Now that the U.S. election finally is over, it's time to focus on the other most important leadership transition in the world: China's.
Like the United States, China is also at a turning point, and though the specifics differ, the crux of the problem is the same: major structural change is critical to sustained future growth and stability, but the country's current leaders have been unable, or unwilling, to implement the necessary reforms to shift its economy onto a path of sustainable development.
If anything, China's heirs apparent have the harder task.
Unlike Barack Obama, for instance, the incoming leader Xi Jinping won't be able to choose most of his own team. Beginning Nov. 8, when the Communist Party convenes its 18th Party Congress, and continuing in March 2013, Beijing will in two steps replace about 70 percent of the incumbents in its top communist party, government, and military bodies. China watchers expect Xi Jinping and Li Keqiang to ascend to the most powerful two spots on the Politburo Standing Committee, the country's highest decision-making body, but nobody outside a small circle of insiders knows who will fill the other 5-7 spots -- let alone what those individuals think about how to run the world's second-biggest economy and one of its major military powers.
Nor is the president of China as powerful as is commonly assumed. Since Hu Jintao, the outgoing leader, ascended to the top job in 2002, collective leadership built around consensus decision making has become the norm. Each Standing Committee member manages a distinct part of the overall Chinese system. The outgoing premier Wen Jiabao runs the cabinet, Zhou Yongkang runs domestic security, and so forth.
This system has its advantages, such as the ability to mobilize enormous resources and act quickly when all Standing Committee members agree on a priority course of action. But it has also produced a willingness to spend more money on top priorities ("you vote for my priority and I'll vote for yours"), coupled with an inability to adopt decisions that seriously disadvantage any member's sector, such as reducing subsidies to major state-owned enterprises or cutting back the scope of the civilian security apparatus. There have thus been no major structural reforms in China for the past five years, and few in the half-decade before then.
The recognition of the need for sectoral reform of the Chinese economy -- and related political reforms to make that happen -- is so widespread that Xi undoubtedly has this on his agenda. But it is unclear how high a priority he attaches to this or whether he can fairly easily be dissuaded by other considerations.