China’s leadership transition was completed after the NPC and CPPCC meetings in this March, with the Xi-Li-led team taking over from the Hu-Wen-led team. Compared to their predecessors, Xi and Li face daunting challenges as well as unprecedented opportunities in the context of the changing domestic and international environment. To realize the Chinese dream under the Xi-Li leadership, China should properly handle the following three pairs of relations.

First, the relation between development and governance. Under Hu and Wen, China’s economy leaped forward at an unprecedented pace, emerging from the devastating global financial crisis almost intact. Over the past ten years, China has overtaken the UK, France, Germany, and Japan, rising to the biggest economy second only to the U.S. On the other hand, China has also been troubled by problems such as high pollution, food safety, corruption caused by its extensive economic development mode, sluggish supervision measures, and intricate vested interests, all of them constraining the building of a beautiful, happy, healthy, and law-based China. For the upcoming decade,

DEVELOPMENT remains China’s top agenda, a priority on which hinges China’s political stability and social order. Urbanization and the modernization of the agricultural sector have tremendous potential, yet their progress should never copy the poisonous and blood-dripping GDP growth model. At the same time, systemic and structural epidemics in the economic, social, and ecological fields require intensified governance, optimized modes of economic development, improved design of political mechanisms and institutions, and reconstructed social stability architecture, in order to sustain China’s overall development. All of this are pressing issues in the next ten years. Moreover,the environment issue is one of the most prominent problems, whose importance was underlined in the work report of the CPC’s 18th Party Congress, “We must fully implement the overall plan for promoting economic, political, cultural, social, and ecological progress”. Therefore, China’s future development lies in improved quality and efficiency, and the balance of development and governance is the key. In the recent Human Development Report 2013 released by the UNDP, China ranks the 102nd in terms of perceptions of individual well-being, a sarcasm as well as a warning to the world’s second largest economy. 

The second is the relation between power and rights. Domestically, the objective of political reform and the streamlining of government agencies is to limit and diffuse central government power, expand civil liberties, and better rebalance the relations of government, market, and society. The inequalities in resource distribution create strings of political, economic, and social problems, such as the contradiction between SOE(state-owed enterprise) monopoly and the public’s consumption rights and interests, between the lack of oversight over government power and infringement of civil rights. Meanwhile, corruption, widening rich-poor gaps, divergence of interests, present great predicament for China’s further reform. A more broad-based reform, especially how to balance the power-rights relation, requires an optimal top-down design. Speaking from the international perspective, China has earned itself greater power in the regional and global dimensions due to its rising international status and growing influence and the benefits it has delivered to the world through peaceful development. It also has acquired more rights and interests in regional and international organizations, represented in greater quotas and voting power in the IMF, World Bank, World Trade Organization and others. How to make the best use of the power and rights at the international level requires greater diplomatic wisdom.  
 
Last, the relation between maintaining stability and safeguarding rights. From the domestic perspective, the high incidence of social unrest accompanied by the public’s awakening to their political rights and interests presents the ruling party greater challenges in maintaining stability on the one hand and safeguarding rights for the general public on the other hand. In recent years, the mentality of “stability trumps everything else” and the subsequent measures have led to more social and mass incidents, exacerbating social unrest. In fact, one of the functions of the government is to safeguard the public’s rights and interests while maintaining social stability. These two things are not incompatible. The new leadership needs to make new institutional arrangements in handling the relationship between social stability and the public’s rights and interests so as to sustain development in a context of greater social stability. From the international perspective, on the path towards a global power, China needs a stable and secure periphery to realize the “two centennial objectives”(to complete the building of a moderately wealthy country in an all-round way at the CPC’s 100th anniversary, and to complete the building of a prosperous, democratic, and civilized modern country at the PRC’s 100th anniversary) and the great Chinese dream of national rejuvenation. China’s rights and interests are infringed on or threated as manifested in its disputes over the South China Sea with the Philippines and Vietnam, over the Diaoyu islands with Japan, in the North Korean nuclear crisis, and in the estranging Myanmar which is showing signs of embracing the West. China shall never sacrifice its interests in exchange for a stable and secure periphery. Facing some countries’ deliberate provocations, rather than showing restraint, China should be responsive by taking a proactive posture and countervailing measures. China needs to shift from a contingency diplomacy to strategic transition and adjustment in conducting diplomacy in its neighborhood. Safeguarding China’s rights and interests requires strategic planning and proactive policies. 

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