China’s new leader, Xi Jinping faces uneven economic growth, corruption and pollution.

Xi Jinping officially became China's new leader on Thursday, March 14, 2013, ending a once-in-a-decade transition of power that began at last November's Communist Party National Congress. Xi Jinping, 59, who replaced Hu Jintao, also has a new Premier, Li Keqiang, who took over from Wen Jiabao. Xi Jinping takes over at a time China is threatening to overtake the US as the world’s biggest economy in the next few years. Yet, the challenges ahead of the new Communist Party leadership abound. They include balancing uneven economic growth, tackling environmental pollution, corruption and foreign policy issues.

Boosting Domestic Consumption

Xi Jinping inherits an economy that grew last year by 7.8 per cent, its weakest level since 1999. Inflation is running at its highest level in 10 months, posing a headache for policy makers. Latest economic data shows that industrial production and retail sales grew by less than expected at the start of the year, pointing to an uncertain outlook. Xi will be closely watched to see how his government tries to shift China's economy to one driven by consumption instead of investment and exports in order to be on a more sustainable growth path in the long-term.

Surpassing US Economy

One major challenge for Xi is boosting the country’s economic growth. China’s GDP grew annually by more than 10 per cent over the past three decades before the global economic downturn. This growth saw the country surpassing Germany and is now threatening to overtake the US by 2017. However, Beijing was still hit by the global credit crunch, and has witnessed an economic slowdown. This could hamper China’s current expectations for the next four years to become the world's biggest economy.

Pursuing Reforms

Delegates to the National Communist Party Congress that ended yesterday, March 17, 2013 approved a government restructuring plan. Among other things, the plan abolishes the Railways Ministry and combines two agencies that regulate newspapers and broadcasters into a super media regulator. It also merges the Health Ministry with the commission that oversees rules that limit many families to one child. The restructuring also joins four agencies that police fisheries and other maritime resources into one bureau. Xi Jinping and his team have to pursue the momentum of reforms to make China a true world power.

Curbing Corruption

Since November 2012, Xi Jinping, the son of a reformist Vice Premier, has embarked on a campaign to end corruption. Just ahead of the Chinese New Year celebrations last month, Chinese authorities cracked down on gift giving. Last November, former leader, Hu Jintao, warned that if corruption was not properly tackled, it could prove fatal to the party and even cause the collapse of the State.

Environment

Pollution is a major concern in China with Beijing often shrouded in smog. The first two months of 2013 were the worst on record with pollution levels reaching over 30 times the safe limit. A recent study suggested that one third of industrial waste water and more than 90 per cent of household sewage in the country was not properly disposed.

Foreign Policy

North Korea, a long-time ally of China, recently announced it had cancelled the armistice with South Korea that ended the Korean War. Of immediate concern to the new Chinese leader is how to pacify its ally that has threatened to strike at ‘aggressors’, following UN sanctions over North Korea’s alleged nuclear programme. On the other hand, both the US and China have accused each other of theft of data from computer networks, in an issue that has increasingly grabbed the headlines in recent months. All this is expected to engage the attention of the new leadership.