There has been a smooth transfer of power in China following the Communist Party congress. Xi-Jinping assumes the top post of general secretary of the party replacing Hu Jintao. Hu has also handed over the leadership of the military to Xi. By next spring, Xi will be President of China. Li Keqan will be Prime Minister. Outgoing President Hu had been under fire for slowing down growth, encouraging corruption, neglecting backward sections of society, allowing riots to erupt in the countryside and beefing up army power. Of course, wages have risen but the export-driven growth has become sluggish. A shift has occurred from cheap, low-end manufacturing to high value-added commodities leading to a boost in consumption. The question now is: how will the new leadership face the emerging challenges?
India is naturally concerned about the shape of things to come in China. The border dispute between the two countries has not been settled. But trade between India and China has grown in volume and the fear of Chinese goods swamping Indian markets is lessening. However, the trade deficit is heavily weighted against India. India has not been pro-active in the Bay of Bengal and the Indian Ocean unlike China which is building up its position in neighbouring seas. The oceans are vital in maritime traffic in energy from West Asia. Indian efforts to strengthen ties with Myanmar, Thailand, Cambodia and Vietnam have not been very effective. Delhi is now doing its best to cash in on the Myanmarese economy opening up.
Nothing significant has emerged from the Chinese Communist Party congress in the political sphere. It is to be hoped that the military will lose some of its ascendancy. But the party remains supreme and there has been nothing but mere tinkering with the totalitarian structure of the polity. But the campaign against corruption is significant. From the Indian point of view, the liberalization of the Chinese economy is more important than political systemic changes.