Former Minister of Finance of the Communist Party of China, Liu Kun, returned to the Ministry of Finance recently after more than a year since stepping down. In a rare move, he also assumed the positions of Party Secretary and Chairman of the National Social Security Fund Council of the Communist Party. Liu Kun is an old classmate of Vice Premier He Lifeng, who is in charge of finance within the Communist Party, and He Lifeng is a close confidant of Xi Jinping. He Lifeng’s practice of favoring his associates has drawn attention.
According to a report by mainland media outlet “The Paper” on February 7th, the updated information on the website of the National Social Security Fund Council of the Communist Party of China shows that Liu Kun has been appointed as a member of the Party Committee of the Ministry of Finance, and as the Party Secretary and Chairman of the National Social Security Fund Council.
Previously, the positions of Chairman and Party Secretary of the National Social Security Fund Council of the Communist Party were held by separate individuals for a long time. However, now with Liu Kun assuming both roles simultaneously, it breaks the tradition of personnel arrangements within the Communist Party.
Traditionally, senior officials of the Communist Party entering the Social Security Fund Council signaled a move to a less prominent role. In the government restructuring in March 2018, the management of the social security fund was shifted from under the State Council to the Ministry of Finance, serving as a fund investment operation entity without a specific administrative level. By the end of 2023, the total assets of the Communist Party’s social security fund reached 3 trillion yuan.
The tenure of the Chairman of the Social Security Fund Council has previously been carried out by former Ministers of Finance, including individuals like Liu Zhongli, Xiang Huaicheng, Xie Xuren, and Lou Jiwei. Liu Kun’s predecessor, Liu Wei, transitioned to the position of Chairman from Deputy Minister of Finance.
Born in December 1956, Liu Kun hails from Guangdong Province and grew up in Yunxiao County, Fujian Province. He served in various roles in Guangdong for many years, including as Deputy Secretary-General of the Guangdong Provincial Government Office, Director of the Guangdong Provincial Finance Department, Deputy Governor, and later as Deputy Minister of Finance. In September 2023, he stepped down from his role as Party Secretary of the Ministry of Finance, followed by resigning as Minister of Finance on October 24th of the same year, succeeded by Lan Fo’an.
Liu Kun was already above the official retirement age of 67 when he resigned as Minister of Finance in 2023. On January 17th, he took over the role of Party Secretary of the Social Security Fund Council from Ding Xuedong, and on February 7th, he assumed the position of Chairman of the Social Security Fund Council, replacing Liu Wei. Ding Xuedong was born in 1960, while Liu Wei was born in 1961, making them both younger than Liu Kun.
Of particular note is the fact that Liu Kun, who had already retired, not only returned to control the social security fund but also rejoined the Ministry of Finance as a member of the Party Committee. In the Communist Party’s official circles, it is extremely rare for retired officials of Liu Kun’s age to return to significant positions.
Vice Premier He Lifeng, who oversees financial matters, originally hails from Guangdong and rose through the ranks in Fujian Province, where he maintains a close relationship with Xi Jinping, being considered one of Xi’s confidants. Liu Kun and He Lifeng were classmates majoring in finance at Xiamen University’s Economics Department in the 1977 class (enrolled in early 1978).
Political commentator Li Lin analyzed for “The Epoch Times,” stating that although entering the Social Security Fund Council is typically a move to a lower-profile position, oversight of this department, which manages vast social security funds and handles significant investments, presents opportunities for corruption, especially as the current authorities are pushing for social security fund investments in the stock market. With He Lifeng overseeing finance and placing his own classmate in this lucrative position, it ensures that the benefits stay within their circle. Liu Kun’s return and appointment as both Party Secretary and Chairman signal a nepotistic arrangement that is too significant. This is likely to trigger private criticisms within official circles, as Xi’s faction becomes overly assertive, potentially sowing seeds of future trouble.
He Lifeng is considered one of the representatives of the Fujian faction within Xi’s faction, with his party loyalists spread out throughout the economic sector in recent years. The National Development and Reform Commission (NDRC) is He Lifeng’s stronghold, where Zheng Zhajie, who succeeded He Lifeng as Director after He Lifeng stepped down, was previously a subordinate of He Lifeng during He’s tenure in Fujian. In September 2023, former NDRC Vice Director Yang Yinkai was appointed as Deputy Director of the Central Finance Office, a position to which he was personally promoted by He Lifeng during his time at the NDRC. The Director of the Central Finance Office is also He Lifeng. Lan Fo’an, who took over Liu Kun’s position as Minister of Finance, previously served as Liu Kun’s deputy during Liu Kun’s tenure as Director of the Guangdong Provincial Finance Department.
He Lifeng is said to have a clique known as the “Xiamen University clique.” He Lifeng serves as the Director of the Communist Party Central Financial Work Committee and Secretary of the Central Financial and Economic Affairs Commission, with Wang Jiang, the Deputy Director and Deputy Secretary of the Central Financial and Economic Affairs Commission, being He Lifeng’s fellow alumnus from Xiamen University. On September 27th last year, Shen Danyang, Deputy Secretary of the Hainan Provincial Party Committee, was appointed as the Director of the State Council Research Office. Shen Danyang, who is from Zhangzhou, Fujian, and a graduate of Xiamen University, was dubbed by Hong Kong media as Li Qiang’s “chief strategist,” with His Senior He Lifeng possibly being a significant influence.