Sixty-five-year-old Liu He goes way back with Chinese President Xi Jinping - growing up in the same Beijing neighbourhood together.

The Chinese leader, who is a year younger, had introduced his chief economic adviser as "very important" to him, when former US national security adviser Thomas Donilon visited Beijing in 2013, reported The Wall Street Journal.

Mr Liu has now been promoted to the powerful 25-person Politburo and is seen as a forerunner to become a state councillor or vice-premier, given his role as the mastermind behind major economic and financial policies.

The Harvard-educated Mr Liu is director of the Office of the Central Leading Group on Financial and Economic Affairs, a role he took on in 2013. He was made a member of the Central Committee the year before.

This group is personally overseen by Mr Xi, and serves as a command centre for the country's macroeconomic policy.

Analysts say Mr Liu's promotion signals a continuity in current policies for the next five years.

Peking University economics professor Cao Heping told The Straits Times that Mr Liu is most likely to take over from the current fourth-ranking vice-premier Ma Kai to oversee economic issues.

"We can expect the reforms rolled out in the past three years to continue, and there won't be any major changes in direction," he said.

Mr Liu has been a key driver of supply-side reforms such as reducing overcapacity in steel and coal, and excess housing stock.

He was believed to have spoken on behalf of Mr Xi in an article in the party-run People's Daily in May last year, criticising government officials for delays in carrying out supply-side reforms.

The article had quoted an unnamed"authoritative person" - believed to be Mr Liu - who also warned against relying on investment and debt to drive growth, which could lead to a recession.

Mr Liu cited Singapore founding prime minister Lee Kuan Yew in an article published in 2008. Mr Liu wrote that Mr Lee had told him China's greatest challenge is urbanisation, when they met at the Davos Forum in 1993. "Lee Kuan Yew is right," he added.

However, Hong Kong's South China Morning Post has reported that Mr Liu could replace Mr Wang Huning as party theorist, after the latter was promoted to the Politburo Standing Committee.

"If Liu takes over Wang's old job, he will provide ideological justifications for whatever Xi intends to say," said Professor Steve Tsang of the School of Oriental and African Studies at the University of London.

Noting that Mr Xi is in firm control, he added: "It may be wishful thinking to say Liu will have major influence on Xi on economic matters because he has background and competence there."