By Kim Young-gyo
BEIJING, Nov. 16 (Yonhap) -- With the close of the weeklong political drama in the Chinese capital, China's newly elected leadership is widely seen as confronting a series of stark challenges with the world's second-largest economy seeing a growing need for sustainability and reforms.
Xi Jinping has become the chief of the Chinese Communist Party, being named on Thursday as the General Secretary of the Standing Committee, the most powerful decision making organ within China's de facto only political party, following the quinquennial National Congress held from Nov. 8 until Wednesday.
Along with him, six other members, including Li Keqiang, were elected to the Standing Committee. Xi and Li are widely expected to be named the country's president and premier next spring. The two will serve in their new posts for the next ten years.
From what can be seen as Xi's first speech as the state leader, it can be inferred that the new leadership, as a team, has a better understanding of the pressing challenges at hand.
"The great trust of all members of the party and the expectations of people of all ethnic groups around the country are not only a tremendous encouragement to our doing the work well, but also a heavy burden on our shoulders," Xi said in a meeting with the press at Beijing's Great Hall of the People on Thursday.
"In the new situation, our party faces many severe challenges, and there are many pressing problems within the party that need to be resolved, especially problems such as corruption and bribe-taking by some party members and cadres, being out of touch with the people, and placing undue emphasis on formality and bureaucracy must be addressed with great effort."
Outgoing President Hu Jintao and Premier Wen Jiabao engineered the successful ascent of the Chinese economy during their past ten years at the helm of the government.
China's gross domestic product (GDP) size grew nearly four-fold from 12 trillion yuan (US$1.9 trillion) in 2002 to 47 trillion yuan in 2011.
Its economy has been the world's second largest after the U.S. since 2010, surpassing the longtime Asian economic powerhouse Japan.
Within those ten years, China's share in global trade almost doubled to 8.2 percent from the previous 4.7 percent. Its foreign exchange reserves also became the largest in the world.
However, at the same time, China's economic imbalances worsened, putting social stability at risk.
While the country's per capita income tripled during the last decade, the income inequality between urban and rural areas widened.
In 2002, urban income per capita was 8,177 yuan, 2.37 times higher compared to rural income per capita, which was 3,449 yuan. In 2011, urban income reached 23,979 yuan, 2.44 times higher than rural income per capita of 9,833 yuan.
The country's Gini coefficient, a common measure of income inequality used globally, is estimated to have reached 0.44 last year, making China one of the most unequal countries in terms of national income.
Chinese authorities have refused to publish the official Gini coefficient since 2000, when they said China's figure was 0.412 for that year. The coefficient, which measures income distribution on a scale of zero to one, indicates a relatively reasonable income gap if the number is between 0.3 and 0.4. An index between 0.4 and 0.5 signals a large income gap.
Over the last ten years, the consumption share to the country's GDP ratio fell from 59.6 percent in 2002 to 49.1 percent in 2011, despite policies stressing domestic consumption.
Experts say China's private consumption would have fallen even more if the steady consumption by the government was excluded from the share.
The current growth path for the world's No. 2 economy appears to be unsustainable in the longterm, with China's domestic imbalances deteriorating in an extreme manner.
The challenge for the new leaders will be finding the right balance of sustaining economic growth and tackling the widening household wealth gap.
More emphasis was put on people's well-being, or minsheng in Chinese, during the recent National Congress, compared to the past.
A household income target was mentioned in the early part of Hu's opening speech at the National Congress, indicating that the Chinese Communist Party has started to regard income distribution as important as growth.
"China should double its 2010 GDP and per capita income for both urban and rural residents by 2020," Hu said.
The report adopted by the National Congress suggests the authorities will reduce the government's intervention in the allocation of the country's resources and capital.
"The core of economic reforms is to balance the relationship between the state and the market and to let the market mechanism play its role," the report said.
With China expected to show slower economic growth in the next decade, the new leadership will have to find ways to unleash the country's new growth potential, while making real progress in improving people's livelihood.
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