With the veils closed on February 27, the three-day session of the Second Plenum for the 17th National Congress that started on February 25 confirms for China watchers three things: Xi Jinping will replace Zeng Qinhong to become vice-president; Li Keqiang, a one-time favorite to become Hu Jintao’s successor, will become standing vice-premier, setting Li up to take over for Wen Jiabao in 2012; and the State Council will be downsized from 28 to around 21 ministries according to the “big ministries system” (dabuwei tizhi) proposal (China Times, February 26; China Brief, January 4).
In the lead of becoming the executive vice-premier, Li is likely to be entrusted with the responsibility of reforming the State Council, a task that observers call “mission impossible,” since implementing the “big ministries system” (dabuwei tizhi) will mean eliminating a quarter of the existing ministries, which includes over 100 ministers and vice-ministers. Moreover, Li has no prior experience working in the central committee (China Times, February 26). The big ministries will likely be structured around a Ministry of Energy (MOE), Ministry of Transportation (MOT) and Ministry of the Environment and Construction (MOEC) (China Brief, January 4; China Daily News, February 27). The transition to the “big ministries system,” contrary to what some earlier observers expected, will likely take five years to complete as oppose to a leap from a to z as suggested by earlier observations. This new thinking is attributed in part to the belief that Li is expected to be very cautious with the reform process (Ming Pao, February 27). According to a source with intimate understanding of Zhongnanhai cited by Wen Wei Pao, the fact that the proposal will be deliberated at the 11th National People’s Congress means that the structure of the “big ministries system” has already been determined (Wen Wei Pao, February 28).
According to China Daily News, the National Congress also recommended that Politburo Member and former Mayor of Beijing Wang Qishan serve as vice premier in charge of finances; Politburo Member and former Guangdong Province Provincial Committee Secretary-General Zhang Dejiang serve as vice premier in charge of external trade; Politburo Member and former head of the United Front Work Department Liu Yandong as vice premier, with Hui Liangyu remaining as vice premier (China Daily News, February 27).
In similar news, the Politburo’s oft stated approach to the Chinese economy in 2008 had been to take “two precautions”: one, to an overheating economy and two, to acute inflation. In light of the blizzard in January 2008 that struck a severe blow to the Chinese economy, and increasing risks in the U.S. financial sector that are affecting the global economy, Zhou Tianyong, a professor at the Central Party School, says that the “two precautions” may become only “one precaution.” Zhou claims that China’s export will ultimately be affected by the U.S. decline and that economic growth, if uncontrolled, will also drop, so the amount of control that can be exerted will need to be adjusted (Sing Tao Daily, February 28).