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The People’s Republic of China has completed its first smooth transition of power since its founding more than half a century ago. The National People’s Congress, the Parliament, ended its two-week session on Tuesday after electing Mr. Hu Jintao as president and Mr. Wen Jiabao as premier. The two men represent a younger generation of Chinese leaders. Mr. Hu is also general secretary of the Chinese Communist Party, while Mr. Wen is a member of the Politburo Standing Committee.

The road ahead is anything but smooth. If everything goes well, however, the Hu regime will steer a prospective superpower in the fast lane of economic growth over the next decade. In reality, China’s future is filled with as many uncertainties as expectations. The communist state faces a mountain of difficult problems, including economic and political reform, that will severely test Mr. Hu’s leadership.

The change of government leadership, following as it did last November’s party leadership reshuffle in which Mr. Hu and other younger leaders took command of the Communist Party hierarchy, contains no elements of surprise. As expected, Mr. Jiang Zemin, who has retired as party chief and state president, has stayed on as chairman of the Military Commission, which oversees the People’s Liberation Army. This means that Mr. Jiang will continue to wield power behind the scenes. Significantly, many delegates, presumably Mr. Jiang’s critics, abstained from voting for him.

In broad terms, the Chinese people are looking for two things over the long run: continuation of the present high rate of economic growth and correction of the distortions that come with it. China today appears to be experiencing a kind of crude capitalism similar to what flourished during the Industrial Revolution. A gush of economic prosperity is bringing to a head a plethora of problems, such as widening class and regional disparities, rampant corruption, high unemployment among underprivileged workers and runaway environmental destruction.

Mr. Hu’s visit late last year to the sacred birthplace of the communist revolution, a region now on the fringes of economic development, was symbolic of Beijing’s willingness to address these problems. There, Mr. Hu extolled the virtues of “honest poverty” and “hard work” — two of the Communist Party’s founding principles. In a similar morale-boosting move, Mr. Wen early this year toured a state-owned colliery in a rust-belt area.

Political reform is probably the most difficult of the problems left over from the Jiang era, which lasted more than a decade. The challenge for the new leadership is to achieve long-term political stability through democratic reform. This requires transforming the elite-controlled Communist Party into a “people’s party,” a slogan adopted by the last party congress. For that to happen, a system of direct elections, which is already in place in the countryside, must be introduced in urban regions as well. Eventually, the People’s Congress, now regarded largely as a rubber stamp, must be made, both in name and spirit, the highest representative body of the country.

Internationally, one cause for concern is that China appears to be looking inward, perhaps in an attempt to keep a lower profile in the arena of global politics. This seems to reflect a desire to maintain a distance from international conflict at a time when the country is devoting itself to economic development. China’s cautious response to the looming U.S. war against Iraq — Beijing reportedly had intended to abstain on a new U.N. resolution authorizing the use of force — indicates that the Chinese want to stabilize their relations with the world’s only remaining superpower on a long-term basis.

However, the North Korean crisis is likely to pose a big foreign-policy challenge for the new Chinese government. Diplomatic sources in Tokyo say Washington sees Beijing as taking a “free ride” in the Sino-American relationship. Should the situation on the Korean Peninsula deteriorate further, China would most likely find itself sandwiched, as it were, between its longtime friend, North Korea, and the United States, with which it has improved ties since the 9/11 terrorist attacks.

The Hu-Wen leadership is a good omen for Japan-China relations if only because the two leaders have little personal experience with the Sino-Japanese War. Indeed, a lack of war memories may provide a psychological incentive for better relations between the two nations, which have often quarreled over historic views of Japanese militarism. Encouragingly, a growing number of Chinese are reportedly coming around to the view that, in the long run, an obsession with the past will hurt China’s national interests. Prudence, as well as realism, on the part of Japanese people is also needed lest these welcome trends be nipped in the bud.

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