The Good News About China's New Leadership

Agenda-Setting Financial Insight.
Nov. 15 2012 2:18 PM

The Good News About China's New Leadership

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Chinese Vice President Xi Jinping (Front), one of the members of new seven-seat Politburo Standing Committee, delivers a speech as (L-R) Zhang Dejiang, Li Keqiang, Yu Zhengsheng and Wang Qishan stand at the Great Hall of the People. China's ruling Communist Party today revealed the new Politburo Standing Committee after its 18th congress.

Photo by Feng Li/Getty Images

The seven men who will run China’s ruling party for the next five years have a tough job. Two of them, party chief Xi Jinping and premier-in-waiting Li Keqiang, have been groomed for years, but even they are little known. Are they up to it? Breakingviews has scored them on five key criteria, and found some scope for encouragement.

1. International experience. Only Wang Qishan and Zhang Dejiang have spent significant time abroad - and Zhang was in North Korea. On the plus side, Li speaks English. He and Xi have personal reasons to keep U.S. ties friendly: both reportedly have offspring studying there. Score: 6/10.

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2. Crisis management. Wang, highly regarded by senior Western bankers and economists, helped clean up financial crises in Hainan and Guangdong. But his new anti-corruption role may spread him too thin. Li ran Henan in the aftermath of an AIDS epidemic, while Zhang was vice premier in charge of industry and transport during last year’s railway corruption crisis, although both took a “crack down first, ask questions later” approach. Score: 7/10.

3. Economic growth. Many of the newcomers, like Tianjin boss Zhang Gaoli, have worked in rapidly growing provinces. But growth alone isn’t what China needs, and the team lacks direct experience of disenfranchised provinces like Tibet or Xinjiang. Still, all can take some credit for the relative stability of the past decade. Score: 7/10.

4. Factional ties. Five of the seven have clear career ties to Jiang Zemin, the influential ex-president. Only two have links to Hu Jintao’s Communist Youth League. Three of the seven are “princelings” – children of former leaders -  and another is married to one. If patronage counts, expect policies that protect the rich. Score: 5/10.

5. Diversity. Seven suited men, all from China’s Han majority, aren’t exactly a mixed bunch. There are slight differences of education: it’s no longer just a collection of science graduates. But the team that purports to serve the people is still far from representative. Score: 5/10.

The party deserves some credit for changing the script a bit. Unlike his predecessor, Hu is also giving up the top army role from day one, which may signal trust in Xi. The line-up has also been changed to reflect the fact that the premier, who officially ranked third in the party hierarchy, is really number two. In such a rigid framework, any sign of change is a bonus. Overall, China’s new leadership gets 6.5 out of 10.

Read more at Reuters Breakingviews.

John Foley is breakingviews' Greater China correspondent, based in Hong Kong. He previously wrote on mergers and acquisitions, capital markets, consumer goods, mining, and luxury.

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