IMMENSE challenges face the new leadership as Xi Jinping, whose assumption of office is now only a formality, becomes the first post-1949 Chinese to become the Communist Party’s general secretary. The astonishing pace of China’s economic development has made its econ-omy the world’s second largest. But this has not been without a price in terms of social pressures, a widening rich-poor gap and such a high level of corruption that outgoing president Hu Jintao had to devote a considerable part of his speech to the subject on the opening day last week of the Chinese Communist Party’s 18th Congress. Mr Hu said if China failed to tackle corruption it could prove “fatal” to the party and cause “the fall of the state”. These are grim words from a veteran during whose decade-long rule China overtook Japan as an economic power. Western experts forecast that the Chinese economy will pass America’s during the Xi rule. But voices within party and government are calling for urgent political and economic reform to address growing discontent as seen in the social media.

While the Bo Xilai affair highlights the ideological dissent within the party, the conviction of Liu Xiaobo, a Nobel laureate, shows dysphoria in the fast-expanding and vibrant middle class, especially among the intellectuals. Mr Bo was a powerful member of the politburo and a candidate for the top post. His reservations about what is called Dengism and emphasis on a return to Maoism triggered a rift within the top brass, leading to his expulsion from the party. Mr Xi, the fifth-generation leader, is said to be a man of vision and must move fast to reform the system. There are indications the party constitution may be amended, and the economic reforms could include the breakup of large state-owned enterprises. Mr Xi, who will replace Mr Hu when he is elected president by parliament next March, will also have to tackle some knotty foreign policy issues and develop rapport with a re-elected American president to remove differences on such issues as Syria, Iran and the quarrel with neighbours over disputed islands.