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In 2010, China surpassed Japan in terms of GDP to become the second largest economy in the world, and it is maintaining its high economic growth. China is expected to become the largest economy in 2020, surpassing the United States. China's officially-declared military budget exceeded 100 billion dollars in 2011, and China has the second largest military in the world. It is Xi Jinping and his administration that will lead the country after the Communist Party Congress this fall. The leadership structure is not clear yet but, as a consequence of such events as the downfall of Bo Xilai and the replacement of Beijing's party secretary since March, the Jiang Zemin faction appears to have broken down. If this is so, the power of the Princeling and Jiang Zemin factions is declining, while that of the Youth League faction is increasing. This would make it more likely that Hu Jintao will remain the Chairman of the Central Military Commission and maintain strong influence for at least two years even under a Xi Jinping administration.

This author has long suspected that the Princeling faction is an organization with clear direction and organizational unity. It is no surprise that the children of revolutionists would form a group because they were schooled together and privileged to hold positions within the state or interest groups. Xi Jinping is the son of a revolutionary statesman, Xi Zhongxun, and has deep connections with the Princeling faction. Xi Jinping is particularly close to former Vice President Zeng Qinghong-whose father is Zeng Shan, former head of the organization and commerce divisions of the Party Central China Bureau before liberation-and it is said that senior staff members at Xi Jinping's office once worked for Zeng Qinghong's office. In addition, Xi Jinping's career clearly indicates his connections with his father and other senior officials. That said, however, this author believes that Xi Jinping is not just the representative of the Princeling faction but is in fact a leader with wider connections to the Youth League faction, elite military officers, business elites, and so on.

What, then, will be Xi Jinping's direction and policy? What kind of political leadership will he show? Some analysts contend that he will adopt more conservative policies and try to strengthen one-party rule domestically while choosing a "hardline foreign policy" emphasizing "core interests" due to his close relations with the Princeling faction and the military. Consequently, his statements are conservative but reformist, China-centric but internationalist. In addition, China is now confronting four serious dilemmas.

The first dilemma is between economic growth policies and their "social debts." Since there have been no solutions to either environmental degradation or income, regional and class gaps, the grievances of the people are growing. The second dilemma is between growing national power and international cooperation. China's "rapid military buildup" and expanding maritime and "core interests" have generated "China threats" and "China alarms." Even if the Chinese authorities refer to "peaceful development" and "peaceful rise," that does not ease the mistrust and concern within the international community. The third dilemma is between a unique China and universalism. Global leadership requires active engagement with the common values and public goods shared among the members of the international community. Among Chinese people, however, there is a strong emphasis on "Chinese uniqueness" and "Chinese ways" and a deep distrust of Western-centric international norms and systems. How will China address "international public goods," namely, universal values? Will it challenge these or not? How will it coordinate with other countries? The last dilemma is between an open society and Communist rule. China's open reform policies not only realized economic growth but also generated a sense of rights, and the Communist Party has applied a strong brake to social and political liberation. On the other hand, various steps have been taken to introduce a degree of flexibility. Nevertheless, resistance from minorities, farmer movements, frequent civil and mass protests, civil rights movements aimed at raising public awareness of rights, and expansions of "free spaces" by informal media are now all evident.

The era of Hu Jintao was a decade of growing dilemmas caused by China's notable progress. How will a Xi Jinping administration tackle those problems? It is likely that the new leadership will have to run the government constrained by the above-mentioned challenges.

As China seeks to grapple with these dilemmas, Japan's path toward modernization, above all its experiences during the period of rapid economic growth from the 1960s to the 1980s, would provide an extremely useful reference for China. There are lessons to be learned from the roles of opposition parties and the media in criticizing those in power under the de facto one-party rule of the Liberal Democratic Party, the resolution of various pollution issues, the enhancement of social security systems, and coordination between Japanese-style management and international cooperation. Although Japan and China today are involved in a serious dispute over the Senkaku Islands, the need for them to deepen mutually complementary cooperation is incalculable. An improvement of Japan-China relations under Xi Jinping's leadership is very much to be desired.

Dr. Satoshi Amako is a professor at Waseda University.

The views expressed in this piece are the author's own and should not be attributed to The Association of Japanese Institutes of Strategic Studies.