slowdown than other areas of the country.
Known as the Chinese rust belt, the area has seen economic growth slowing as its industrial base loses steam. Revitalizing this area has been a crucial part of the country’s modernization drive, reported Xinhua.
Xi’s visit was an investigation to determine a way to revitalize the area, said Xin Ming from the Party School of the Communist Party of China Central Committee.
Xi told a meeting of senior officials in Heilongjiang that only supply-side reform could strengthen industrial structure and productivity, said Xinhua.
Since 2013, Xi has made three tours to the northeast and visited a number of technology companies, urging deeper integration of information technology and industrialization in the region.
This latest inspection comes one month after the country issued a policy document on the revival of old industrial bases. China is determined to transform the northeast into the manufacturing base for advanced equipment and a strategic base for technological equipment by 2030, said the document.