In advance of the 16th Congress of the Chinese Communist Party in November 2002, some observers of China wondered who would succeed China's éminence grise in foreign affairs, Politburo member and Vice Premier Qian Qichen, who was obligated to retire. Although he lacked the stature or political clout of Zhou Enlai or Chen Yi—foreign ministers in the 1950s and 1960s—Qian was credited with having been the principal architect of China's emergence from diplomatic isolation and disrepute in the wake of the 1989 disturbances and violent crackdown in Tiananmen Square. His low-key but dignified and professional management of China's principal foreign relations during the 1990s won him promotion to the State Council in 1991, to a vice premiership in 1993, and to the Politburo in 1998. Qian's quiet grace and unflappable mastery of China's diplomacy won him many admirers in the West, as well. Analysis of Beijing's present foreign policy leadership and the prominence given to his recent memoir on his years guiding China's foreign policy suggest that Qian retains significant influence.
In the fall of 2003, Taiwan President Chen Shui-bian put forward a series of controversial proposals, including calls for referenda on various sensitive issues and reform of the 1947 constitution. This program sent immediate shock waves through the Taiwan presidential election campaign and roiled the policy establishments in Beijing and Washington. On the Chinese side, strongly worded condemnations of Chen's behavior came almost exclusively from civilian government and party channels, while senior military officials and the military propaganda apparatus were notably silent. The relative silence of authoritative military statements, complemented by the lack of evidence in open sources of troop movements, exercises, or other escalatory behavior, signals important changes in strategy and tactics with respect to Taiwan. This new posture contrasts starkly with the 1995–96 and even 2000 crises, when People's Liberation Army (PLA) voices were among the most aggressive and threatening. This subtler, nuanced strategy tracks with broader evidence of China's "new diplomacy" in the region, which seeks to achieve security goals with a more indirect approach. It is also consistent with Chinese strategy since the 2000 presidential election that has emphasized the twin pillars of economic inducement and a united front with the opposition while avoiding public displays of military coercion in favor of the quiet, serious preparation of military hedging options.
The recently published edition of the Blue Book of Chinese Society, an annual survey of social problems and attitudes published by the Chinese Academy of Social Sciences (CASS), gives ample evidence that social problems continue to worsen even as the new government focuses more attention on the plight of those left behind in China's struggle for economic growth and modernization. There are positive signs as well. Overall, incomes are up (according to official statistics); the middle class, depending on how one defines it, is growing; and most people continue to expect incomes to grow. Moreover, the government is increasing the resources it expends on social welfare. Nevertheless, a host of problems challenges China's new leadership, including income inequality, labor disturbances, rural disorder, and corruption. But the most difficult issue remains jobs. China's booming economy just does not create enough jobs relative to overall growth or the needs of the society. Thus, social order appears to be a long-term political problem for China.
The Wen Jiabao administration has found its feet and instituted ambitious initiatives in the financial arena. Since December 2003, major new policies toward the financial sector have been rolled out. Recapitalization, reorganization, and stock market listing of two of the main state-owned banks have begun. A program for new policies toward the stock market has been released. The launching of major programs follows the reorganization of the administrative apparatus and the promulgation of a series of laws and programmatic documents. Thus, the resumption of activist policymaking represents the culmination of a steady and methodical process of preparation. The degree of preparation is impressive, but it also reflects the magnitude of the challenges currently being faced and the difficulty of shepherding new policies through the Chinese political system.
The sweeping turnover of top party and state leaders completed in 2003 brought about the retirement of more than a dozen influential men who had dominated China's politics in the 1990s. Together they join a group of leaders, commonly referred to as the "elders," who presumably retain significant political influence in the decision making of their successors. Since retiring, however, the elders have presented a very low public profile, so divining the extent and nature of their influence is a highly speculative enterprise.
Any major shift in the strategic development of a country cannot be achieved without the presence of a large, unified group of governing elites who support the plan. Hu Jintao's New Deal is no exception. An analysis of the 29 top provincial leaders appointed since Hu became president of the People's Republic of China (PRC) in March 2003 shows that he has selected many like-minded provincial leaders to carry out his New Deal policies. Most of these new provincial leaders are relatively young; they typically advanced their careers from the grass roots and local administration; most have postgraduate degrees (mainly in economics, the social sciences, and the humanities); and many worked in rural areas early in their careers and later gained experience by managing large cities. Many had close ties with Hu during the early years of their careers as Chinese Communist Youth League (CCYL) officials. Equally significantly, the experience and outlook of many of these provincial chiefs mirror those of their role models Hu and Wen, in terms of their substantial work experience in China's inland region as well as the image of themselves they choose to present to the general public.