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China's New Leaders: What Will They Bring to the Party?

The identities of China's next generation of leaders will be announced soon. Their composition will set the stage for a decade of liberalization or stagnation.

Once a decade, the handful of men running the world's second largest economy hand the reins over to the new guard. Thursday marks the start of the 18th National Party Congress, a convocation where the ruling Chinese Communist Party reviews its progress over the last five years, lays down the ideological blueprint for the next five, and crowns the country's next generation of leaders.

The transfer will be met with much less fanfare than its just-concluded equivalent in the U.S., but the elevation of seven cadres to China's top leadership -- the Politburo Standing Committee (PSC) -- is no less important. While few in the world will have heard of the bulk of the new PSC members, they are far from being faceless or interchangeable. These leaders will differ significantly in expertise, experience, and reformist inclination. The ones who make it to the top will have done so partly through achievement and ability. But successfully navigating factional rivalry in the world's largest political party and currying favour with rival kingmakers also plays a major role.

The composition of the PSC will set the stage for the next stage of China's development -- if the line-up is dominated by liberals, China may embark on a decade of much-needed reform. If the posts are filled by party conservatives, however, social and economic pressure points may be left untreated. Several potential combinations have been circulated in foreign media and policy circles.

The optimal choices for the PSC would be those with proven track records in pushing through necessary but politically difficult reforms in their respective portfolios. They include Wang Qishan, who promoted liberalization of China's financial sector, Li Yuanchao, a proponent of assessing cadres on more than just GDP growth, and Wang Yang, who has championed the need to let markets push inefficient companies out of business.

Their collective experience and expertise run deep. Wang Qishan, a current vice-premier, has held leadership positions in the central bank as well as in the China Construction Bank, now one of the largest banks in the world by market capitalization. His experience in the banking sector would serve him well. Now in charge of China's financial technocrats, he has constantly championed the need for financial-sector reforms, such as interest-rate liberalization, necessary to reorient the economy towards domestic consumption.

Li Yuanchao, the head of the Organisation Department (the bureau tasked with making staffing assignments and promotions within the party), has studied management both at Peking University's School of Management and briefly at Harvard's Kennedy School of Government. As party secretary of the coastal province of Jiangsu, he advocated bringing in environmental and social criteria for assessing cadre performance, in addition to growth and investment.

Wang Yang, as the party secretary of China's most well-known export region, has long championed a market-based approach to pushing Guangdong's economy up the value-added chain. He argued for the need to allow low-end manufacturers go out of business, despite the resultant lower growth rates and higher unemployment, in order to provide room for the development of higher-value-added sectors.

At the other end of the spectrum are those who owe their positions largely to strong patronage ties within the party, or to pandering to conservative elements within it. They include Zhang Dejiang, who was instrumental in covering up the early outbreak of SARS in Guangdong, Liu Yunshan, in charge of China's extensive propaganda apparatus, and Yu Zhengsheng, kept on as party secretary of Shanghai despite being well past the official retirement age for provincial leaders.

Their track records are worrying. Zhang Dejiang, for example, received his economics degree in North Korea and published an article explaining why private entrepreneurs should be barred from joining the Communist Party. An economic dinosaur, he has long favoured propping up state-owned enterprises. His promotion would have a dampening effect on efforts towards privatisation and financial liberalisation.

Liu Yunshan has overseen the strengthening of the national propaganda apparatus, and according to the BBC has shown unease over the fact that that citizens are using the Internet to criticise the government. His promotion would signal a commitment to maintaining the party's tight grip on local media, stymieing efforts to allow traditional and social media a greater role in acting as an unofficial check on government corruption. A promotion for Yu Zhengsheng, who has long kept a low profile, would not necessarily represent a step backwards. But if he is elected to the PSC, he will take the spot of a younger cadre who may have more energy for pushing through bolder ideas.

Recent rumors have suggested that older conservatives may dominate the lower tiers of the standing committee, and that Wang Yang and Li Yuanchao may have to wait another five years for their turn -- but the outcome remains far from certain. Regardless of who is elevated, some elements of policy will remain unchanged. A wholesale transformation towards multiparty democracy is not on the cards. Nor is a softer approach towards anything perceived as a separatist threat to China's territorial integrity.

A narrow window of opportunity is open to further the liberalization necessary for China's continued ascent and in turn, the extension of the party's legitimacy. If the new leadership proves too ossified to adapt quickly to the social and economic changes already in motion, it will find itself increasingly unable to put out the new fires that will confront it. A transformation may take yet place, whether the party welcomes it or not.

Victoria Lai is Access China analyst for the Economist Intelligence Unit.

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