From NY Times, on the passing of former premier Li Keqiang on Friday:
…Mr. Li, who had degrees in law and economics, represented the pragmatic technocrats who led the country out of poverty in the 1990s and 2000s. [Online commentators] recited his opening remarks in his first news conference in 2013 after becoming the premier.
“We will be loyal to the constitution, faithful to the people, and take the people’s wishes as the direction of our governance,” Mr. Li had said.
Li represented the forces for economic openness and movement away from command and control in the Chinese economy. In my view, it has been this move away from economic liberalization and return to dirigisme that has in part resulted in elevated levels of economic and economic policy uncertainty, and hence slower growth than could be achieved otherwise (see e.g. Frankel’s post for further explication of other factors). Here’s a picture of recent measures of uncertainty in China. 首相官邸ホームページ, CC BY 4.0, via Wikimedia Commons
Figure 1: EPU-China based on mainland China newspapers (blue, left scale), EPU-China based on SCMP (tan, left scale), and WUI-China (green, right scale). Light orange shading denotes Xi Jinping; gray shading denotes ECRI defined peak-to-trough recession dates. Source: policyuncertainty.com, and worlduncertaintyindex.com, and ECRI.Below is a graph from the Economist in March, of the Li Keqiang index – a check on the possible measurement errors — deliberate or accidental – in the tracking of the Chinese economy.
Source: Economist, March 9, 2023.As Li noted himself in 2015, the index was becoming increasingly unrepresentative of an ever more services-dominated economy, proposed a “new Li Keqiang Index” based on stability of employment, growth of household income and decreases in energy consumption [1]. Other competing proxies are discussed by Big Data China.More By This Author:Inflation Persistence In The Pandemic Era
Real Wage Growth And Inflation Prospects
GDP in Q3: Relative To Nowcasts, And Alternative Estimates
