China’s new leaders may struggle to fulfill their immense ambitions

CHINA has announced its new leadership line-up. It’s a hugely significant event for the world’s second largest economy – indeed. for the world more generally. The new (and old) faces revealed last week will run the country for the next ten years.

And their programme is certainly ambitious. On his first day in office, China’s Communist party’s new general secretary, Xi Jinping, described his task in the following terms: “Our people have an ardent love for life. They wish to have better education, more stable jobs, more income, greater social security, better medical and health care, improved housing conditions, and a better environment. They want their children to have sound growth, have good jobs and lead a more enjoyable life. To meet their desire for a happy life is our mission. It is only hard work that creates all happiness in the world.”

To add to this, outgoing President Hu Jintao called on the country to double its economy and the levels of per capita income by 2020.

This is an impressive and wide ranging set of priorities. The most significant question, therefore, is whether the new leadership can live up to these ambitions and the huge expectations they create among the Chinese people.

The immediate economic outlook is more difficult than it has been for a while. The global economy is still suffering from the fallout of the financial crisis. China’s number two trading partner, the EU, has just re-entered recession. China’s own economy has been showing the strain and growing at a slower pace until recently. The first priority for China’s new leadership will be to get the Chinese economy back on to a path of sustainable development.

This will not simply be a matter of numbers. On past experience, it would be risky to bet against China doubling the size of its economy again. But its growth model needs to turn towards a significantly greater dependence on consumption for growth rather than the investment led, export-oriented model of the past.

The Chinese have recognised this, but have made little progress. Further reforms will be necessary across the economy – especially in the financial sector, and in the over-dominant state-run enterprises. Such a challenge will call for firm and determined leadership.

Meanwhile other problems loom large. China is entering a period of demographic crisis, with its population rapidly ageing. Similarly, the environmental and social costs of rapid development are generating more and more dissent. The list is long.

Nor is it simply a matter of economics. Corruption and a widening wealth gap between rich and poor threaten to undermine the Communist party’s legitimacy. China’s own leaders describe the war on corruption as a matter of life and death. But these same rulers desperately need to show more accountability and transparency. Without doing so, corruption is only likely to get worse. The problem is that the Communist party is hugely reluctant to concede any form of political power or influence to anyone else. Political reform where it does take place is designed more to improve the party’s internal governance than to open up the political system.

The decisions China’s new leaders make will have huge implications, not only for the 1.3bn people in China, but for the rest of the world as well. China has become a vital part of the global economy, and is a key player in almost all of the global challenges we face, ranging from climate change to improving global governance.

As Xi Jinping also said: “Just as China needs to learn more about the world, so does the world need to learn more about China.”

We need to take China more seriously, and to treat it more as a normal, if increasingly powerful, country. There are differences between us, including most obviously over values and human rights. But these do not preclude us having more informed and sustained engagement with China.

Only thus can we help ensure that the decisions China’s new rulers take and the policies they follow are of benefit both to China and to the world more widely.

Roderic Wye is associate fellow for Chatham House’s Asia programme. He is also a former head of the Asia research group at the Foreign and Commonwealth Office.