Liu He, the current director of China’s National Development and Reform Commission, has been a key figure in shaping the Chinese economic policy. Mr. Liu has been a strong proponent of liberalizing Chinese markets for some time now, a policy which has endeared him to many in Washington. Unfortunately for He, many economists in both China and America fear He’s policies will have to be totally scrapped as President Trump moves into office. Both Mr. Liu and China’s President Xi Jinping are getting ready for tougher sanctions from Trump’s trade team.
Liu He Faces Steep Challenges With Both Trump And Chinese Nationalism
While few know what Mr. Liu will advise President Xi to do if Trump starts imposing trade sanctions, it’s quite clear that Liu expects a messy trade war between the two nations very soon. In a recently published book documenting an economic study Liu oversaw, he wrote that, “Populist policies adopted by the governments of developed countries are often the instigators of crisis.”
Even though Mr. Liu has been very powerful in shaping President Xi’s economic reforms in recent years, China has still not embraced his totally open market and economic liberalization policy. And, unfortunately for Liu, President Xi is still in charge. Xi seems more committed right now to restoring the centralized control of the Communist Party and strengthening his hold over state-owned companies. Partly this is due to a nationalistic wave sweeping over the Middle Kingdom.
It will be even more difficult for Mr. Liu to influence President Xi as Trump’s trade team gears up to impose heavy tariffs on China. Most trade experts now believe if the USA does move forward and puts up higher tariffs on Chinese goods, China will react by importing more food from Brazil and putting up walls for American made goods. Although Mr. Liu might like to weaken a few of China’s trade barriers in this environment, Liu knows that he will most likely face nationalist uprisings.
Liu He’s American Connection
Liu has been well known and well liked for years in Washington for his economic vision. Jacob J. Lew, President Obama’s treasury secretary, told reporters that he would always talk to Mr. Liu first when he had a question about China’s economic policy. Also, David P. Loevinger, the senior coordinator for China affairs under President Obama, said that “Liu He was always kind of a must-stop for Treasury because he had a macro view of the Chinese economy and the global economy.” One reason Mr. Liu has been able to win so much support from Americans is due to his educational background. He received his degrees from both Seton Hall University and Harvard.
Liu’s years of first hand experience with American culture has made it easier for him to bridge the gap between Beijing and Washington. While Liu faces tremendous challenges in bringing his vision for an open market China to fruition in the coming years, he has been quite deft at playing the Chinese political game before. Recently, He wrote a glowing review of President Xi’s governance that was published by Xi and circulated around all of China’s most powerful government officials.
He is also suspected of being the author of an anonymously published article in the Communist Party’s newspaper the People’s Daily.This article pushed for China to restrain rising debt and embrace new economic policies. Only time will tell how much Liu’s ideas will be shared by the general population in China.
Liu He Set To Dominate U.S.-China Relation In Years To Come
The future will most likely be increasingly tense between China and the USA, but Mr. Liu’s future looks bright. Liu, who is now 64, will most likely be named the new prime minister in 2018 as President Xi forms a new government. Liu’s close ties to President Xi, plus the positive opinion many in Washington have of him, will certainly make Liu one of the most powerful men in China in the next few years.