Introduction

The Chinese Communist Party (CCP) is the founding and ruling political party of modern China, boasting over 82 million members to date. The CCP is undergoing a pivotal once-in-a-decade power transition that will see its fifth generation of leaders set the future agenda for the second-largest economy in the world. While the country has maintained a political monopoly since its founding, the effects of China's rapid economic growth have triggered increasing social unrest and political destabilization that challenges the country's rise as a global power. A spate of political scandals has also exposed deep power struggles inside the infamously opaque organization. While the changeover will do little to affect immediate party policy and direction, the implications of the new appointments could shed some light on how China plans to position itself on the world stage.

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Origins and Power Structure

Inspired by the Russian Revolution of 1917, the CCP was founded in 1921 on the principles of Marxism-Leninism after a lengthy civil war against the Kuomintang, its primary rival. Experts contend that despite China's economic reform to a market economy in the late 1970s, the modern Chinese state remains a purely Leninist system, related to that of Cuba, North Korea, and Laos. The party's grip on power relies on three core pillars: control of personnel, propaganda, and the People's Liberation Army. Around 77 percent of members are men, and farmers make up roughly one-third of membership.

The CCP convenes its National Party Congress every five years to set major policies and choose the Central Committee, which comprises around 370 members including ministers, senior regulatory officials, provincial leaders, and military members. The Central Committee acts as a sort of board of directors for the CCP, and its mandate is to select the Politburo, which has twenty-five members.

In turn, the Politburo elects through backroom negotiations the nine-person Standing Committee, which functions as the epicenter of the CCP's power and leadership (SCMP). Hu Jintao, former head of the Communist Youth League, sits atop the system as general secretary, and as president and head of the military exerts enormous influence in setting parameters for government policy. The premier, Wen Jiabao, heads the State Council, or China's equivalent of a cabinet.

The Eighteenth National Congress

The new makeup of the Standing Committee, whose numbers could be reduced from nine to seven, will be the most watched development at November's eighteenth National Congress. Vice President Xi Jinping (FP) is slated to take Hu's place, while the current executive vice premier, Li Keqiang, will replace Wen. Around 70 percent of the three most important leadership organs — the Standing Committee, the State Council, and the Central Military Commission — will be replaced, making this leadership turnover the most significant in the past three decades.

Leadership succession is a fairly concentrated process, with positions decided by a very small number of top leaders through secretive negotiations. Some split the CCP's power structure into two distinct camps: the "princelings," or children of high-level leaders; and the "tuanpai," or those like outgoing President Hu Jintao who have risen to power through the Communist Youth League and come from humbler backgrounds. Other experts see a much more complex power dynamic, built from personal alliances and factional loyalties juggled between three groups: retired leaders (in particular Deng Xiaoping, who picked Hu Jintao*), incumbents, and the incoming class, according to Minxin Pei, a China expert at Claremont McKenna College.

The CCP leaders "all have conflicting interests that sometimes overlap," says Pei. "The dynamics can be very fluid in this three-way negotiation process."

Such complex dynamics can be seen in the scandals that have riled the transition process. Former Chongqing party chief Bo Xilai, considered amongst the ranks of princelings and once a frontrunner for a Politburo promotion, was implicated in a murder plot involving his wife Gu Kailai and the murder of British businessman Neil Heywood. Bo was subsequently expelled from the CCP and publicly defamed in a move that seemed to satisfy the incumbents, whom Bo alienated with his leftist policies and self-promoting conduct, according to Pei. Elizabeth Economy, CFR's Director for Asia Studies, says Bo's expulsion "reflected the depth of concern, if not animosity, that some in China's top leadership felt toward Bo."

In another scandal, Ling Jihua, a close ally of Hu's, was demoted after his son was killed in a car accident under lurid circumstances. Amid escalating rumors of factional struggles, Xi Jinping disappeared from public view for two weeks in September, and reports surfaced that meetings at Beidaihe, the summer congregation site for the Communist leadership, were inconclusive with no big policy or succession decisions made.

Such publicized instability could present a legitimacy crisis for the CCP, which must navigate a feasible political transformation in order to retain power.

Challenges in Governance

In recent decades, global events and internal strife have brought the CCP close to the brink of collapse several times. The 1989 Tiananmen democracy riots and the collapse of the Soviet Union in the early 1990s triggered a series of existential crises for the party that forced it to reconsider its mandate. The Soviet implosion in particular pushed the CCP to undertake systematic assessments of the causes of collapse and institute intra-party reform in order to avoid a similar fate. It determined that an ossified party-state with a dogmatic ideology, entrenched elites, dormant party organizations, and a stagnant economy would lead to failure, according to David Shambaugh's 2008 book China's Communist Party.

Since then, the CCP has shown a technocratic capacity to adapt in response to the developmental stresses of society brought on by China's dizzying economic rise. Today's party "is all about joining the highways of globalization, which in turn translates into greater economic efficiencies, higher rates of return and greater political security," writes Richard McGregor in his 2010 book The Party.

Still, leaders at the top of China's power structure today lack the long-term vision for the party that reform figures like Hu Yaobang of the 1980s possessed; Hu, the former party general secretary, promoted greater party transparency and Deng Xiaoping's (Economist) free market reforms that modernized China's economy.

"They're mostly reactive," says Pei of the Chinese government. "The CCP could survive to this point today because of people thirty years ago. Today, they worry about how to get to where they want to be. With this kind of reversed incentive structure, you're not going to be forward-looking."

Actual governance of China can be extremely decentralized. While Politburo members retain responsibility for dictating policies and staffing ministries, they do not manage portfolios day-to-day the way a cabinet would. Chinese provinces enjoy tremendous autonomy, and subprovincial officials and leaders, appointed by the central government, have almost total control over governance. Policies can originate "haphazardly" in bureaucracies and ministries, within the committee, inside the NPC, or from think tanks and advisers, according to Pei. "There's no one set way that policy happens in China," he says. "Different organizations are tasked to take the lead in different cases."

It can take two to three years for laws and regulations to be implemented, and oftentimes such policies will endure a system of experimentation in which a few provinces serve as litmus tests. The structure also lacks a system of checks and balances in which regional officials are held accountable for policy implementation.

This lack of accountability has compounded grievances over income inequality, lack of consumer protection, land grabs, and human rights issues. Many of these have brought to light across the country by the Internet, which has heavily eroded the CCP's control over political communication. Forced evictions (FT) have spiked over the years as debt-laden local governments raised capital by selling seized land to developers. Activists like Chen Guangcheng (Economist), a blind lawyer who exposed forced sterilizations, raised public flags around human rights violations stemming from local corruption. And after consumers expressed fury surrounding a melamine-tainted milk scandal that poisoned thousands of babies, the central government was forced to act on long-standing concerns about the safety of Chinese products.

Domestic and Foreign Policy

Perhaps most pressing is the CCP's treatment of the massive income disparity that China's economic boom created; in mid-2012, the CCP announced a new income distribution framework set for approval to redress the growing gap. The country's emergence as an economic superpower has heightened governance challenges as China's middle class expands. In particular, the "side effects of rapid economic growth, including the gap between rich and poor, rising prices, pollution, and the loss of traditional culture are major concerns, and there are also increasing worries about political corruption," according to the Pew Research Center.

Health care also has been a major initiative for the party as a vast aging population drives government efforts to broaden insurance coverage. Spending on health care will almost triple (Bloomberg) to $1 trillion annually by 2020 from the $116 billion it spent in 2011, and medical insurance now covers more than 95 percent of the population. The party has also moved on energy policy, releasing a white paper (UPI) outlining China's initiatives for the next five years that includes developing clean energy to reduce its carbon footprint.

Meanwhile, China's burgeoning power on the global stage has made it at times unyielding on its foreign policy front, and sparked widespread perceptions of the country as an aggressive, expansionist power. It has staked unwavering claims of territorial sovereignty over the islands in the East and South China Sea — a move that pits the country against its ASEAN neighbors and has caused a diplomatic rift and stalemate in the immediate region. China has expressed continued support for regimes hostile to the United States, including Syria and Iran. Beijing has also protested plans for U.S.-South Korean naval cooperation in the Yellow Sea, and reacted vehemently to the U.S. sale of arms to Taiwan, suspending top level security dialogue and announcing unprecedented sanctions against U.S. companies with ties to Taiwan.

Some experts contend that while China's relative power has grown significantly with its economic rise, the main tasks of Chinese foreign policy are still defensive in nature: to destabilize influences from abroad, avoid territorial losses, and sustain economic growth. What has changed "is that China is now so deeply integrated into the world economic system that its internal and regional priorities have become part of a larger quest: to define a global role that serves Chinese interests but also wins acceptance from other powers," write Andrew J. Nathan and Andrew Scobell in Foreign Affairs.

But by and large, the rational objective for the new leadership in China is to move away from an antagonistic relationship with the United States, experts say, although the ultimate makeup of the final leadership may not matter enough to enact significant or immediate changes in this area. Others think U.S.-China relations will suffer until China adjusts its foreign policy and political structure more radically, starting with the normalization of its regional relationships.

"It will be very difficult for the fundamentals of the U.S.-China relationship to change absent the change in China's governance and its overall desire and commitment to assume a larger role in issues like Syria and Iran," Economy says. "It would require change in some fundamental principles of Chinese foreign policy."

Additional Resources

The Brookings Institute's China Center profiles twenty-five possible members of the next Politburo, focusing on personal and professional background, family, and patron-client ties, as well as political prospects and policy preferences.

The BBC outlines China's Communist Party's structure and system of rule, including the influence of the Politburo, National People's Congress, and State Council, in this graphic.

The Pew Research Centered issued this October 2012 report on the side effects of China's rapid economic growth, including gaping income inequality, rising prices, pollution, and worries about political corruption.

China's president-elect, Xi Jinping, is profiled in this Foreign Policy expose detailing the elusive vice president's biography, Party associations, and political leanings.

This Financial Times feature discusses the ascent of the bureaucrat in China's transition, and an incoming leadership focused more on factionalism within the Party than reform.

The New York Times broke this lengthy story detailing the wealth of Premier Wen JiaBao and his extended family through various business holdings, totaling $2.7 billion.

* An earlier version of this Backgrounder incorrectly stated that Jiang Zeming picked Hu Jintao.