It is often said that politics is about who gets what, when, and how. Since early 2004, Hu Jintao and Wen Jiabao have adopted a macroeconomic control policy to limit bank lending, land use, and fixed-asset investment. They have acknowledged explicitly that this policy does not treat all sectors and provinces in the same way. While allocating resources to support the agriculture, energy, transportation, and social welfare sectors, especially in the less-developed western and northeastern regions, Hu and Wen have strived to cool off the decade-long construction fever in Shanghai and the Yangtze River Delta. The fact that the central government can say "no" to Jiang Zemin's turf suggests that Hu and Wen have begun to take the offensive. Through macroeconomic adjustments and geopolitical coalition-building, Hu and Wen have consolidated their power. However, given China's daunting challenges, only time will tell whether the Hu-Wen administration can achieve a soft landing politically as well as economically.

“As an expositor of economic principles and their application to the policies of our day, Thomas Sowell has no rival.” By Tom Bethell.

Striking a balance between freedom and equality

The Chinese leadership recently adopted a "strategy of strengthening China through human capital" with the goal of enhancing the country's international competitiveness in higher education. Largely because of new policy incentives implemented by the government, China has witnessed a tidal wave of foreign-educated Chinese returning to their native country since 2000. A quarter-century-long effort to train China's best and brightest overseas now seems to have come to fruition. These new developments, however, may also intensify political tensions between coastal and inland regions within the country and between foreign-educated and locally educated elites. China's well-funded universities, where foreign-educated returnees already predominate, are disproportionately located in a few coastal cities. This increasingly uneven distribution of human capital presents a major challenge for the Chinese leadership as it strives to achieve more-balanced regional development.