Here's What We Know About The Man Everyone Thinks Will Soon Control China's Economy

Back in 2010, WikiLeaks (then still working with the Guardian), published a 2007 U.S. diplomatic cable featuring an unknown diplomat's assessment of a rising star in the Chinese Communist Party, Li Keqiang.

Li made a good impression on the US Ambassador, the cable said,  being "engaging and well-informed on a wide range of issues" and displaying a "good sense of humor and appeared relaxed and confident throughout".

Crucially, Li seemed well-aware of what would become one of the biggest problems in modern China: corruption. Here's an excerpt from he cable:

Although Liaoning residents are dissatisfied with education, health care and housing issues, it is corruption that makes them most angry, Li told the Ambassador. The most effective way to combat official graft is to create a transparent system of rules and adequate supervision that leaves corrupt officials no room to act. This is the method Liaoning employed to manage the vast sums spent on its massive slum relocation project. Once a corrupt official is discovered, he is promptly punished, which provides a good lesson to bureaucrats taking up new posts. The province has also increased efforts to "strictly educate" public officials, Li said. Part of this education involves prison tours that force bureaucrats to visit incarcerated officials convicted of graft in order to witness first hand the consequences of malfeasance.

It's worth bearing this passage in mind, now that we are entering China's Leadership Transition, with Li widely expected to become Prime Minister of China alongside President Xi Jinping.

-*Li's ascendancy*-

Li is expected to succeed Wen Jiabao as the premiere of China, and like Wen, Li is known for his humble origins.

Born in 1955 in the poor Anhui province, Li was the son of a local official. He went to the prestigious Peking University, became an excellent English speaker, and eventually gained a PhD in economics.

According to Reuters, Li immersed himself in the political ferment of the following decade of reform under Deng Xiaoping, even going so far as to befriend pro-democracy (even some that later were put in exile for their role in protests).

One key aspect of his career was the Communist Youth League, where he gained the patronage of the man who ran the league in the 1980s, current President Hu Jintao. Known as a practical administrator, Li went on to become party leader in Henan, in central China, and Liaoning province in the northeast. Both districts prospered under his leadership.

His links with the Communist Youth League (and through that, Wen and Hu) helped Li become a key member of the 'tuanpai' camp, one of two camps that have been dominating the Chinese leadership in recent years, according to a report John Dotson at the U.S.-China Economic and Security Review Commission (USCC).

Members of the 'tuanpai' camp tend to push for policies that would develop the inland part of the country and prevent social instability, in contrast to the 'princelings' i.e. the children of high-powered revolutionary era officials and the 'Shanghai clique', who tend to favor economic growth.

-*
'Bad Luck'
*-

Li doesn't however have a spotless record — in fact, he's got something of a reputation for "bad luck".

He earned the moniker "Three Fires Li" after a series of major fires in Henan province, and in his next job in Liaoning Province a mine collapsed an killed over 200 miners.

But the biggest blemish on his career is the Henan AIDS crisis.

In the 1990s a state sponsored  blood exchange program in the Henan province caused a massive AIDS outbreak when peasants were offered money to donate their blood, have the  plasma removed, and finally have their blood pooled and then re-injected (sans plasma) into the donors. The outbreak is said to have affected as many as 1 million people in Henan.

While the state sponsored blood plasma fiasco took place during his predecessors term, Li was left to deal with the fallout, and he continued carrying out policies aimed at covering up the scandal and limiting media coverage of the incident. For a reformist like Li, his part in covering-up the Henan AIDS crisis will definitely haunt his time as premiere.

-*The economy*-

But Li's experience in economic and administrative work is expected to help at a time when China's economy is slowing down. While declining GDP growth isn't as worrisome to the Communist Party as unemployment and inflation Li still has a significant task ahead of him. 

Analyst's suspect that China's third-quarter growth may have been weaker than official data indicate, and Bloomberg reports, that Li himself was quoted in 2007 by Wikileak's as saying that GDP numbers are made up and more for guidance, and that he thought electricity consumption, rail cargo and loans were more reliable economic indicators.

Traders had suspected that Li would ease monetary policy, but inflation risks seem to suggest that's unlikely.

-*Wen Jiabao's second coming?*-

It's tempting to see Li as Wen Jiabao's protege — a man from a similar background with reports of a similar temperament entering the same office.

One big problem here is that Wen was seen by many as a pragmatic reformer who was unable to tame the different factions in the Chinese leadership. Li, known for his gentle temper and "easy smile" may struggle to build bridges amongst a leadership that seems to be growing more fractured.

It's also hard not to remember of how Wen's reputation as a modest, hard working man with a honest background was thrown into doubt by a bombshell New York Times investigation that suggested Wen's family had obtained billions of dollars worth of assets illicitly. The story has clearly rattled Wen — while his lawyers are hinting at legal action, he has ordered an official probe into his own family's finances.

It seems very likely now that Li may face the same level of scrutiny about his own finances. Hopefully he has nothing to hide.

*SEE ALSO: Everything You Need To Know About China's President In Waiting >*

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