Xi Jinping’s close confidant, Li Qiang, was elected as China’s new premier during the fourth plenary session of the National People’s Congress at the Great Hall of the People in Beijing on Saturday.

Four years before Mr Li gained notoriety as the force behind the two-month Coronavirus (COVID-19) lockdown of Shanghai, the man who became China’s premier on Saturday worked quietly behind the scenes to drive a bold revamp of the megacity’s sclerotic stock market.

Mr Li’s back-channelling – sources said he bypassed the China Securities Regulatory Commission, which lost some of its power under the new set-up– demonstrated what became a reputation for pragmatism and close ties with President Xi Jinping.

In late 2018, Mr Xi himself announced Shanghai’s new tech-focused STAR Market and the pilot of a registration-based IPO system, reforms meant to entice China’s hottest young firms to list locally rather than overseas.

“The CSRC was very unhappy,” said a veteran banker close to regulators and Shanghai officials, declining to be named given the matter’s sensitivity.

“Li’s relationship with Xi played a role here,” enabling him to present the scheme directly to the central government without going through the CSRC, the person added.

The CSRC did not respond to a request for comment.

Previously the Communist Party chief in Shanghai, Mr Li was confirmed as premier during the National People’s Congress, charged with managing the world’s second-largest economy.

He replaced the retiring Li Keqiang, widely perceived to have been sidelined as Mr Xi tightened his grip on the management of the economy.

Leadership watchers say Mr Li’s closeness to Mr Xi is both a strength and a vulnerability because, while he has Mr Xi’s trust, he is beholden to his long-time patron.

Mr Li, 63, did not respond to questions sent to China’s State Council Information Office.

As Communist Party chief between 2002 to 2004 in his home city of Wenzhou, a hotbed of entrepreneurialism, Mr Li came across as open-minded and willing to listen, said Zhou Dewen, who represented small and midsize enterprises in the city.

Craig Allen, president of the U.S.-China Business Council and a former U.S. official, said Mr Li sought to level the playing field for foreign businesses, pointing to the speed with which U.S. carmaker Tesla was able to get its Shanghai factory there operational in 2019.

Still, several observers caution against putting too much weight on Mr Li’s experience in a business hub such as Shanghai since Mr Xi has steadily tightened Communist Party control and taken the economy in a more statist direction.

“Now Li is a national leader, working under a market-sceptic boss, and he has to balance growth with a range of social, technological, and geopolitical goals,” said Neil Thomas, senior analyst at Eurasia.

Born in Ruian county in what is now Wenzhou, the 17-year-old Mr Li went to work in 1976 at an irrigation station in his hometown, a desirable job in what turned out to be the final year of Mao Zedong’s Cultural Revolution.

Li entered Zhejiang Agricultural University in 1978 when campuses were reopened in China, and competition for places was fierce.

He received master’s degrees from the central party school in Beijing and Hong Kong Polytechnic University.

(Reuters/NAN)