China's New Leadership

China has made considerable efforts to lift people out of poverty. Unbalanced and unsustainable development, social problems and corruption remain, however, serious challenges. The two main fractions, 'Tuanpai' and the 'Shanghai group', are jostling for key positions. The new Communist Party Secretary-General, and future President, Mr.XI Jinping, is a princeling whose political beliefs remain largely unknown. The second-in-line and future Prime Minister, Mr. LI Keqiang, is from the Tuanpai faction. Three leading contenders, all reformers, did not make the cut. The balance of power between conservatives and reformers remain unclear. The new leaders will have to carry out economic and social reforms. The once-in-a-decade leadership reshuffle is unlikely to open the door for political reforms. Beijing's increasingly assertive foreign and security policy will continue. Major personnel changes will take place again in 2007.