November 5th, 2012
07:41 AM ET

3 challenges for China's next leaders

By Global Public Square staff

The most intriguing story this week might play out not in Washington, but thousands of miles away, in Beijing. Why? Well, consider this. We didn't know who the next occupant of the White House would be (now we do), but we have a pretty good estimate of his policies. On the other hand in China, we almost certainly know the identity of the next top leader, Xi Jinping. What we have no clue about is where he wants to take China.

Starting Thursday, Beijing will pick a new generation of rulers - hundreds of new faces. Until a few weeks ago, even the date of this transition was a secret. But come November 8, a new set of leaders will take on a huge backlog of problems. How these issues are dealt with will set the tone not just for China's 1.3 billion people, but for the entire global economy.

Let's look at those problems under three basic categories: economics, politics, and foreign policy.

On the first, we all know that China's growth-rate is slowing. In part, that's because it's now a middle income country and can't grow at 10 percent forever . It's not just the pace but the nature of the economy that is changing. We tend to think of China's growth as driven entirely by exports and state-investment. But look at the data from The Economist. Exports have steadily declined since 2005 as a share of growth in GDP. On the other hand, domestic consumption has risen steadily, accounting for more than half of China's overall growth. That means the internal Chinese economy needs to be reformed and opened up, to make it more productive. That's politically difficult.

One big policy that cries out for reform is the one-child rule. China is getting old. In 1980, the median age was 22. Now it is 35. By 2050, it will rise to 50. China's next leader will face not just an aging population, but one that is also completely imbalanced by gender: among children under 15, there are 117 boys for every 100 girls. That is a social tinderbox.

Another political development that struck me this year is the increasingly public display of anger. It is said there are more than a hundred protests in China every day. Many of these are demonstrations against the country's environmental pollution. But there is also an undercurrent of anger over what is seen as an increasingly corrupt ruling class. Just look at the two biggest stories out of China this year. Former Chongqing Governor Bo Xilai was a rising star one year ago; today he is under criminal investigation for alleged corruption. And just a few days ago, the New York Times ran a story detailing how Premier Wen Jiabao's family is worth nearly $3 billion. No matter how the Communist Party tries to hide or spin these stories, there is a palpable sense of public rage - and it will need to be addressed.

The irony is that Premier Wen himself  has been calling for reform-including political reform - for many months now. But China has essentially put the big decisions on hold this year. Until next week.

Finally: foreign policy challenges. We've witnessed an assertive and sometimes even belligerent China in the last two years. Look at the ongoing territorial dispute not only with Japan, but similar ones throughout the Pacific. Will that change? How will Beijing control a rise in nationalist pride and power? How will it ensure that the United States and China don't drift towards confrontation?

That's a challenge for leaders - in Beijing, and also in Washington.

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Topics: China • What in the World?

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soundoff (117 Responses)
  1. PJ

    China- we'll pay you SERIOUS money to slag Wall Street. Suitcase nuke would do it...thnx!

    November 5, 2012 at 8:35 am | Reply
    • Bill

      Yes, they are the evil bankers and stock brokers who are the cause of all our problems..........Now go back to mopping the floor PJ.

      November 5, 2012 at 9:44 am | Reply
      • JP

        Yep. Bill pretty much summed it for me perfectly. PJ (not to be confused with myself) is a complete total loser. He must be a union steel worker or a stocking clerk at Target.

        November 5, 2012 at 10:34 am |
      • Stephen

        Why do You 2 Retards attack PJ like that Bill and JP?Are You both REALLY that stupid??Havend You 2 pathetic losers ever heard of the Occupy Movement? It's ALL about Money isen't it?Well I say it's about time that We get rid of the entire Worldwide Monetary system and switch to a Resource Baced Economy where ALL goods ans services are freely available without the use of Money,Credits,or Barter and the Earth's Resources become the common heritage of Humanity in general.People could just work for Self enrichment,Self betterment,and for the good of the Community.

        November 5, 2012 at 12:39 pm |
      • Geronimo

        @Stephen "People could just work for Self enrichment,Self betterment,and for the good of the Community."

        Bwahahaha...what planet are you living on? I guess we could all hold hands and sing Kumbaya too.

        November 5, 2012 at 2:50 pm |
      • David

        Oh ignorant Stephen, what you are proposing would be absolute anarchy and by extension chaos. If you think that the global economy is bad now, you ought to see it based on your "resource-only" driven economy. Every part of the world contains a "resource". How valuable that resource currently is depends on how useful it is to the majority of the world. Take oil for example. Oil is probably the top resource in the world because of the global dependency/demand. But not every country in the world has oil or a resource as valuable as oil. Countries that have unpopular resources would surely be at a disadvantage while a select few countries would have the upper hand-more so than the current state of economics.

        November 5, 2012 at 3:35 pm |
      • j. von hettlingen

        China's economy has its demographic advantages to thank for, but not for long, due to its one-child policy. Perhaps the country wouldn't suffer too much with a smaller population.

        November 5, 2012 at 6:18 pm |
    • Stephen

      Hi PJ.Don't listen to Bill and JP.They are just ignorant trolls that have no idea as to what they are saying or talking about.

      November 5, 2012 at 12:43 pm | Reply
      • John

        Yeah you are right. How silly of them to cut some guy up for suggesting someone nuke wall street! Perfect solution, kill people! And since yo brought it up, occupy movement? The single handedly worst protest movement I ever saw! About as organized and directed as you trqain of thought.

        November 5, 2012 at 3:31 pm |
      • Fug Xu

        Stephen is a Red Chinese propagandist, pay it no mind. You'll see them on these blogs spewing nonsense all the time.

        November 6, 2012 at 9:17 pm |
      • BD

        Are you really suggesting that two guys who responded incredulously to someone suggesting that China nuke wall street are trolls?

        Either you deserve a 10/10 or hopefully end up attached to said nuke.

        November 7, 2012 at 3:20 pm |
    • josh rogen

      dangerous, violent, hate filled hippies. never thought the peace movement would devolve into this.

      November 5, 2012 at 2:28 pm | Reply
      • djschaaf

        "dangerous, violent, hate filled hippies" I have never seen one of these creatures.. they must hang out with bigfoot

        November 5, 2012 at 6:16 pm |
      • BD

        They're not hippies, they're political science dropouts and people that can't do math.

        Occupy wall street accomplished nothing other than perhaps lowering the country's GPD for a few days. Protesting (if you can call assembling for no particular reason with no particular demands protesting) Wall Street while a democratic administration is in power that has constantly come down on the side of further regulation is just stupid.

        The whole movement was the idealogical equivalent of trying to stop it from raining but shooting a water gun at the clouds. I'm not suggesting you have to like rain but you might want to try something that common sense tells you will actually effect the rain let alone effectively stop it. At the end of the day, OWS was a meaningless distraction that took away from the legitimate conversation the country needed to have in a fashion that was just as bad as anything the tea party has done.

        November 7, 2012 at 3:34 pm |
    • allenwoll

      Solution to Gender Imbalance - Bring on the Fundamentalist Church of Latter Day Saints! Problem solved !

      November 6, 2012 at 2:38 am | Reply
    • Fug Xu

      Here we have a terrorist wanting someone to use a suitcase nuke on U.S. soil. The dregs of the human race right here on display for all to see.

      November 6, 2012 at 9:20 pm | Reply
    • Triston

      I have a solution to this dilemma at hand. How about those (such as myself) who are unsatisfied with the United States move to a location where they feel that life is adequate. Not only would this solve our problem with American idealism, but it would also diversify the world's major nations. This has already started to take place, but with a large and designated movement of individuals it would merely enhance the process.

      November 7, 2012 at 9:58 am | Reply
    • BD

      You, sir, are a buffoon.

      I'd award you some respect for the epic hyperbole but the supreme irony of your statement, coupled with the fact that you seem completely unaware of it, simply make you laughable rather than midly amusing.

      November 7, 2012 at 3:23 pm | Reply
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      June 20, 2013 at 11:51 am | Reply
  2. peterbatt

    Reblogged this on Peter Batt and commented:
    China: The shape of things to come...

    November 5, 2012 at 9:30 am | Reply
  3. Bill

    China's biggest problem in the increasingly vocal 600 million people who will never achieve a middle class status. Eventually, they will want a share of the pie they will never receive. That is when the ugly starts.

    November 5, 2012 at 9:45 am | Reply
    • wranglerick

      You are right on the mark, someone is going to wake up the masses. Many will probably die, but somewhere down the road they will want a piece of that pie

      November 5, 2012 at 4:24 pm | Reply
      • j. von hettlingen

        The wealth-gap is a real problem, which has to do with the fact that those who can, walk over dead bodies. It's a jungle of social Darwinism, that becomes a potential tinderbox.

        November 5, 2012 at 6:22 pm |
    • mimi of Toronto

      That's right, and when they do, the army will come in and kill & destroy whatever is in their way, just like they did at Tienanmen Square – they used their tanks on them. Communist China doesn't care about its people, just their own position in the ruling party. And of course, an impressive army to show off to the whole world. Here, they spare no expense because that's all what CCP cares about.

      November 13, 2012 at 6:29 pm | Reply
  4. Shane

    I don't have a good estimate of what a Romney White House Might do. And neither does Mitt Romney.

    November 5, 2012 at 10:23 am | Reply
    • Geronimo

      Unfortunately, we already know what Obama would do.

      November 5, 2012 at 2:51 pm | Reply
  5. infinitesr

    I vote for Tank Man.

    November 5, 2012 at 10:29 am | Reply
  6. www.twitter.com/hlmelsaid

    Media age average.

    November 5, 2012 at 10:30 am | Reply
  7. JP

    China's middle class will never fully develop until they float and freely trade their currency. Much of the population can't afford to buy many of the goods they mfg and produce. They will not be able to do this until the currency is allowed to appreciate.

    November 5, 2012 at 10:37 am | Reply
  8. me

    I'm waiting for their government to "lock the doors" sorta speak and have control over all US companies, locking the CEO's out 🙂 That'll be a great day, to see those POS live like we all do!

    November 5, 2012 at 10:59 am | Reply
  9. Dan, Tx

    China has many internal problems. Perhaps to defuse this the political elites of Beijing will turn to whipping up greater nationalism. They may want America to become an enemy to protect their domestic politics. American politicians may want to make China an enemy to create fervor in their supporters. No one wants a devastating war that kills millions in both countries. But it is a chance we'll have to take to maintain control over the lower classes in both societies.

    November 5, 2012 at 11:51 am | Reply
    • Stephen

      There is an obvious solution to that problem Dan Tx.It's called a Worldwide Resource Based Economy. In a Resource Based Economy,all goods and services are freely available without the use of Money,Credits,or Barter and all the Earth's Resources become the common heritage of Humanity. For more information,go to http:www.thevenusproject.com and/or http://www.freeworldcharter.org .Thank You.

      November 5, 2012 at 12:52 pm | Reply
      • Ed

        Stephen, you're kidding right? If all the world's resources were free, the following would happen: (1) people would consume as much as possible like locusts until there was no more available, (b) farmers, miners and everyone else would arm themselves to defend "their" resources, (c) the more complex resource extraction and processing activities would not occur at all, (d) technology would back to the Middle Ages, at best, (e) and 5+ billion people would die, mostly from starvation. Maybe try something else instead?

        November 5, 2012 at 8:38 pm |
  10. Sonny

    3 challenges are:
    1. How to oppress more to their people
    2. How to take over other countries's islands and lands
    3. How to starve the poor more.

    November 5, 2012 at 12:29 pm | Reply
    • Stephen

      Go to http://www.savetibet.org .

      November 5, 2012 at 1:04 pm | Reply
      • Tim

        Save Tibet? u dont need a website for that. you just need the Dalai Lama and the CIA

        November 5, 2012 at 3:40 pm |
    • mimi of Toronto

      I couldn't agree with you more Sonny. China only cares about their army, the rich & the elite, and skilled professionals. They could care less for all the poor and unskilled, they don't stand a chance. They will be immediately be the guilty one, if they are ever in dispute with any of the mentioned above favorites. So people of China wake up, Communist Party does not care about you people, they just care about making their army mightier, show off to the world how great super power they are, while letting the majority of the people face hardships & struggle to survive. Sadly, if you speak up against your CCP, against your government, you'll be jailed without any justice or proper representation. Your fate will be sealed. This is how they deal with anyone speaking out. People of China, learn from the past – have you forgotten "Tienenman Square" incident?

      November 5, 2012 at 5:45 pm | Reply
      • theneweveryman

        'China only cares about their army, the rich & the elite, and skilled professionals. They could care less for all the poor and unskilled, they don't stand a chance.' I believe at this point in time and human devolpment the term 'China' and 'The United States' are interchangeable. Before this century is over large swaths of this planet will be aglow in radioactive waste and the elite will emerge unscathed from their bunkers in Beijing and Washington, DC to rule over the survivors.

        November 5, 2012 at 6:52 pm |
    • marinayrr

      Shows you don't know too much of what's going on. Talk facts not just vent.

      October 20, 2013 at 3:48 pm | Reply
  11. Jonathan1243

    China is increasingly becoming the boogieman for the United States. Likewise, the United States is increasingly becoming the target of vehement nationalism within China. The "century of humiliation" is still fresh on the minds of the Chinese who are increasingly reminded of the West's exploitation of their land during the heyday of colonialism. Whether we like it or not it seems both countries are on a collision course. God willing the leaders of the respective nations learn to play nice with one another and save us from a disaster that has the trappings for World War III.

    November 5, 2012 at 12:34 pm | Reply
    • Stephen

      And what about China's horrific treatment of Tibet Jonathan 1243??? It's obviously NOT fair that China has FORCEFULLY taken over Tibet causing the His Hollyness the Dali Lama to have to Live in exile,illegaly kidnaped the Panchem Lama doing God knows what to Him,made repeted attempts of Cultural Genocide in Tibet,and is responsible for horrendis Human Right's Abuses of the Tibeten People!!

      November 5, 2012 at 1:02 pm | Reply
      • mimi of Toronto

        You are so right Stephen. China is just a big bully & greedy. They took over Tibet because they simply could with their military power, which is no match for Tibet. Then once they had Tibet under their control, under the pretense of "taking care of China's ethnics," they have been slowly killing off Tibet's heritage, their culture, religion and their language. China is intent on erasing the Tibetan people completely so that there will be no trace of Tibetans in Tibet to fight for Tibet. They want Tibet for the land space for the over-populated China, and want the unused rich natural resources to benefit China, not the Tibetan people.

        November 5, 2012 at 1:54 pm |
      • AMI

        Both of you morons! Let me teach a little bit World History 101. You don't know Dali Lama is one of the richest man. He owns several tons of gold, only part of his wealth. All these are squeezed out from his "own" Tibetans! Tibet has been under jurisdiction of China for more than one thousand years, a little longer than the West Expansion by whites, oh? You can slaughter Indians like weeds, but don't allow others to take necessary measures to keep peace and stability. Settle down, learn some history and mind your own business.

        November 5, 2012 at 3:45 pm |
      • jesuguru

        Congratulatins comrade AMI, you may collect your 50 cents now.

        November 5, 2012 at 10:43 pm |
      • mimi of Toronto

        People like AMI & Wahaha can't take the truth. They are the type what you call, "blind faith/patriotism). Nothing is going to change for China if the core mentality does not change. 1) Stop the top-level corruption (legal system stinks). (2) Stop the greed, you have laid enough claim already & illegally taken neighboring countries. (3) Take care of your own people (all people), poor, uneducated, unskilled, not just the army & the elite rich. This is the only way China will gain any respect internationally. Just saying!

        November 13, 2012 at 4:55 pm |
      • marinayrr

        I guess china is just as big bully and greedy as our u.s. banks. Banks manufacture fraudulent assignments with robo signors to go in and rob millions of homes. They do it simply because they could...clueless hopeless helpless homeowners become fed up put up shut up. Banks are laughing their way to their banks...
        Just like Leonardo D. movie..."catch me if you can."

        October 20, 2013 at 4:14 pm |
      • marinayrr

        mimi of toronto, everything you said on your nov 13th 2012 post is interchangeable with u.s. 1) legal system sucks – try follow all those federal and state foreclosure lawsuits going on the injustice makes you cry. Watch http://www.pbs.org FRONTLINE videos "The Untouchables" and "Money ,Power, and Wall Street" to open up your mind. 2) Nobody knows more about greed than our u. s. banks. Again the pbs videos can teach you a lot. As for the neighboring islands...again study your history. No spin zone, just the facts. 3) All the things you said in 3...ditto for u.s.

        October 20, 2013 at 5:10 pm |
  12. defender

    yes,the GDP of china is slowing down.but compared to the economic situation in Eupean and US, china is obviously much more better.at least it got lower unemployment percentage !

    November 5, 2012 at 1:00 pm | Reply
  13. mike johnson

    ... like have said so many times before ... China is another bubble about to pop ... and the growth has been largely achieved thanks to low wage workers and unneeded infrastructure projects ... it's happening folks, give it a couple of years ...

    November 5, 2012 at 2:46 pm | Reply
  14. Nan

    Stephen, I am afraid that you are wrong. In China, we always complain that the government give more privileges to Tibetan, which is also part of the Chinese. You should have a trip in Tibet. The real Tibet is totally different as you thinking. The so call the His Hollyness the Dali Lama is just a puppy of CIA. You can find the report about the CIA and Dali. Couple moths ago, a Germany News paper reported it. http://themoderatevoice.com/149458/guerilla-files-exposed-%E2%80%98cia-funding-for-the-dalai-lama%E2%80%99-la-repubblica-italy/

    November 5, 2012 at 2:52 pm | Reply
    • mimi of Toronto

      Nan, you must be reading only the "China Times" – your source of information is nothing short of "BS." I AM from Tibet and I know exactly what's going on there. We've lived it and experienced it, so just stop with your nonsense about the real Tibet and that the Tibetans there get all the priviledges – you must be out of your mind! What an _ SS OL!!

      November 5, 2012 at 3:41 pm | Reply
      • Wahaha

        Politically, you are not even as smarter as a fifth grade.

        November 5, 2012 at 9:23 pm |
    • mimi of Toronto

      Nan, perhaps you can do a big favor for Wahaha; some English tutoring might help him to better articulate his thoughts. He seems to need some help there.

      November 13, 2012 at 5:21 pm | Reply
  15. sarge

    China's main challenges are:

    1. Individual freedoms vs. the collective.
    2. Corruption within the ruling class.
    3. Establishing a free market.

    November 5, 2012 at 2:55 pm | Reply
    • mimi of Toronto

      I'd say the 3 main challenges are:

      1) Corruption
      2) Corruption
      3) Corruption/Zero transparancy – in other words "Cannot Be Trusted"

      November 5, 2012 at 4:42 pm | Reply
      • inquiry

        The New Yorker has an excellent article which describes in detail how widespread corruption contributed to the china high speed rail disaster. The depth and breadth of corruption in china is unbelievable. china is heading for a hard fall if it can't clean up its act.

        November 7, 2012 at 6:50 pm |
  16. pkt729

    The 3 real problems that China`s economy is facing are: 1- Aging population; 2- Child policies; and 3- Resources.

    November 5, 2012 at 4:13 pm | Reply
  17. Jt_flyer

    By 2100 We will Need to Produce an Amount of Food That is 2.5 times greater than all the human societies have produced in the last 8,000 years

    That's a problem!

    November 5, 2012 at 5:37 pm | Reply
  18. outawork

    1) not enough woman
    2) Find new ways to kill Tibetans
    3) Create new black hair dye

    November 5, 2012 at 7:23 pm | Reply
  19. Impeach

    China. Please take Obama off our of our hands.

    November 5, 2012 at 7:29 pm | Reply
    • MR Bleak

      If obama has to go then Bush and co needs to face war crime charges in The Hauge.

      November 5, 2012 at 7:49 pm | Reply
  20. MR Bleak

    China will be at war with itself before they go to war on the world statge. This report could not understate the seriousness of polution dilmea that nation faces. I think that in the next 30 years their biggest challange will be hadnling the hundredes of millions of cancer cases and other ailgments brought to them throught thier toxic eviroment.

    November 5, 2012 at 7:47 pm | Reply
  21. jp

    every country has problems. china has problems but the media makes it look like those routine problems are somehow special or especially dire. look at things from a historical perspective, people. US has had 23 depressions with a D. Slavery, native american depopulation, etc. this is normal, and the article does a good job highlighting internal issues, but again, these are NORMAL.

    November 5, 2012 at 8:11 pm | Reply
  22. Wahaha

    Unbelievable, brainwashed laughed at others :

    (1) How can Chinese be brainwashed when 50+% like the democracy in America (but since 2006, 80+% like the direction of their country).

    (2) Do American people forget the most urgent issue, the fiscal cliff? unbelievable, the minds of American people are completely controlled by their media : they talk what media want them to talk; know nothing unless their media brings it to them.

    November 5, 2012 at 8:55 pm | Reply
    • mimi of Toronto

      Wahaha, just listen to yourself. You are being critical of the US media but don't see anything wrong with China's media? It's a big joke – pathetic to say the least. I wouldn't want to live there even if I was paid millions to do so. No thank you! If you're fighting against the government, you have no voice, no proper representation – there's no justice system, you're toast. Just think about this, had that informer who exposed Bo's activities, not gone to the US Embassy to seek asylum, none of that story would have come out. You say Americans are controlled by media, but at least it's out there and all people are free to engage and decide for themselves, but people in China are totally under the control of the ruling party. I don't think a dumb person will need any help in deciding which he/she would prefer, I rest my case.

      November 13, 2012 at 6:03 pm | Reply
  23. Wahaha

    3) Corruption/Zero transparancy – in other words "Cannot Be Trusted"

    ************************************
    Do you know what the rich and unions get from their political donation?

    Most politicians have business background. Do you know what their businesses benefit from their political power?

    I guess you want to know because media wants to know. If media doesn't mention it, you don't even know there is huge hole in your pocket.

    November 5, 2012 at 8:59 pm | Reply
  24. Judywire

    A world of no money, credit card or barter? If this is what Stephen wants to practice, he is free. There are woods in the USA and lots of them. He should just disappear into one of them and have a blast. The problem we have in this world is people trying to impose their ideology on others.

    November 5, 2012 at 9:32 pm | Reply
  25. econprofessor

    Reblogged this on Econoblog.

    November 6, 2012 at 7:15 am | Reply
  26. Ethics.Intl

    ****China is now blocking the NY Times, Bloomberg and all CNN pages referring to Chinese censorship and/ or Chinese government corruption ***

    Searching 'China corruption' or anything similar on any search engine is also being blocked.

    (From Beijing, China)

    November 7, 2012 at 6:00 am | Reply
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