Li’s ties to Hu Jintao go back nearly 25 years and he is among the most enthusiastic supporters of Hu’s call for building a “harmonious society,” which places top priority on reducing economic disparities, establishing a social safety net, and providing basic public health care. As Liaoning Party Secretary, Li Keqiang identified the tasks of building low-income housing and increasing employment as “priority projects.” Understandably, less privileged social groups, especially those in the vast interior and northeastern regions, have often viewed tuanpai leaders as their best advocates among the top leaders of the Party.

Yet Li's lack of achievements as a provincial chief in Henan and Liaoning, combined with public perceptions about his “bad luck” may undermine his chance to become the top leader. Party cadres still remember the three mass-fatality fires that occurred in Henan during Li's tenure as provincial governor and Party secretary there. His detractors say he has trouble making tough decisions, in contrast to Hu, who is known to play hardball when the situation warrants.

So, why has the Party put Xi and Li in competition with one another? Why would Hu not simply appoint Li, his protégé? Unlike the days of Mao and Deng, Chinese presidents today must govern by consensus, not by fiat. By selecting Xi as one of the two top candidates for his succession, Hu not only extends his own power network, but also undercuts any potential criticism of his political favoritism for tuanpai leaders such as Li Keqiang. Hu's objective is to avoid the emergence of clear divisions and conflicting interests between princeling and tuanpai leaders, between the coastal region and interior provinces, and between the advanced economic sectors and the social groups that have lagged behind during the reforms. Accordingly, Hu allowed Xi to be in charge of party affairs and Li to be more involved in economic administration in an effort to blur the distinctions between two diverging career paths.

Indeed, a vicious power struggle between Xi and Li and the factions they represent is hardly inevitable. If Xi were to succeed Hu Jintao as secretary-general of the Party in 2012, Li might well be named the successor to Wen Jiabao, who holds the country’s No. 2 post. Xi’s new position as the highest-ranking member of the Secretariat and the anticipated appointment of Li as the executive vice-premier suggests such an arrangement may be in the making. For the next five years, under Hu’s watchful eye, these two potential successors may cooperate rather than squabble. Without question, Hu and the Party are making a big gamble. And, given the stakes, it’s a wager China’s leaders can’t afford to lose.