China after the Communist Party's 16th congress

Jusuf Wanandi, Co-founder, Member, Board of Trustees Centre for Strategic and International Studies (CSIS), Jakarta

The outcome of the 16th Congress of the Chinese Communist Party (CCP) has to be understood in historical terms. As China develops into a vibrant economy, there has been some opening towards greater individual freedoms and liberties. This also may have affected the Party and the leadership in general. The 16th Congress is only an expression of those developments and modernization, going back to the ideas of Deng Hsiao-Ping.

However, this does not mean that China has overcome its problems. On the contrary, she still has enormous problems to face, largely due to her huge population, the excesses during the Great Leap Forward and the Cultural Revolution under Chairman Mao Tze-Tung whose aftermath is still being felt. But those experiences are also a warning to the leaders and the Chinese people to never return to those nightmares again.

The successes in modernization and development efforts have created big new problems as well. Despite the remarkable economic growth, there is significant unemployment. The challenges of restructuring and reforms of the banking system and state-owned enterprises (SOEs), paired with corruption and nepotism and coupled with discrepancies of wealth, are indeed very real.

On top of its economic problems, China and the new leadership have to face political problems that result from the successes in economic development and the rise of a bigger middle class. She also faces the problems of renewing the Communist Party so as to be relevant in the future, people's participation in the rural areas and urban centers, the rule of law, and control of the bureaucracy and the party. But her achievements have also been tremendous.

This has made the Chinese people and its leaders very proud and confident about their achievements and future. Indeed, they should be, because feeding and taking care of the basic human needs of 1.3 billion people, more than a fifth of humankind, is a tremendous and dramatic achievement. Now, the problem for the new leadership is how to improve even further and to modernize China to become a developed nation in another generation, 20 years or more.

For East Asia, China's economic development has been the only bright spot since the financial crisis in 1997. It has become a competitor and challenge and at the same time a partner and an opportunity for the economies of the region.

China has also become a prudent regional power, more traditional and conservative, a pro status quo power and one which is starting to link up with the region more intensely and responsibly. Her engagements with regional institutions are real. She is sometimes still too sensitive about her own interests but is less strident about this than a few years ago.

There is a lesser burden from her history that is full of defeats and shame caused by Western and Japanese colonial powers. That is why she is now more comfortable in her bilateral relations with the United States, although real problems are still there, particularly the Taiwan issue and the future development and ambition of China to become a great power on her own right. That is also why China astutely proposed a free trade agreement with the Association of Southeast Asian Nations, in order to cultivate and assure ASEAN's friendship.

With this background, the changes that have happened at the 16th CCP Congress could be better understood and appreciated. It is not simply a matter of who is in and who is out, or whether Jiang Zemin could maintain his influence with this new, fourth generation leadership, and whether the new Chairman, Hu Jintao, can consolidate his power or not.

It is obvious that Chairman Hu has been groomed since Jiang was the Head of the Party, to replace him. So he is well prepared and has established his relationship with the group he is leading now.

Of course he needs time to consolidate his leadership. Since he was also a former Head of the Party School, it could be observed that he was willing to listen to new ideas and to future problems, including a looming crisis and how to overcome it. He is willing to discuss crisis management problems and those of other countries, including Indonesia's.

Obviously, since China's problems and challenges are huge, the new line up of the Party's leadership is both a compromise and a consensus. It is a collective leadership.

Only if the leadership can stay united and the growth of the economy can be sustained at seven percent to nine percent annually, will the leadership have a fighting chance to modernize and be abreast of the problems. They must recognize the damage that could be caused by human follies and personal egos of the leaders. They want to hear and get enough feedback, including on political development problems.

Whether they are brave and at the same wise enough to overcome the problems of change is of course the crucial problem. As has been experienced by other countries in the region, political change is more difficult to face and overcome than economic ones.

China's elite is in general quite satisfied with former Chairman Jiang's achievements and will not likely rock the boat easily. The nightmares of the great leap forward and the cultural revolution are still so vivid and this will restrain the elite from going overboard in opposing the new leadership.

In a sense, Jiang's "Three Represents" are pragmatic proposals and are less of a philosophical or ideological proposition. It is a pragmatic answer to new problems, namely of how to get more support of the "productive forces" (namely the "entrepreneurs" and the other professionals) to the economic and most probably also the political development of a future China.

This is an effort to make the Party relevant to future developments. The regional environment also has been much more favorable to China, particularly her relationship with the U.S. Therefore, she will not divert the attention and energies away from her need to develop and modernize further.

For Southeast Asia and Indonesia, a stable, and modernizing China will produce a positive environment, and will provide the region also with an opportunity to develop and modernize at the same time.

In that sense, the peaceful change of leadership in China, for the first time in her modern history under the CCP, is a positive development.