Recent months have hardly been proud ones for People's Republic of China (PRC) security policy. On diplomatic policies toward Taiwan, Japan, and North Korea, respectively, Beijing has appeared bullying, emotional, and ineffective. Given the widely negative reaction to the passage of an antisecession law, it remains to be seen whether recent trips by Taiwan's opposition party leaders to the mainland in April and May will improve relations across the Strait or will polarize Taiwan politics and destabilize cross-Strait relations. With respect to Japan, government inactivity in the face of acts of vandalism and racist sloganeering on the streets of its major cities seemingly contradicts the PRC's effort to put a smiling face on a rising China. On North Korea policy, Beijing either has decided to live with a nuclear Pyongyang or, more likely, has simply been ineffective in trying to lure the Democratic People's Republic of Korea back to the six-party talks. These outcomes do not match the Chinese Communist Party's self-styled image as a peaceful, responsible, and constructive rising power.

During April and May 2005, new policies were put in place to address some of the most contentious, long-running economic issues in China. Although the initial policy moves were modest, the way they played out illuminates the process of policymaking in China today, in particular the large and growing role of the State Asset Supervision and Administration Commission (SASAC). On balance, these changes have brought the SASAC to a substantially more important and powerful position in the Chinese economy.

At its annual meeting in March 2005, China's parliament formally transferred former top leader Jiang Zemin's last official post to his successor Hu Jintao. The transfer completes an unprecedented process of orderly leadership succession that began two and a half years ago. Since the National People's Congress, Jiang has assumed a nearly invisible public posture consistent with those of other retired elders among the Chinese leadership. Meanwhile, Hu has been depicted as moving carefully in new policy directions while maintaining continuity with the policies associated with Jiang Zemin.