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Meet the Xi Jinping Loyalist Now Overseeing China’s Economy

He Lifeng’s long career in government has spanned the extremes of China’s approach, from the early embrace of small business in the 1980s to today’s tighter state control.

He Lifeng on a computer screen. Technicians are monitoring the video feed.
He Lifeng in Beijing in 2018. Mr. He was elevated to a new economic role in the Chinese government this month, and will now oversee industrial policy, trade negotiations and other areas.Credit...Greg Baker/Agence France-Presse — Getty Images

Keith Bradsher, who is based in Beijing, reported from Xiamen, Fuzhou and Tianjin in China.

In 1984, when China was in its early embrace of capitalism, 29-year-old He Lifeng was near the center of the action. A Communist Party member with two degrees in government finance, he got a municipal job in Xiamen, a coastal city that had just been freed by Deng Xiaoping from central planning dictates to test free markets.

Over the next two decades in Xiamen and nearby cities, Mr. He rose to become a senior party official and top local leader. And Xiamen became a bastion of small and medium-size businesses, with few state-owned enterprises. It was a model in a national experiment that helped light up years of rapid growth for China.

Mr. He, 68, was named this month as a key government official overseeing China’s economy. His appointment comes as growth is slowing and Beijing’s approach has shifted decidedly back toward a reliance on state-owned enterprises and tight party supervision.

In his new role as a vice premier, Mr. He will oversee everything from industrial policy to trade negotiations. He spent the past five years as the leading central planner of China’s economy, and will now have even more influence to make sure those plans and the edicts of Xi Jinping, China’s top leader, are followed.

The big question among economists now is which Mr. He will the world see as vice premier. Will he take his cues from the entrepreneurial energy he saw early in his career in Xiamen? Or will he follow his more recent experiences as a taciturn Communist Party boss who avoids contact with foreign executives and works closely with state-owned enterprises?

Victor Shih, a political scientist at the University of California, San Diego, said Mr. He’s recent experience suggested that he favored state-led initiatives. Such policies meet short-term needs, like the swift economic stimulus that arises from building highways and skyscrapers, but then bring difficulties, like ever-rising debt to pay for the construction.

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He Lifeng, fourth from the right, and other Chinese politicians being sworn in after their election at the National People’s Congress this month.Credit...Noel Celis/Agence France-Presse — Getty Images
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Mr. He in Beijing in 2019. He spent the past five years as the leading central planner of China’s economy, and will now have even more influence to make sure the edicts of Xi Jinping, China’s top leader, are followed.Credit...Greg Baker/Agence France-Presse — Getty Images

Mr. He “has a track record of doing things immediately, in accord with his boss’s wishes, but may sacrifice some of these medium-term issues,” Mr. Shih said.

China’s new premier, Li Qiang, promised at his inaugural news conference this month that his country would treat private companies equally with state-owned enterprises, in an attempt to signal that China wanted to revive entrepreneurship. Four people who know Mr. He, speaking on the condition of anonymity to talk openly, said Mr. He was influenced by his work in Xiamen and appreciated the power of free markets in fostering economic growth.

They also said, however, that they expected he would closely follow every decision by Mr. Xi, who has handed down statist measures that in many cases have suppressed business growth.

Mr. He is one of the closest allies of Mr. Xi, who was confirmed this month to a third five-year term. Practically no one in China’s political life has been closer to Mr. Xi over the years. The two met as young officials in Xiamen, months after Mr. He finished his master’s degree at Xiamen University. When Mr. Xi ventures out in public, Mr. He consistently appears in official photos several steps behind him.

In Xiamen in the 1980s, they worked together to set up industrial parks for factories and then wined and dined potential investors from other regions of China, as well as Taiwan and Hong Kong.

Mr. He left Xiamen in 2009 and followed Mr. Xi, who by then was China’s vice president, to northeastern China. Mr. He played a senior municipal government role in Tianjin and five years later became a senior economic planner in nearby Beijing.

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Mr. He, center left, shaking hands with Italy’s labor minister at the time, Luigi Di Maio, in Rome in 2019, as Mr. Xi and Prime Minister Giuseppe Conte look on. Over the years, Mr. He has perhaps been closer to Mr. Xi than any other Chinese official.Credit...Andrew Medichini/Associated Press

Since 2017, Mr. He has played a powerful role in the economy’s shift toward state-led development. He served as the chairman and Communist Party secretary of the country’s top central planning agency, the powerful National Development and Reform Commission. He shifted the commission’s focus away from foreign investment and curtailed meetings with foreign executives, emphasizing close coordination with state-owned enterprises instead.

Mr. He’s economic policy evolution has closely paralleled his longtime boss’s declining trust in markets. Mr. He gave a speech in 2008 at his alma mater that reflected an early faith in capitalism. He extolled the decision by Mr. Deng, who dominated political life in China for two decades starting in 1978, to pursue free markets, saying he and other early graduates had “benefited from the great cause” of opening the economy.

In August, Mr. He took a very different tone in a column for the state-run Economic Daily: “Strengthening the Party’s overall leadership over economic work is the fundamental guarantee for our country’s economic development. Practice has proved that the key to running China’s affairs well lies in the Party.”

A stark example of how far Mr. He has traveled in his policymaking can be seen in his role as a senior leader in Tianjin before moving to Beijing to run the national development commission.

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Shapowei, a neighborhood in Xiamen, last month. The city, where Mr. He worked as a young official in the 1980s, became a bastion of small and medium-size businesses, with few state-owned enterprises.Credit...Qilai Shen for The New York Times
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A mall in Tianjin that has never opened. Mr. He was a senior leader in Tianjin, where state-owned enterprises predominate and where extensive borrowing has left the municipality facing one of China’s worst local government debt crises.Credit...Gilles Sabrié for The New York Times

Tianjin, a large metropolis only 70 miles southeast of Beijing, is a model of government intervention — in many ways the opposite of Xiamen, where Mr. He got his start. State-owned enterprises predominate. Extensive borrowing has left Tianjin facing one of China’s worst local government debt crises.

Mr. He oversaw the construction of a vast new city of skyscrapers on the city’s oceanfront. It was intended to become a “new Manhattan,” but has failed to attract many businesses.

Today, rows of apartment buildings stand vacant at the port in Tianjin. A 103-story skyscraper opened only its bottom 40 floors for business. Even four McDonald’s franchises were mostly empty on a recent workday.

David Xing, a 29-year-old office worker, sat in the food court of a mostly empty mall at lunchtime on a recent weekday. Friends had moved to Tianjin but stayed only a couple of years before concluding there were better job opportunities elsewhere.

“I feel like this place can’t keep people,” he said.

Cities across China are struggling with overwhelming debt burdens, and an analysis by Fitch Ratings found that Tianjin was in bigger trouble than practically anywhere else. Although Tianjin is a longtime center of heavy industry with a broad tax base, the city’s borrowing affiliates are so indebted that they pay among the highest interest rates in China. Nearly three-fifths of Tianjin’s debt falls due this year, and investors have been leery of extending long-term loans to the city.

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People lining up to recruit and seek employment on a street in the Huli Industrial Park in Xiamen last month.Credit...Qilai Shen for The New York Times
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Sun Hao, a welder in Xiamen, said, “I used to work for others, but here I can do it on my own, which feels better.”Credit...Qilai Shen for The New York Times

Unlike Tianjin, Xiamen has fairly little debt. An analysis released this month by S&P Global found that Xiamen was the least indebted city in Fujian Province, which in turn had one of the best provincial credit profiles in China.

Xiamen also remains a hub of small-business activity. Sun Hao, 40, moved to Xiamen 15 years ago when he grew tired of working for others in his home province, Henan, in central China. He opened his one-man welding workshop, where he makes steel mountings for a nearby circuit board factory.

“I used to work for others, but here I can do it on my own, which feels better,” he said.

But China today is much more like Tianjin than Xiamen. Nationwide, government investment in road, bridges and other infrastructure grew nearly three times as fast in the first two months of this year as did retail, a sector that is among the most dominated by entrepreneurs in China.

Mr. He himself may never have absorbed Xiamen’s small-business ethos. Even before he moved to Tianjin, he spent his last years in Xiamen ordering the flattening of neighborhoods and villages on the outskirts of Xiamen’s historic core to make way for modern buildings, said Alfred Wu, a politics professor at the National University of Singapore who used to work as a local journalist near Xiamen.

Mr. He finished his years in Xiamen, Mr. Wu added, with a new nickname: He Dachai, or He the Big Demolisher.

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An oceanfront neighborhood in Tianjin, where a number of completed but unoccupied buildings remain.Credit...Gilles Sabrié for The New York Times

Li You contributed research.

Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He has lived and reported in mainland China through the pandemic. More about Keith Bradsher

A version of this article appears in print on  , Section B, Page 1 of the New York edition with the headline: Xi Loyalist Leading China’s Economy. Order Reprints | Today’s Paper | Subscribe

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