The next seven days in China will do a lot to shape the next four years in the United States.
In a context arguably at least as important as the just-concluded elections in the United States, the week-long gathering of the Chinese Communist Party will determine what happens in the largest country on the planet.
Are you paying attention?
There’s lots of speculation, as we shall report below, on who’s who in CCP, who’ll be on top, who’ll be ousted, and who’ll control the assertive Chinese military. And, like Kremlinology of the cold war, it’s interesting to look at and make educated guesses about. But China isn’t going anywhere: it’s not falling apart, it’s not on the verge of counterrevolution, and its economy will likely continue to grow at substantial rates. Beijing will become more assertive in Asia, and it will quietly but firmly challenge the traditional American hegemony in that part of the world. Handled right, the US-China relationship can survive and prosper. Handled poorly, especially in areas such the China-Japan rivalry, Taiwan’s inevitable Hong Kongization, and China’s need for unfettered access to oil from Iran, Iraq and Saudi Arabia, it could mean serious conflict.
The 2,270 delegates to the eighteenth party congress will elect a new Central Committee, nearly 400 full members and alternates, and by next week more than half of its members will be freshmen. More than half of the Politburo, the twenty-five members of the top leadership, is retiring, and one, Bo Xilai, has already been kicked out. And the Politburo Standing Committee, with nine members—the ruling body that makes decisions by secrecy-shrouded consensus—will see major changes, possibly shrinking to seven members. Its composition, apparently already decided, and the relative rank of China’s top leaders, will be revealed—at least to the extent that such matters are made public—next Thursday. Seven members of the Standing Committee are retiring.
What’s it all mean? The man who will lead China now is Xi Jinping . We’ll have to wait to see if Xi ushers in modest political reform, a little political reform, or none at all. It’s unclear whether he’s so close to the Chinese military  that he’ll allow them more influence, or whether he’ll be able to control the generals effectively. And it’s uncertain whether he’ll move China faster toward market-type reforms that would weaken China’s vast system of state-owned enterprises (SOEs) or whether, as favored by outgoing President Hu Jintao, he will bolster the SOEs.
Last week, in a major speech , Hu Jintao warned that his successors “should steadily enhance the vitality of the state-owned sector of the economy and its capacity to leverage and influence the economy.” And while he supported some reforms, he warned : “We will neither walk on the closed and rigid road, nor will we walk down the evil road of changing (our) flags and banners.” In a blunt section, he said that fighting corruption in China is so vital that failing to do so could collapse the state . “If we fail to handle this issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state. We must thus make unremitting efforts to combat corruption.”
The CCP Congress comes not only at a critical time in US-China relations, with plenty of internal scandals. The Chinese political world was thrown into turmoil last week when The New York Times reported that the family of Wen Jiabao, the outgoing prime minister, had amassed more than $2 billion  in a private fortune. And the soap opera–like scandal surrounding the ousted Bo Xilai took a spy turn when The Wall Street Journal reported that Neil Haywood, a British businessman allegedly murdered by Bo’s wife, was a part-time spy for the MI-6 , the British intelligence service. Reported the Journal:
here could be implications, too, for Chinese authorities, who would be guilty of a major security breach if they were unaware that MI6 had a source inside the inner family circle of a member of the Politburo—the party’s top 25 leaders—according to people familiar with the matter. If China’s security services were aware of Mr. Heywood’s contacts with MI6, they likely had him under surveillance during his final visit to Chongqing, those people said.
And there are other scandals, too. Ling Jihua, another party leader, was tarred in March when he tried to cover up an accident in which son crashed his Ferrari while zipping through the capital.
Some in the United States hope that apparent “liberals,” who favor a more open economy, more political freedoms, and a stronger, more independent court system might find their war onto the Politburo and the Standing Committee in top positions. A lot of hope rides on Wang Yang, the party chief in industrial Guangdong, who’s favored more tolerance of NGOs and who has been willing to negotiate with protestors. Ditto for Li Yuanchao, an alumnus of Harvard’s Kennedy School, who has told Americans that he favors more democracy.
But like the Catholic Church, China changes slowly, if at all. The party consensus is that China won’t be ready for democracy, even in diluted form, for decades.
Going forward, Obama will face a strong and assertive China. It can play a vital role on issues from Iran and North Korea to the Middle East. Antagonizing China’s new leaders thorough a US military buildup in East Asia and the Pacific isn’t the way forward. A “pivot” toward Asia, and away from the Middle East, is a good idea. But Obama should leave the Pentagon out of it.
For more on China’s leadership transition, read Peter Kwong’s piece  for The Nation magazine.