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New Leaders in China

November 2012

A new generation of leaders will take over in China and they may have more freedom to take bold economic action.

The handover of power in China, which began at the meeting of the 18th National Party Congress in Beijing on 8 November, is Chinas’ most critical event of the decade and will last for seven days

In stark contrast to the USA presidential election with all its glitz and glamour and media coverage, China will this week anoint its new leader Xi Jinping behind the doors of the monumental Great Hall of the People.

The two could not be more different, but both have equal importance to the global economy.

In China, as well as formally confirming Mr Xi as successor to Hu Jintao, the purpose of the congress is to affect a well-organised transfer of government to a new generation of leaders. At the same time it will endeavour to ensure 1.3 billion Chinese that the party is strong, progressive and well placed for the future.

Xi Jinping, the 59-year-old Vice-President, has been announced as the next leader of the Communist Party and therefore automatically becomes President of China from next March. He currently serves as the top-ranked member of the Central Secretariat of the Communist Party of China, the country’s Vice President, Vice-Chairman of the Central Military Commission, President of the Central Party School and the 6th ranked member of the CPC Politburo Standing Committee, China’s de facto top power organ.

Economist will be relieved that at least on the political front the world’s two largest economies have gained some certainty with the election on Barrack Obama and Xi Jinping.

Mr Xi seems to be sitting pretty. Growth in China has slowed, but to a rate that remains the envy of the world, while Chinese industry continues to spread around the world. Obama will have to resolve the government’s budget deficit, bring down unemployment and refresh American attractiveness.

Whilst we try to digest the results of the US elections, it might seem obstinate to be thinking about the regime change in China, but the truth is that what is happening in China will almost certainly have more impact on life in Australia than the US elections.

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