Beijing is considering whether Vice Premier Liu He, Xi Jinping’s special envoy who negotiated the U.S.-China trade deal with the Trump administration and is overseeing the implementation of the first phase of the trade agreement, should be replaced by Hu Chunhua, The Wall Street Journal reported Wednesday, citing people familiar with the matter.
Liu He is considered a close associate of Xi and has been in charge of the economy for many years and is familiar with it. After the U.S.-China trade war broke out, he was tasked by Xi to lead a Chinese delegation in tough negotiations with the Trump administration.
Hu Chunhua has little experience in U.S.-China relations, although he served as secretary of Tibet and, since becoming vice premier of the State Council, has been in charge of the three rural areas, poverty alleviation, commerce and trade. The Wall Street Journal cited noted that no final decision has been made on whether Hu will eventually replace Liu He. If Liu He is replaced, he will reportedly still hold key positions, including oversight of China’s financial sector as the risk of debt and default increases.
If Liu He is replaced by Hu Chunhua, it is not clear whether there is another reason. But the Internet recently circulated an old article by Liu He titled “Thirty Years of China’s Economy and Long-Term Problems Ahead,” with a new headline: “Without the reflection on the disaster of the Cultural Revolution, China’s economic growth today would not have been possible. It is said to imply that Xi Jinping whitewashed the Cultural Revolution. Xi Jinping claimed that the first three decades of the Cultural Revolution cannot be separated from the second three decades.
According to reports, the Communist Party will hold its 20th National Congress next year, and new members will enter the Communist Party’s Politburo. Liu He will turn 70 early next year, theoretically exceeding the traditional retirement age for Chinese leaders.
The Wall Street Journal reports that Hu Chunhua, 58, is seen as a candidate for the Standing Committee of the CCP’s Politburo, and that as vice premier of the State Council Hu is responsible for commerce and trade. That makes him a natural candidate for economic discussions with the United States, even though Washington and Beijing are not interested in negotiating a follow-up trade deal.
The U.S. and China finally reached the first phase of the trade agreement on Jan. 15, 2020, in which China committed to purchase an additional $200 billion in U.S. products and services over the next two years, on top of its 2017 trade volume, meaning that China would need to significantly increase its imports. In the tariff component, the U.S. will continue to maintain the punitive tariffs the U.S. has repeatedly imposed on China since the outbreak of the trade war until an agreement is reached in the second phase.
The signing of the first phase of the trade agreement has eased the situation, but has sparked criticism within China, even criticism that Liu He is like Li Hongzhang, losing power and humiliating the country. According to the Wall Street Times, critics say China has made trade concessions without allowing the United States to significantly reduce tariffs.
Under the first phase of the trade deal, the two countries agreed to conduct regular high-level bilateral reviews of the agreement under the leadership of the U.S. trade representative and a “specific vice premier” of China.
The Wall Street Journal reports that so far, discussions between the U.S. and China on the first phase of the trade agreement have only taken place between lower-level officials. Most recently, Terrence McCartin, the U.S. trade representative for China, said the agreement is being discussed at a high level. Terrence McCartin, the U.S. trade representative for China, recently had a similar “review” meeting with an official from the Chinese Ministry of Finance.
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